What happens to your gym membership during Covid-19?
The Covid-19 pandemic and the resultant nationwide lockdown has caused stress levels to reach head-popping proportions.
Ordinarily, we would turn to a form of physical or mental distraction that relieves us from the gloomy financial and social realities we now face.
For a number of individuals, gym memberships and the facilities they make available usually provide the relieving distraction from stressful situations. However, the circumstances of the current pandemic have made these facilities all but redundant.
Have the facilities which previously provided much-needed relief now become the “stress factor”?
What are the financial implications in respect of our gym memberships, considering the current social distancing measures?
Gym memberships are usually based on membership agreements or contracts. These agreements set out the rights and obligations of the member as well as the service provider. As with most agreements, they usually contain clauses which aim to limit the obligations of the parties in respect of a force majeure event.
Force majeure refers to a “superior force” or “act of God” and may be in the form of extreme weather, war, political revolt or strikes, among others. These events are due to no fault of the contracting parties and allows for the limitation or curtailing of contractual obligations under the circumstances.
Either party to an agreement may raise force majeure as a basis for limiting contractual obligations. In the context of gym memberships, this would mean that the respective gym may be able to limit their potential liability for the failure to provide the necessary facilities and services as per their gym membership agreements and, would also provide the basis for gym members to possibly limit their obligation to pay in respect of same.
In the case of Joint Venture Between Aveng (Africa) (Pty) Ltd & Strabag International GmbH v South African National Roads Agency and Another, it was determined that the following characteristics where relevant in proving force majeure under the circumstances:
- Could the event have been reasonably foreseen?
- Was the event attributable to the parties to the contract?
- Whether the event alleged to be a force majeure substantially effected the work?
Considering the above, it is accepted that a force majeure would have to be unforeseeable when entering into the gym membership agreement, unavoidable and impossible to overcome. The duty to prove the aforementioned factors, lays with the party who alleges that a force majeure event has occurred and must be proven in order to succeed with limiting contractual obligations on this basis.
Be that as it may, it is important to note that the principles of force majeure do not apply to contracts entered into after the event has occurred, to non-performance of monetary payment obligations and if the event occurs after a party has failed to perform in terms of their contract.
Another relevant contractual principle which may be applicable to the current situation in respect of gym memberships, is that of a supervening impossibility.
A supervening impossibility also refers to situation beyond the control of the contracting parties, which prevents or renders performance in terms of contract impossible. Importantly, performance must have been possible when the contract was concluded. A supervening impossibility refers to a vis major event and if proven by a contracting party, will absolve the parties of performance and terminate the relevant contract.
With regard to vis major, it needs to be proven that the performance in terms of the contract is objectively impossible and that the relevant event could not have reasonably been foreseen.
Force majeure events which render performance relatively impossible for the duration of the event, allows for possible suspension of the conditions of the relative agreement. It must be noted that contracts in terms of which performance is impossible from the onset is void ab initio or in other words void or invalid from the beginning.
Be that as it may, an event which renders performance in terms of an agreement objectively impossible at a later stage, may have the same effect as if performance in terms of the agreement was impossible from the onset.
The Consumer Protection Act 68 of 2008 (hereafter “CPA”) further provides guidance on how to deal with the obligations implied by gym memberships during this Covid-19 pandemic and national lockdown.
For the most part, gym membership agreements are considered fixed-term agreements.
Section 14 of the CPA sets out circumstances under which fixed-term agreements may be cancelled prior to expiration of the contract.
It allows for a consumer to give a 20-days-notice of such cancellation to the relevant service provider and further allows a supplier to give a consumer 20-days-notice of cancellation if the consumer fails to perform in terms of the contract.
The Covid-19 pandemic has certainly brought about its own set of challenges and has tested our resolve on multiple levels. However, the aforementioned legal principles do allow for a certain degree of contractual relief.
It must be said that although the aforementioned principles allow, in certain instances for the cancellation an termination of contractual agreements, we must open the doors to negotiation and compromise if we want to move forward after this global pandemic.
Termination of contracts and stubborn adherence to agreements which no longer align with our reality are not the only options available to service providers and consumers.
Raeesa Ebrahim Atkinson & Nicolene Schoeman-Louw are both attorneys at SchoemanLaw Inc.