(A) Every prepaid or credit contract for physical fitness services of over three months' duration or over two hundred dollars in amount must conform to the following requirements:

(1) the contract must be in writing, and a copy must be given to the customer at the time he signs it;

(2) the contract shall state clearly the street address or location of the center and outlets which the member may use at the time the contract is executed and the major facilities or major services which each offers;

(3) the contract shall reveal the finance charge, if any, which the member agrees to pay;

(4) if the customer executes a promissory note in connection with the contract, the contract shall clearly indicate whether the promissory note is assignable paper and whether it may be discounted and sold to third parties. Assignment of the promissory note does not affect the right of the member to cancel the contract or the method by which the cancellation may be made;

(5) the contract must contain a right to cancel provision in the following language:

"CUSTOMER'S RIGHT TO CANCEL

(a) You may cancel this contract by sending notice of your wish to cancel to the center before midnight of the third business day after you sign the contract. 'Business day' means Monday through Friday excluding state holidays and federal holidays. This notice must be sent certified mail to the following:

______________________________

Within thirty days of receipt of this notice, the center shall return any payments made and any note or other evidence of indebtedness. If you use the seller's facilities or services, the center may deduct a reasonable fee from the payments being returned based on the actual fee paid divided on a pro rata share by the number of days used by the customer.

(b) In addition, you or your estate may also cancel the contract at any time by written notice to the center at the above address if the following circumstances occur:

(1) the customer's death;

(2) substantial physical disability, certified by a physician, which makes it permanently impossible for the customer to use the center's services;

(3) the customer's permanent relocation to a residence over fifty miles distant from an outlet operated by the center, if the center is unable to arrange for the customer's use of another center with equivalent major facilities and services.

The center may require presentation of information to substantiate that one of these circumstances has occurred.

If the contract is cancelled because of disability, death, or permanent change of residence, the center shall return any note or other evidence of indebtedness and unearned prepayments as follows: For each month that the contract was in effect, the center is entitled to the rate a month or a treatment which it would have charged if the contract had initially been one for the number of months or the number of treatments for which the contract was actually in effect. The rate is to be determined from a fee schedule in effect on the date of the contract.

(c) The right of cancellation shall affect only the financial obligations under the contract and customer's right to use the center's physical fitness services."

(6) services such as personal training, personal fitness testing, and daily visitor fees that are not subject to being refunded must be clearly stated in the contract;

(7) Any contractual provision allowing more liberal rights of cancellation than set forth in this chapter may be substituted for the notice required in this chapter.

(B) A contract is not required for personal training, private consultations, and fitness testing rendered on an hourly basis unless they are part of a package of over three hundred dollars.

HISTORY: 1985 Act No. 165, Section 1; 1992 Act No. 380, Section 1; 1994 Act No. 312, Section 1.