STATE OF NEW YORK ________________________________________________________________________ 530 2023-2024 Regular Sessions IN SENATE January 4, 2023 ___________ Introduced by Sen. THOMAS -- read twice and ordered printed, and when printed to be committed to the Committee on Consumer Protection AN ACT to amend the general business law, in relation to the cancella- tion of a health club contract The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Section 624 of the general business law, as added by chap- 2 ter 630 of the laws of 1978, is amended to read as follows: 3 § 624. Rights of cancellation of contracts for services. 1. Every 4 contract for services at a planned health club or a health club under 5 construction shall, at the option of the buyer, be voidable in the event 6 that the health club and the services to be provided pursuant to such 7 contract are not available within one year from the date the contract is 8 executed by the buyer. 9 2. Every contract for services shall provide that such contract may be 10 cancelled within three business days after the date of receipt by the 11 buyer of a copy of the written contract. [Notice of cancellation shall 12 be delivered by certified or registered United States mail at the 13 address specified in the contract.] Such contract shall contain the 14 following written notice in at least ten point bold type: CONSUMERS 15 RIGHT TO CANCELLATION. YOU MAY CANCEL THIS CONTRACT WITHOUT ANY PENALTY 16 OR FURTHER OBLIGATION WITHIN THREE (3) DAYS FROM THIS DATE . . . . . . 17 [Notice of cancellation shall be in writing subscribed by the buyer and 18 mailed by registered or certified United States mail to the seller at 19 the address specified in such form. Such notice shall be accompanied by 20 the contract forms,] A buyer who cancels a contract pursuant to the 21 provisions of this subdivision shall return all membership cards and any 22 other documents or evidence of membership previously delivered to the 23 buyer. All moneys paid pursuant to such contract shall be refunded 24 within [fifteen business days] forty-eight hours of receipt of such 25 notice of cancellation. If the buyer has executed any credit or loan 26 agreement to pay for all or part of health club services, any such nego- 27 tiable instrument executed by the buyer shall also be returned within 28 [fifteen days] forty-eight hours. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD01862-01-3
S. 530 2 1 3. (a) Every contract for services shall provide that after such three 2 day period for cancellation as provided in subdivision two of this 3 section, the buyer's estate may cancel a contract for services if the 4 buyer dies. The buyer may also cancel after three days if the buyer 5 becomes significantly physically disabled for a period in excess of 6 [six] three months, or moves his or her residence to a location more 7 than twenty-five miles from a health club operated by the seller, or 8 after the services are no longer available or substantially available as 9 provided in the contract because of the seller's permanent discontin- 10 uance of operation or substantial change in operation. Nothing contained 11 herein shall restrict or prohibit the seller from offering or providing 12 in such contract additional or broader reasons for cancellation. The 13 seller may require reasonable evidence for a cancellation pursuant to 14 this subdivision. 15 (b) Every contract for services shall provide that after such three 16 day period for cancellation as provided in subdivision two of this 17 section, the buyer may cancel the contract upon thirty days' notice. 18 (c) Such contract shall contain the following notice captioned in at 19 least ten point bold type: ADDITIONAL RIGHTS TO CANCELLATION: 20 You may also cancel this contract for any of the following reasons: 21 If upon a doctor's order, you cannot physically receive the services 22 because of significant physical disability for a period in excess of 23 [six] three months. 24 If you die, your estate shall be relieved of any further obligation 25 for payment under the contract not then due and owing. 26 If you move your residence more than twenty-five miles from any health 27 club operated by seller. 28 If the services cease to be offered as stated in the contract. 29 For any reason upon thirty days' notice. 30 (d) All moneys paid pursuant to such contract cancelled for the 31 reasons contained in this subdivision shall be refunded within [fifteen 32 days] forty-eight hours of receipt of such notice of cancellation; 33 provided however that the seller may retain the expenses incurred and 34 the portion of the total price representing the services used or 35 completed, and further provided that the seller may demand the reason- 36 able cost of goods and services which the buyer has consumed or wishes 37 to retain after cancellation of the contract. The seller shall not 38 demand more than one month's fee or the equivalent thereof from a buyer 39 who cancels a contract pursuant to paragraph (b) of this subdivision. In 40 no instance shall the seller demand more than the full contract price 41 from the buyer. If the buyer has executed any credit or loan agreement 42 to pay for all or part of health club services, any such negotiable 43 instrument executed by the buyer shall also be returned within [fifteen 44 days] forty-eight hours. 45 4. (a) Every contract for services shall provide that such health club 46 shall accept notice of cancellation of such contract in person, by mail, 47 over the phone or by electronic mail. 48 (b) If a health club allows a buyer to enter into a contract for 49 services through a website, such health club shall accept a notice of 50 cancellation of such contract through such website in addition to the 51 methods provided pursuant to paragraph (a) of this subdivision. 52 § 2. This act shall take effect immediately; provided that section one 53 of this act shall apply to contracts entered into, issued, renewed, 54 modified, altered, or amended on or after such effective date.