Wednesday, January 18, 2012
Help Me Howard: Contract/Warranty
A contract is a contract, and a warranty is a guarantee, right? But what happens if the company you have those agreements with is sold to another company? Do they have to honor the contract or warranty? Tonight, two people are asking that question in tonight's Help Me Howard with Patrick Fraser.
WSVN -- Twenty-three years ago, Marlene signed a contract to join a gym. For life.
Marlene Montenegro, Lifetime Contract Expired?: "The opportunity they were offering employees was a three-year membership, and then a lifetime membership at $50 a year for life."
Two years ago, Yami bought a pool to help her husband deal with an injury he got in the Marines. Bought the pool, in part, because it had a warranty.
Yami Stovall, Warranty is No Good?: "Oh yeah, the pool helps him a lot. Once he's in there, he is able to be in there for a good four, five hours doing exercise."
Then, Marlene's Bally gym was sold to LA Fitness, and she was told her lifetime membership was going to expire.
Marlene Montenegro, Lifetime Contract Expired?: "In terms of my contract, 'Well, whatever you paid for will be honored, but after that, your membership is going to be canceled.'"
Yami Stovall, Warranty is No Good?: "This is the rust."
After two years, Yami's pool started to rust, and that's when she discovered the company she bought it from had been sold to another company.
Yami Stovall, Warranty is No Good?: "And he said that there is nothing I can do for you, because that is not our company anymore."
Marlene didn't think her gym being sold to another gym should affect the lifetime membership she bought.
Marlene Montenegro, Lifetime Contract Expired?: "It is a problem, because I had a contract with Bally for a lifetime membership. Lifetime means my lifetime."
Yami believes a warranty with one company should be honored by the new company that took them over.
Yami Stovall, Warranty is No Good?: "And we're in the United States. We're not in a third-world country. We have rights. I would assume we do."
Well Howard, in both cases, a contract and a warranty were with one company that was then sold to another company. So does the sale end the agreements with the customers?
Howard Finkelstein, 7 News Legal Expert: "It depends. When a company is sold, in some cases, the warranties and contracts go to the new company and are valid. In other cases, the new company can choose to not accept the contracts and warranties of the customers, so the customer is out of luck."
When we spoke to Bally, they agreed to continue Marlene's lifetime membership. They no longer have offices in Florida, but she travels to New York where they have gyms, so Marlene is happy.
Even better news: LA Fitness has agreed to honor Marlene's contract.
Marlene Montenegro, Lifetime Contract Expired?: "I went to LA Fitness, and happily, they said that the policy had changed, and now LA Fitness will honor the memberships for those of us that were with Bally, so I'm happy."
In Yami's case, we went to the manufacturer of the pool. They had to honor the warranty, and they did, agreeing to replace the walls of the pool.
Howard Finkelstein, 7 News Legal Expert: "If the new company is not responsible for the warranty, go to the manufacturer of the product. If the warranty has not expired as in Yami's case, legally, they are still responsible. So remember that option."
And even more good news for Yami: Rec Direct didn't have to replace anything, but they offered to give Yami a new liner for the pool, leaving her, as we hoped, happy.
Yami Stovall, Warranty is No Good?: "Oh, most definitely I am. You guys helped me a lot, so I'm happy with that, most definitely."
Patrick Fraser: "We got a lot of calls from Bally's members concerned about their contracts. We don't have the terms of the sale, so legally, we can't be sure. But state law says, if you have prepaid for a gym membership and are not transferred to a new gym in your area, the old gym has to return your money. Bottom line: Gym membership contracts are really complicated, which is why there are state laws just for them."
A problem working you out? Wanna let someone else do the lifting? Contact us. We will keep you afloat and try to swim laps around the situation.
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