A Club’s Termination Fee is Held Void

The membership is the lifeblood of any health club. To ensure that clubs remain solvent, their operators must work hard to attract new members and hold onto them. However, since no relationship lasts forever, it is not unusual for clubs to include some type of termination or liquidated damages clause (which spells out what damages a party must pay if he or she breaches a contract) in their membership agreements. The goal of such clauses is to protect the club and ensure a positive cash flow — but as cases such asMau v. L.A. Fitness International [2010 U.S. Dist. LEXIS 119576] show, health clubs must ensure that these clauses are not unfairly punitive.

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