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If you run a gym, you should be aware of the inherent risks to your customers. No gym owner wants someone to hurt themselves at their gym. This is especially if you or your staff cause the injury. If someone hurts themselves, you might be legally responsible to them under the Australian Consumer Law (ACL). As such, you should ensure you understand the guarantees you make to customers.

Importantly, by preparing a compliant waiver, you can limit or exclude some of your liability, unless an injury is caused by your reckless conduct. This article will outline the legal risks which you may face as a gym owner, and what your disclaimer should include.

Consumer Guarantees Under the ACL

By providing services to consumers, you automatically make guarantees about the services you provide under the ACL. Generally, you cannot contract out of these guarantees, even if your customer agrees.

Who is a Consumer?

Under the ACL, a person acquires services as a consumer if the price of the product is under $40,000 or, if the price is over $40,000, the services acquired are those normally acquired for personal household use or consumption. A gym is likely to sell its services to customers for less than $40,000, so the gym members will be considered consumers under the ACL.

What Are the ACL Consumer Guarantees?

You must provide the services with due care and skill. This means that you must:

  1. have an acceptable level of skill or technical knowledge in the area of activity covered by the service. For example, your staff includes qualified personal trainers;
  2. exercise due care and skill in supplying the services; and
  3. take all necessary care to avoid loss or damage when providing the services.

You must also ensure that the services are fit for purpose. Here, you may guarantee that the services are fit for purpose by implication or you may expressly guarantee that the services are fit for purpose. 

For example, if a customer joins the gym on the basis that staff expressly told them they would lose five kilograms in the next three months, then you made the guarantee that this goal will be met.

You must provide the services within a reasonable time.

For example, a customer must be able to access the gym within a reasonable time after signing up – unless you specify otherwise at the time of sign up.

If a gym sells products, you must also meet guarantees about the goods you provide.

What Happens if I Fail to Meet These Guarantees?

If the failure is minor, you can choose between fixing the problem or offering a refund. If the breach is major, the customer can cancel the services and receive a refund for the membership services they did not use. Alternatively, they can choose to keep the membership and receive compensation for the difference in the value of the services.

A failure is major if a reasonable consumer would not have paid for the membership had they known the extent of the defaults. Importantly, a customer may also sue you to recover damages for any loss you foresaw. As a general rule, the ACL does not permit service providers to contractually exclude these guarantees.

The Exception: Recreational Services

As a starting point, a gym may be liable for a customer who suffers personal injury, including for breach of consumer guarantees. 

For example, if a customer hurts their back during a yoga class and the instructor is not skilled or qualified to teach, you may be liable for personal injury, including for a breach of consumer guarantees.

However, the ACL makes an exception to this general rule if you provide recreational services. Here, you may exclude or at least limit your liability for death or personal injury, including illness (mental or physical). This is unless your reckless conduct caused this. Each state sets out when and how providers can exclude or limit consumer guarantees for recreational services.

Recreational services consist of participation in:

  • a sporting activity;
  • a similar leisure pursuit; or
  • another activity that involves a significant degree of physical exertion or physical risk, and is undertaken for recreation, enjoyment or leisure. 

Most services provided by a gym fall within this definition.

When a customer signs up to your gym, they will generally sign an agreement with you, generally referred to as terms and conditions. Here, customers should also agree to sign a waiver.

What Should I Include in My Waiver?

You should include a risk warning that is clear, unambiguous and that specifies how the personal injury may come about. 

For example, this may be a customer’s physical fitness level or pre-existing health conditions. 

You should also include a risk warning at your gym’s premises.

The waiver should include language to the effect that by participating in the recreational services, the customer releases the gym from liability for death or personal injury. The specific language that you require will vary depending on the state in which your gym is located. Some state legislation and regulations require that you include specific language. Further, minors can agree to waive their rights in some states, but not in others.

You may also wish to include warranties from the customers that they:

  • agree to applicable rules that you communicate to them; 
  • will collaborate and follow your reasonable instructions; and
  • will not engage your services if they are suffering from a condition that could be a risk to their health and safety.

How Should I Display My Waiver?

Most state legislation and regulations require that you make the waiver as obvious as possible to your customers. For example:

  • your terms and conditions should start with the warning and a clear statement that the terms and conditions include a waiver;
  • if customers sign up online, there should be two separate tick boxes to accept – one for the terms and conditions and one the waiver;
  • if customers sign up in person, your staff should verbally draw your customers attention to the waiver; and
  • note that some states require a hard copy signature for the waiver to apply.

Key Takeaways

If you run a gym, you should consider how consumer guarantees apply to you, including whether the services you provide are recreational services. All recreational service providers should consider a waiver to exclude their liability for personal injury or death. There are specific rules around how to draft and how to draw customers’ attention to the waiver which may impact on their enforceability. If you need assistance with drafting your waiver, call LegalVision’s contract lawyers on 1300 544 755 or fill out the form on this page.

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