posted on March 7, 2001 02:54:05 AM
I recall in the middle 1980's when the fitness craze started, the many health clubs that also started. So many people paid a yearly fee up front to the club and were given unlimited useage for this fee.
In many cases, only after a few months, when the members went to the club to work out, the doors were locked. The place went out of business. The owners gone. The lack of revenue forced the owners to close the doors.
In some cases, the people who paid the membership fee, discovered that the owners sold to another person and their membership was VOID. This was in the fact that the person paid a fee to the original owner and the second owner bought only the building and equipment, but NOT the business assests or debts. So the second owner was NOT responsible to the original members.
posted on March 7, 2001 04:49:30 AM
Yes you have no control over changes. Even the businesses that have not changed ownership change their terms on short notice and you have no effective recourse.
posted on March 7, 2001 06:18:13 AM
If a company ceases operation, or declares bankruptcy, kiss your money goodbye, contract or not.
Here in Ohio, according to the Attorney General's office, if a company ceases to exist, there is little you can do to recover any money you have paid, regardless of a contract. I had a business I was dealing with close and I called the AG for help and was totally amazed that there was nothing that could be done. I was under the mistaken impression that one of the many "consumer laws" would protect me but they don't.
Listening to NPR last week, I heard a story about a family in Virginia that signed a contract with a natural gas supplier when the rates were reasonable. They thought they were all set for the winter and were relieved not to have to pay the recent increases. NOT!! The supplier closed shop (guess they weren't making as much as they could being locked into the low gas rate), and the customers were forced back to the local supplier at the new high rate. Want to bet the "company" opens with a new name and higher rates?
A contract should include written guarantees in case of situations such as sale of the company.