Hong, a personal trainer, entered into a service contract with a local gym to rent a studio for his consultations for 12 months. The gym prepared the contract and included an exit clause that allowed either party to cancel the arrangement with a 30-day notice period. The contract also required Hong to pay his rent by direct debit by the last day of every month.
Hong’s business slowed considerably during the economic downturn and he realised he was not going to be able to make ends meet at the gym. He had been in the gym for five months and gave 30 days notice to the gym owner under the exit clause provisions.
He notified his bank and the gym owner that he wished to stop the direct debits for the rent, and was advised by the gym owner that he could not do so as he would then be in breach of the contract he had signed.
Hong had failed to notice that in the contract with the direct debit company (prepared by his employer) he had agreed to a minimum payment of 12 months direct debit of his rent, despite the fact that he could give notice of 30 days regarding the use of the studio.
Hong is seeking legal advice to explore his options.