Understanding onerous terms in gym contracts
If you’ve ever signed up for the gym and can’t seem to get out of the contract no matter how hard you try, you may be left wondering what you can do. As with nearly all legal situations, whether or not this is possible depends on the legality of the contract and the details under which the contract was signed.
An instructive case is that of Balagula v. Ontario Consumers Home Services, 2018 ONSC 5398, where Iosif Balagula signed a 10-year contract to rent HVAC equipment, sold his house one year later, after which the HVAC company, Ontario Consumers Home Services, put a lien on Balagula’s house for the remaining nine years on the contract.
Taken from paragraph four of that ruling (my emphasis added):
“…the trial judge found that although Mr. Balagula signed the contracts, he did not consent to the onerous terms of those contracts that were set out in small print on the back of the contracts. The judge found that the terms were unclear and confusing and did not make it clear that this was a ‘rent to own’ contract. He found that the buyout formula was ‘far from clear.’ The trial judge found that these were consumer contracts of adhesion and that OCHS had failed to satisfy its legal obligation to bring to Mr. Balagula’s attention the onerous terms of the contract…”
Balagula won his case. Ontario Consumers Home Services was required to refund the amount for the remaining nine years ($17,334.09 plus $2,300 in legal costs), which Balagula had paid in order to complete the sale of his house.
If a contract, such as a gym contract, has onerous terms and the signee is not made aware of these terms, then the contract (or at least, the terms of the contract that are considered onerous) may be considered legally unenforceable.
There are some important details to take into account when looking at the Balagula ruling. Note that it’s not the onerous terms on their own that make the contract inadmissible, it’s the fact that he was not made aware of these provisions. If the rental agreement had his initials next to these clauses in the contract then he couldn’t claim that he was unaware of them.
If Ontario Consumers Home Services had Balagula initial next to these provisions then he wouldn’t have a case. Remember this when you are signing a gym contract, or any contract. Gyms who are thorough and above-board will make sure that you have read the entire contract and may even get you to initial in certain places. Even if you haven’t read the contract, this is now proof that you were made aware of, and consented to, these terms.
So if your gym contract (or any other contract) has provisions that would be considered onerous (that is, that unduly punish a certain party over and above what would be considered reasonable) and these were not reasonably pointed out to you (that is, hidden in the fine print), then you might have grounds to nullify the contract. If the terms are not considered onerous, or they were made clear to you when you signed the contract, then you are facing an uphill battle and are likely to be on the hook for the remainder of the contract term.
Do you have a question for Cailen? Email him at info@swainparalegal.com and remember to put The Ontarion in the subject line.
Photo by Alora Griffiths/The Ontarion