A.Question Background

On 1 February 2021, Jennifer signed a contract with AerobicsPlus Pty Ltd, a company operating a gymnasium in the Perth CBD that provides aerobics and bodybuilding classes to the public.Jennifer paid an upfront fee of $2,000 to AerobicsPlus and agreed to pay a further sum of $6,000 in quarterly instalments over the next three years.In return, Jennifer acquired the right to attend two group aerobics classes at the gymnasium each week for a three year period.

On 15 February 2021, Henry signed a separate contract with AerobicsPlus.He paid an upfront fee of $1,000 and agreed to pay a further sum of $3,000 in quarterly instalments over the next three years. In return, Henry acquired the right to attend one group bodybuilding class at the gymnasium each week for a three year period.

Each contract contained the following clause:

'I understand that should I be unable to attend classes for any reason whatsoever (eg, physical incapacity, illness or any other medical condition), this will not affect the contract in any way. No refund of moneys already paid will be made.Furthermore, all instalments must continue to be paid whether or not classes are attended.However, if AerobicsPlus is of the view that I have ceased attendance because of a physical incapacity, illness or other medical condition, AerobicsPlus will extend the availability of classes to me until such time as I can resume continuous tuition'.

Three weeks after signing this contract, Jennifer was diagnosed by her doctor with an incurable illness which would make it impossible for her to attend the aerobics classes ever again.

Four weeks after signing hiscontract, Henry was badly injured in a motor bike accident.His doctor has advised him that he will be unable to resume classes at the gymnasium for at least two and a half years.

B.Jennifer's circumstances

Jennifer is an experienced solicitor who works for a large commercial law firm in Perth.She hurriedly read through the contract hurriedly before signing it. She thought the price was 'rather high', but did not make any enquiries of competing gymnasiums because she was too busy with her work commitments. Moreover, as part of her overall salary package, Jennifer's law firm has undertaken to reimburse her for the cost of the classes.

C.Henry's circumstances

Henry is 18 years old. He left school as soon as he could because he hated it and had a very poor academic record. Since leaving school has held various jobs for short periods including window cleaning and gardening.He signed up for the bodybuilding classes because he wanted to improve his physique and self-confidence and make new friends.He signed the contract without reading it because, as he put it, 'I can't read too well and those forms never make any sense to me'.He had thought of showing the contract to his dad before signing it, but did not do so because AerobicsPlus told him that the bodybuilding classes were in heavy demand and it could not guarantee to hold the price if he did not sign the contract immediately.

D.AerobicsPlus's dispute with Jennifer and Henry

AerobicsPlus has refused to cancel either contract or to refund any moneys already paid.It has also warned Jennifer and Henry that they must continue paying all the instalments as agreed in the contract or they will be taken to court. In response to a question from Jennifer, AerobicsPlus has admitted that its fees are three times higher than those of competing gymnasiums, but has also stated that it has never claimed to be the cheapest in town. It has also told Jennifer and Henry that, for commercial reasons, it has always insisted (as have its competitors) that its clients enter into long-term contracts.

Advise Jennifer and Henry of their rights, if any, against AerobicsPlus under Part 2-2 of the Australian Consumer Law and the remedies that may be available to them if AerobicsPlus is proved to have contravened that Part.