California Five-Day Contract Law

Contracts for bodybuilding health studios require a five-day right of cancellation.

A contract cancellation clause, sometimes referred to as "buyer's remorse," allows the consumer a chance to legally void an agreement without exposure to penalties and without a requirement to show legal cause for the cancellation. Contracts in force in California typically provide a set number of days for the cancellation, and the buyer is under no obligation to explain the reasons for the decision. Fees may not be assessed for a voided contract within the prescribed five days.

California Cancellation Provisions

The definition of the California five-day period is open to interpretation. In the case of Purifoy v. Howell, a California court interpreted a business day as including only weekdays even though a business may be open on either day during the weekend. Most contracts add a supplemental clause supplying clarification stating "work days." A written cancellation statement must be penned by the buyer and arrive at the seller's business address within the five days. The cancellation must be in writing, according to the California Department of Consumer Affairs.

Credit Repair Services

Credit repair services are singled out under California Civil Code 1789.16 for coverage under the five-day contract law. The California consumer agency notes that the buyer should return the cancelled contract via certified mail and pay for a return receipt request. The state Consumer Affairs Department also recommends writing down the date the cancellation was mailed and the location where it was mailed, as well as the date and time.

Home Equity Sale During Foreclosure

Cancellation of home equity sales involves the certified mail requirements, individual mailing notations, and this process is also singled out under the five-day contract law. Home equity sales occur when a seller defaults on taxes and cannot pay the required state or local property tax. The seller has the option to turn over the property to the state for an auction or listing the property for sale. The state takes the outstanding taxes from the sale and any equity left in the property is turned over to the buyer. California Civil Code 1695.4(a) regulates the sale requirements for this cancellation. The agreement with the state may be overturned during the five-day waiting period.

Health Studio Services Contracts

California has a specialized law regulating health studios passed in May 2009. The state defines health services as "instruction, training or assistance in physical culture, body building, exercising, reducing, figure development and other similar skills." The studio itself may be a gym or any building used to facilitate any of the enumerated activities. The five-day contract applies to any of the grouping under this law, but it does not apply to "persons licensed in the healing arts, by nutritionists, and by schools operating under the California Education Code." Each of the procedures listed for other cancellations also apply for health studio contracts.

Significance

The five-day contract law is a boon to consumers exposed to high-pressure sales techniques. It is a cooling-off period for the buyer required to sign a contract for services. The time period also allows time for the signer to investigate the claims and take the document to an attorney, if necessary, for advice and comments.

References

• California Department of Consumer Affairs: Health Studio Services Contract Law
• California Department of Consumer Affairs: : Consumer Transactions with Statutory Contract Cancellation Rights
• FindLaw: Purifoy v. Howell
• "How to Become a Real Estate Agent;" Pamela Gray and Jennifer James; 2007
• Justia: CA Insurance Code Sections 673