CHAPTER 7. HEALTH SPA SERVICES
IC 24-5-7
Chapter 7. Health Spa Services
IC 24-5-7-1
Definitions
Sec. 1. As used in this chapter:
"Business day" means a day other than Sunday or a legal holiday.
"Buyer" means a purchaser of services under a contract for healthspa services.
"Contract" means a contract for health spa services entered intoafter August 31, 1983. The term includes all financial agreementsprovided or arranged by the health spa or the health spa's affiliates.
"Health spa" means any business entity, other than an entity thatis exempt from taxation under Section 501 of the Internal RevenueCode, offering health spa services to the public.
"Health spa services" means instruction, training, or assistance inphysical culture, bodybuilding, exercising, reducing, figuredevelopment, or any other health spa service, for the use of thefacilities of a health spa, figure salon, weight loss clinic, gymnasium,or other facility used for the delivery of health spa services, or formembership in any group, club, association, or organization formedto deliver health spa services.
"Seller" means a seller of services under a contract for health spaservices.
As added by P.L.249-1983, SEC.1. Amended by P.L.24-1989,SEC.13.
IC 24-5-7-2
Contracts; requisites
Sec. 2. Every contract for health spa services shall be in writingand a copy shall be furnished to the buyer at the time the contract isformed.
As added by P.L.249-1983, SEC.1. Amended by P.L.24-1989,SEC.14.
IC 24-5-7-3
Contracts; term; limitations
Sec. 3. (a) No contract for health spa services may requirepayments or financing by the buyer over a period in excess ofthirty-six (36) months from the date that the contract is entered into.The term of a contract may not be measured by or be for the life ofthe buyer.
(b) The term of a contract may not exceed three (3) years from thedate that the contract is entered into. A buyer may renew a contractfor additional periods, but the contract price for the renewal of acontract must be at least twenty-four dollars ($24) per year.
As added by P.L.249-1983, SEC.1. Amended by P.L.24-1989,SEC.15.
IC 24-5-7-4 Contracts; time for performance; voidability
Sec. 4. (a) A contract for health spa services to be rendered at anexisting health spa facility must provide that the performance of theagreed upon services is to begin within forty-five (45) days from thedate that the contract is entered into.
(b) A contract for health spa services at a planned spa facility orspa facility under construction is voidable at the option of the buyerif the health spa facilities and the agreed upon services are notavailable within twelve (12) months from the date the contract isentered into.
As added by P.L.249-1983, SEC.1.
IC 24-5-7-5
Contracts; cancellation; notice; refunds
Sec. 5. (a) A copy of the buyer's cancellation rights under thischapter shall be furnished in writing to the buyer at the time thecontract is formed.
(b) In at least 10 point boldface type, every contract for health spaservices must provide that the contract may be cancelled beforemidnight of the third full business day after the buyer signs thecontract.
(c) A buyer may cancel the contract by written notice, in anyform, delivered in person or mailed by certified or registered mail tothe seller at the address specified in the contract. The notice must beaccompanied by the membership cards previously delivered to thebuyer.
(d) All money paid under a contract shall be refunded withinthirty (30) days of receipt of the notice of cancellation.
As added by P.L.249-1983, SEC.1. Amended by P.L.24-1989,SEC.16.
IC 24-5-7-6
Contracts; cancellation provisions; contingencies
Sec. 6. (a) In at least ten (10) point boldface type, every health spaservices contract that has not been cancelled under section 5 of thischapter must provide that the buyer or the buyer's estate may cancelthe contract if any of the following occur:
(1) The buyer dies.
(2) The buyer becomes totally physically disabled for theduration of the contract.
(3) The health spa facility operated by the seller is moved to alocation that is more than five (5) miles from the originalfacility. However, if a health spa facility is closed at any siteand a facility with similar health spa services is operated lessthan five (5) miles away from the closed facility, then thebuyer's contract may be transferred to the operating facility, ifthe operator of the facility to which the contract is to betransferred accepts the transfer.
(4) The services are no longer available as provided in thecontract because of the seller's permanent discontinuance of
operation.
(b) This section does not restrict the seller from offering orproviding in a contract additional or broader reasons for cancellation.
As added by P.L.249-1983, SEC.1. Amended by P.L.12-1986, SEC.8.
IC 24-5-7-7
Contracts; cancellation provisions; evidence of disability or death
Sec. 7. The health spa may require and verify reasonable evidenceof total physical disability or death. In the case of total physicaldisability, the health spa may also require that the buyer submit to aphysical examination by a doctor agreeable to the buyer and thehealth spa. The cost of the examination shall be borne by the healthspa.
As added by P.L.249-1983, SEC.1.
IC 24-5-7-8
Contracts cancelled; refunds; proration, cancellation of loanagreements
Sec. 8. (a) All money paid pursuant to a contract for health spaservices that is cancelled under this chapter shall be refunded withinthirty (30) days of receipt of a notice of cancellation. However, in acancellation under section 6 of this chapter, the seller may retain theportion of the total price representing the services used or completedplus reimbursement for the expenses incurred in an amount not toexceed twenty-five percent (25%) of the total contract price. In noinstance may the seller demand more than the full contract price fromthe buyer.
(b) If the buyer has executed any credit or loan agreement to payfor all or part of the cancelled health spa services, that agreementshall also be cancelled and returned within thirty (30) days. Noticeof the duty described by this subsection must be included in eachhealth spa services contract, in at least ten (10) point boldface type.
As added by P.L.249-1983, SEC.1. Amended by P.L.12-1986, SEC.9.
IC 24-5-7-9
Compliance with other provisions of law
Sec. 9. The provisions of this chapter are not exclusive and do notrelieve the parties from compliance with other applicable provisionsof law.
As added by P.L.249-1983, SEC.1.
IC 24-5-7-10
Contracts; voidability for noncompliance; cure by seller; actions
Sec. 10. (a) A contract for health spa services that does notcomply with this chapter is voidable at the option of the buyer.
(b) The seller may cure noncompliance with this chapter, and nolegal action may be brought by the buyer for relief under this chapterunless, following receipt of written notice of such noncompliance,the seller:
(1) fails within thirty (30) days of receipt of the notice of
noncompliance to notify all buyers with whom the seller hascontracted since August 31, 1983, of the noncompliance; or
(2) fails to make all contracts for health spa services which theseller has entered into after August 31, 1983, comply with thischapter.
As added by P.L.249-1983, SEC.1.
IC 24-5-7-11
Contracts; voidability for false information or advertisement
Sec. 11. Any contract for health spa services entered into inreliance upon any willfully or fraudulently disseminated false ormisleading information, representation, notice, or advertisement ofthe seller is void and unenforceable.
As added by P.L.249-1983, SEC.1.
IC 24-5-7-12
Waiver of chapter provisions void
Sec. 12. Any waiver by the buyer of part or all of this chapter iscontrary to public policy and is void and unenforceable.
As added by P.L.249-1983, SEC.1.
IC 24-5-7-13
Surety bonds; contracts for services to be rendered at plannedfacilities
Sec. 13. A health spa that sells contracts for health spa services tobe rendered at a planned health spa facility or a health spa facilityunder construction shall file with the secretary of state a bond issuedby a surety company admitted to do business in Indiana in theamount of twenty-five thousand dollars ($25,000) or such greateramount as the secretary of state may specify by rule. The health spais relieved from the obligation to maintain such a bond uponcommencing health spa service.
As added by P.L.249-1983, SEC.1.
IC 24-5-7-14
Surety bonds; requisites; cancellation; notices; new bond
Sec. 14. (a) The state of Indiana shall be the obligee under thebond.
(b) The bond shall be:
(1) executed by the health spa as principal and by a corporatesurety licensed to do business in Indiana as surety;
(2) in such form and shall contain such terms and conditions asthe secretary of state prescribes;
(3) conditioned upon the faithful performance of all obligationsof a health spa to construct or commence operations at itsplanned facility; and
(4) effective from the date of filing with the secretary of stateand shall continue in full force and effect until cancelled.
(c) The total and aggregate liability of the surety on a bond islimited to the amount specified in the bond. (d) A health spa may not cancel a bond prior to thecommencement of health spa services without the prior writtenapproval of the secretary of state and without the secretary's approvalof a substitute bond so as to provide continuous bonding of the healthspa's activities prior to the commencement of health spa services.
(e) The surety on a bond may cancel a bond filed under thischapter only after the expiration of ninety (90) days from the date thesurety, by registered or certified mail, return receipt requested, mailsto the secretary of state and to the principal on the bond a notice ofintent to cancel.
(f) Not later than thirty (30) days prior to the date upon which abond cancellation becomes effective, the health spa shall give writtennotice to the secretary of state that a new bond has been obtained soas to provide continuous bond coverage of the health spa's activitiesprior to the commencement of health spa services.
As added by P.L.249-1983, SEC.1.
IC 24-5-7-15
Surety bonds claims against bonds; hearing and determination;distribution of bond proceeds
Sec. 15. (a) If any health spa fails, or is alleged to have failed, tomeet its obligations prior to the commencement of health spaservices, the secretary of state shall hold a hearing and determinewhether there has been such a failure, determine those persons who,as buyers, have sustained financial losses recoverable under the bondand, if appropriate, distribute the bond proceeds to the personssustaining losses, to the extent of their losses.
(b) Actions upon the bond and the right to payment under thebond extend solely to the secretary of state. However, if the secretaryof state has not initiated an action upon the bond by scheduling andholding a hearing within thirty (30) days of a written request to doso, any claimant may initiate an action in the circuit court of MarionCounty, Indiana, to require the secretary of state to take action.
(c) If, upon a hearing, the secretary of state determines that theclaims of persons who have sustained financial losses recoverableunder the seller's bond exceed the amount of the bond proceeds, theproceeds shall be prorated among those persons according to theratio that each person's loss bears to the total amount of all provenlosses.
(d) The determination of the secretary of state as to liability underthe bond and the amount distributed under the bond is binding uponthe principal and surety of the bond.
(e) All hearings held under this section shall be held inaccordance with IC 4-21.5-3.
(f) The existence of the bond and the bond recovery procedure inno way affect or alter any other right or remedy which a person mayhave under applicable law.
As added by P.L.249-1983, SEC.1. Amended by P.L.7-1987,SEC.109.
IC 24-5-7-16
Purchase of facility; assumption of membership contract liability;preservation of actions or defenses
Sec. 16. (a) A purchaser of a health spa facility that offers healthspa services to the public assumes all membership contract liabilityfrom the previous seller.
(b) Any right of action or defense arising out of a health spaservices contract that the buyer has against the seller is preservedagainst an assignee of or successor to the contract.
As added by P.L.249-1983, SEC.1. Amended by P.L.24-1989,SEC.17.
IC 24-5-7-16.5
Refunds; options; repair and maintenance
Sec. 16.5. (a) Except as provided in subsection (d), if any of ahealth spa's facilities or services described in the contract are nolonger provided before full receipt of the services and use offacilities for which the buyer contracted, the buyer is entitled to arefund based on the total consideration proportional to the elapsedtime portion of the contract at the time of the unavailability, or mayexercise the option provided by subsection (b).
(b) A buyer has the option, instead of the proportional refundprovided in subsection (a), to choose to complete the unused portionof the contract, including renewal periods, at another location that isowned, controlled, affiliated with, or operated by the seller. Amodification of the contract must be made in writing.
(c) This section does not restrict a health spa's ability to:
(1) make improvements to the facilities or services; or
(2) replace a facility or service with a superior facility orservice.
(d) If a health spa ceases to provide services or access to facilitiesin order to perform regular maintenance or to repair equipment, abuyer may not exercise the rights provided in subsection (a) or (b)until the health spa has failed to provide services or access tofacilities for a continuous period of thirty (30) days. However, if ahealth spa that has ceased to provide services or access to facilitiesin order to perform regular maintenance or repair equipment isunable to resume providing services or access to facilities withinthirty (30) days due to circumstances beyond the control of theoperator of the health spa, a buyer may not exercise the rightsprovided in subsection (a) or (b) until the health spa has failed toprovide services or access to facilities for a continuous period ofsixty (60) days.
As added by P.L.24-1989, SEC.18.
IC 24-5-7-17
Violations by buyer or seller; actions; penalties
Sec. 17. A purchaser of a health spa facility or a seller whoviolates this chapter commits a deceptive act that is actionable by theattorney general or by a buyer under IC 24-5-0.5, and is subject to the
penalties set forth in that chapter.
As added by P.L.249-1983, SEC.1. Amended by P.L.24-1989,SEC.19.
IC 24-5-7-18
Enforcement powers
Sec. 18. The secretary of state shall have all powers necessary toaccomplish the responsibilities assigned to him in this chapterincluding but not limited to the authority to compel the production offinancial statements and such other information as the secretary ofstate may deem necessary.
As added by P.L.249-1983, SEC.1.