Do you have to pay for a sum of monthly membership charges you weren't charged for until you cancelled?

Question

Imagine the scenario where F had been going to a local gym since 2018 with a monthly membership subscription. When F went to cancel this week, they informed F that they never actually charged her account during that time (they, the gym, admitted in writing the mistake was on their end) and that F now owes them over $3000.

Assuming F's signed membership contract (which F is asking to obtain a copy of from the gym) doesn't contain any details regarding what would happen in a situation like this, is F responsible for paying the full amount or even any money at all? If so, is F obligated to pay it all at once or can F demand regular payments? If all at once, how long would F have to pay it?

Answer 1

F has a contract with G whereby F pays $N per month in exchange for the right to use G's facilities. At this point, F owes G 48x$N. It is breach of contract to not pay. Perhaps the contract says that G will bill F every month, but unless there is some clause saying that "if we fail to bill you for a certain month, your obligation to pay is null" (there will be no such clause).

Health spas are often subject to special laws, and Utah has them – here. You can decide whether the facility is a "health spa", but even if it is, there is no special law saying that the facility must charge (the credit card of) the member or forgo payment.

F must pay the obligation in a "reasonable time", but there may (as in, almost certainly must) be a clause saying something about payment due-dates, and penalties for being past due. A reasonable time for a monthly payment would be a month or so, at the most. Close attention to the wording of that clause might reveal something related to the problem they they didn't make the charges. However, since this is due to a mistake on G's part, the court is unlikely to insist on immediate payment, so some kind of payment plan would most likely be worked out.

Answer 2

Did F regularly go to the gym and get his value out of the membership? Or did he sign up in 2018, go to the gym for three months and then stop?

In the latter case, he could argue that (1) the gym had no cost from his membership and didn't deliver any value to him, (2) he was not aware that he was supposed to pay because they never charged him, and had they charged him, he would have quit much earlier.

I think this is a case where asking a lawyer for advice may be helpful. A lawyer also might make suggest to the gym "You have a choice of accepting $X which is much less than $3,000, or to sue my client which will cost you lots of time and money". Some arguments from the lawyer why they might not be entitled to the whole amount might be helpful and save F a lot of money.

Answer 3

F owes for 2 years

Under contract law, F owes for the services received but never paid for. He had a contract that said he would pay a certain amount per month and he didn't.

However, most jurisdictions have a statute of limitations which limit the time for bringing a claim for breach of contract. In new-south-wales, that limit is 2 years - any non-payment that occurred before that is legally unrecoverable. So, F owes for 24 months of dues plus interest.