Electronic Pre-Sale Contract Templates Issues

Recently, we conducted an unscheduled inspection of a gym that had been approved to pre-sell memberships. In their request for approval to presell memberships, the gym had provided all the required documents, which included a copy of a compliant paper contract. However, it appears that at some time during the pre-sale, the gym had opted to use an electronic contract template for all new memberships. We therefore, requested a printed copy of the gym’s electronic pre-sale contract. In our examination of the pre-sale contract template, we found that the printed version only contained the member name, address, term of the agreement, and amount paid by the member. What was of concern to this Office was that there were no references whatsoever to any of the required statutory provisions on the printed contract.

Electronic pre-sale contract templates must contain all statutory provisions and cannot be significantly different from the membership contract that is submitted to this Office for approval. This means that electronic pre-sale contract templates cannot be abbreviated versions of the paper contract. Please be aware, that contract templates that do not contain all of the required statutory provisions of the FBPA, and have not been approved by CPD, are not compliant and are not enforceable.

We have also observed that some electronic contract templates do not populate the seven-day cancellation date as is required. In the event that your gym’s electronic pre-sale contract template does not automatically populate a specific date for the seven-day cancellation field, you are allowed to say, “Seven business days after opening.”  Remember, there should be no blank spaces on the contract at any time. If there are any questions or concerns regarding these or other matters, please don’t hesitate to contact us.