Source: https://law.justia.com/codes/tennessee/2014/title-47/chapter-18/part-3/section-47-18-305
Timestamp: 2019-12-14 04:52:54
Document Index: 36396867

Matched Legal Cases: ['§ 47', 'art 3', '§ 47', 'art 3', '§ 47', '§ 47', '§ 47', '§ 47']

§ 47-18-305 - Requirements for valid agreements. :: 2014 Tennessee Code :: US Codes and Statutes :: US Law :: Justia
Justia US Law US Codes and Statutes Tennessee Code 2014 Tennessee Code Title 47 - Commercial Instruments And Transactions Chapter 18 - Consumer Protection Part 3 - Health Clubs § 47-18-305 - Requirements for valid agreements.
Part 3 - Health Clubs
§ 47-18-305 - Requirements for valid agreements.
TN Code § 47-18-305 (2014) What's This?
(a) All health club agreements shall:
(2) Be signed by the buyer;
(3) Designate the date on which the buyer actually signed the agreement; and
(4) Contain in boldface type of at least ten (10) points, in immediate proximity to the space reserved for the signature of the buyer, the following statement:
(5) (A) Contain in boldface type of at least ten (10) points, the following statement:
(B) Contain in boldface type, the following statements in separated paragraphs:
(v) A CONTRACT OR AGREEMENT MAY HAVE A CONTINUING PROVISION OR STIPULATION THAT PROVIDES FOR A MONTH TO MONTH CONTINUATION OF THE INITIAL TERM OF THE AGREEMENT PROVIDED THE BUYER HAS THE RIGHT TO CANCEL THE CONTINUING PORTION OF THE AGREEMENT AFTER FULFILLING THE ORIGINAL TERM OF THE AGREEMENT BY TENDERING THIRTY (30) DAYS WRITTEN NOTICE OF SUCH INTENT TO THE OPERATOR BY REGISTERED MAIL. IF SUCH CONTRACTUAL OBLIGATION HAS A CONTINUING PROVISION OR STIPULATION, NOTIFICATION MUST BE SENT BY THE HEALTH CLUB OPERATOR TO CONFIRM THAT THE ORIGINAL OBLIGATION WAS FULFILLED AND TO REAFFIRM THE MONTH TO MONTH OR CONTINUING PROVISION OR STIPULATION. SUCH NOTIFICATION SHALL ALSO INCLUDE NOTICE OF THE BUYER'S RIGHT TO CANCEL THE CONTINUING MONTH-TO-MONTH OBLIGATION UPON THIRTY (30) DAYS' WRITTEN NOTICE SENT BY THE BUYER TO THE OPERATOR BY REGISTERED MAIL.
(b) A health club shall not enter into or offer to enter into a health club agreement unless the health club is fully operational and available to use by prospective buyers. The division shall, upon application by a health club operator, certify that a health club facility is fully operational if all of the promised equipment and services are available for use by prospective buyers. No payment or promise to pay by a prospective buyer may be accepted by any health club operator unless and until the health club facility has been certified by the division to be fully operational as described herein. This subsection (b) shall not apply to any health club that has maintained a satisfactory registration with the division for five (5) consecutive years; provided, that such health clubs notify the division by certified mail of their intent to enter into agreements for a location not fully operational as otherwise required by this subsection (b). In order to be eligible to use this exemption, an operator must use the same identification as described in any existing facility registration information as well as use the same federal and state tax accounts for payments of any related taxes due to this extension of operations.
(c) It is unlawful for a health club to offer any cash or discounted pre-payment option that exceeds a reduction of the cash value of the highest stated price for any similar period or service-type of agreement:
(1) By an excess of ten percent (10%) for any term less than two (2) years duration;
(2) By an excess of fourteen percent (14%) for any term of two (2) years duration, but less than three (3) years duration; or
(3) By an excess of eighteen percent (18%) for any term of three (3) years duration.
(d) It shall be unlawful for a health club to offer free or no cost periods of enrollment in addition to the initial paid term of the agreement in order to circumvent the discounting provision of subsection (c).
(e) (1) Notwithstanding this part or any rules promulgated pursuant to this part to the contrary, a health club may enter into or offer to enter into a health club agreement with, or accept payment or a promise of payment from, a prospective buyer prior to certification by the division of its facility as fully operational as set forth in subsection (b); provided, however, that the health club has:
(A) Acquired a property right or interest in this state with respect to the facility;
(B) Filed a registration application with the division as required by § 47-18-309; and
(C) Purchased from a surety company authorized to do business in this state a surety bond in favor of the division in the amount of twenty-five thousand dollars ($25,000).
(2) (A) If the division determines, based on the financial statement required by § 47-18-309(a)(3), that the financial condition of the health club is insufficient to protect prospective buyers, then the division may require that the health club post a surety bond in an amount greater than twenty-five thousand dollars ($25,000) but not to exceed two hundred thousand dollars ($200,000). The health club shall file a copy of the bond with the division.
(B) A buyer who suffers loss of payments made to a health club prior to certification due to the health club's failure to open the facility may recover the amount of the payments from the surety; provided, that the liability of the surety may not exceed the aggregate amount of the bond regardless of the number or amount of claims filed with the surety.
(C) Upon certification by the division that the health club is fully operational, the health club may cancel the surety bond upon thirty (30) days written notice of cancellation from the surety to the division.