Legal Question in Credit and Debt Law in Wisconsin

I've been a member of my local gym for the past 4 1/2 years and want to quit to join another gym with better equipment and cheaper prices. After contacting the gym and asking them what I needed to do to discontinue my membership, they said I'd have to pay the last month plus a $95 early termination fee. They say that my contract automatically renews every year and I'm canceling early. They send out a letter in the mail indicating that your contract will automatically renew if you do not cancel; however, there isn't anything in the contract that mentions renewal of the contract.

After reviewing the contract, which the employee who signed me up filled in my info but I never signed it, I have noticed the following reasons why I believe I'm not obligated to pay the early termination fee.

1. The contract has an early termination section that says, "for whatever reason you may wish to terminate this Agreement within the first 12 months you are required to give Razor Sharp Fitness, LLC, 30-day written advanced noticed at which time you will be charged for your final month of membership and a termination fee of $95. Your obligations under this agreement are not released until such amounts are paid." This says within your FIRST 12 months which to me means that you ONLY need to pay a termination fee if terminating the contract within the FIRST 12 months.

2. There is a section called Entire Agreement that says, "I understand that this Agreement constitutes the entire agreement pertaining to my membership at Razor Sharp Fitness, LLC, and no other agreements of any kind, verbal understanding or promise whatsoever, will be recognized or binding upon Razor Sharp Fitness LLC. Reading this Agreement and my signature constitutes full acceptance and understanding of the Agreement and acknowledgement of receipt of a copy of this Agreement." Since this section explicitly states that this Agreement (everything on the membership agreement) constitutes the ENTIRE agreement and the agreement fails to mention anything about renewal, I feel that their letters indicating automatic renewal are not part of the agreement and are null and void. I also didn't sign my name to this contract; however, by attending the gym perhaps I'm agreeing to the terms of the contract regardless??

So ... am I obligated to pay the early termination?? I'm afraid that they will bill me regardless and when I don't pay, it will go on my credit report. I'm not even sure if I have any recourse and can sue them for the damages they've caused by ruining my credit and/or time I will lose trying to get this resolved. Is it not worth the hassle and I should just pay the $95 or should I stand my ground and sue them if they bill me?


Asked on 6/14/10, 6:25 pm

1 Answer from Attorneys
JAY Nixon nixon law offices

I could not answer your question without extensive legal research of case law. However, if you were to pay any lawyer to do that, it would certainly cost you much more than $95, with no certainty that you will like the resulting recommendation. One general principal is that contracts can be ratified by accepting services offered under them after they have been presented to the customer, regardless of whether or not they bear the customer's signature. A court could therefore rule that some agreement exists (even if perhaps not exactly the one envisioned by the gym) in this situation. Agreements can also be modified by correspondence. Automatic renewals are common, even if limited somewhat by law in terms of a need for the creditor to provide notice of renewal (with which laws the gym seems to be attempting to comply). My comments in this online forum are offered for public educational purposes only and are not legal advice, nor do they create any attorney/client relationship between us. Even if I were advising you, the background information which you provided did not include sufficient detail to allow any sort of reliable advice upon which you should rely. Finally, I may be able to represent you if you contact my Racine office and make arrangements formally retain me. I represent clients throughout the state of WI.

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Answered on 6/15/10, 2:39 am


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