Andrew had decided to buy a gym membership from “24-7 Fitness”, so he made an appointment to visit Corrie, the sales representative at the gym. Andrew was very excited about all the things that Corrie promised – access to the club any day, at any time, use of the swimming pool and squash courts as well as the gym, and towel service (fresh towels at the gym for members’ use.) Corrie provided him with the contract to sign.
Andrew noticed that there was nothing in the contract about access to the club at any day or any time. In fact, there was no mention of hours of operation. Andrew asked Corrie about this and told her that this was an important feature for him, since he was a firefighter and had odd hours of work. He also needed to keep fit for his job, so he needed access to a gym that was open 24 hours a day.
“Look,” said Corrie, “we wouldn’t be called 24-7 Fitness if we weren’t open 24 hours a day, 7 days a week!” Corrie assured him that he would have the access he needed to the gym.
The contract also included a clause that said “there are no representations or warranties except as expressly provided herein.” Another clause said “this contract shall be construed according to the laws of Ontario.” Under the heading “List of Services”, there was a clause that said “members shall have access to the gym, swimming pool and squash courts” and another clause that said “towel service shall be provided to members free of charge.” Andrew was happy with the contract, particularly since he enjoyed swimming and playing squash, and wanted to do those activities in addition to working out at the gym.
Andrew signed the contract, paid the $600 annual membership fee by credit card, and received his passcard to the gym.
The next day, Andrew went to work out at 4 am, and was shocked to find that the doors to the gym were closed. He called the gym and heard the usual recording, which did not indicate that there was any reason that the gym should be closed. A few days later, Andrew tried again, and was very angry when he could not access the gym at 3 am. The lights were on, but the doors to the gym were locked. When Andrew called the gym, he could not get hold of Corrie. He left her several messages, asking why he did not have access to the gym on the two days he had been there at 3 am and 4 am. The following weekend, Andrew went to the gym on Saturday afternoon, and had a great workout. When he went to the change room and asked for a towel, the attendant told him that he would have to pay $2 for this service each time he came to the gym. Andrew was furious!
He went into the Manager’s office and told him that he wanted his money back. The Manager apologized, but said that it would not be possible to refund his money. He also told him that the staff closed the gym if there was no one there for more than 2 hours, and that they had never guaranteed access to the club 24 hours a day. When Andrew told him that he had been promised 24 hour access by Corrie, the manager replied that Corrie no longer worked for them, and that he had no way of knowing what Corrie did or didn’t tell him.
Extremely frustrated and angry, Andrew left the Manager’s office and drove home. He was planning to call his lawyer as soon as he got home. Unfortunately, Andrew’s misfortunes were not over. While Andrew was stopped at a stop sign, a drunk driver (Liam) slammed into the back of his car. Andrew suffered severe injuries requiring surgery and life-long pain. He was also unable to continue working as a firefighter, and had to get an office job with a government office. Sadly, Andrew fell into a deep depression as a result of all of these changes to his life.
Identify and analyze the legal issues that arise in this case. How would you advise Andrew? Be thorough in your analysis and explanation.
Ans. Andrew’s case is a clear example of misrepresentation on the part of 24- 7 fitness. Andrew stated his requirements in the initial discussion with an agent of the firm or the business only and the Agent insisted upon the membership in order to fulfill the needs of Andrew. The organization hence is bound by the Principle of agency where they have to take responsibility of the actions or deed done by the agent or even former agent while he/ she was an agent of the principle in regards with the third party. It is a the duty of the principle to indemnify the agent in concern with any kind of act done by the agent with an idea of good faith for the company or the organization even if such an act violates the rights of the third parties. Even in case of any negligent or a deliberate act as stated in the case study will be included in the principle agent relationship between the organization and Corrie as it played or represented the organization in front of the third party here who is Andrew. Hence in this case, Andrew can claim for compensation as well as claim the amount he paid for the membership back from 24- 7 fitness. It also includes the verbal communications or promises being made on part of the agent or even the organization by fair or unfair means. Corrie in this case committed a fraudulent misrepresentation as stated in the case of Queen v. Cognos Inc. as well as the case of Shortt v. MacLennan is quite similar to this scenario (Supreme Court of Canada, 2020). Tort of Deceit is another name for that fraudulent misrepresentation done by Corrie on behalf of the organization. Such situation might happen where it is alleged that a Defendant made knowingly false statements that directly or indirectly encouraged the Plaintiff to do business with a third party per doctrine established within the centuries old English case of Pasley v. Freeman (1789), 100 E.R. 45 which (Case Briefs, 2020) was cited in Canadian law within the case of Toronto-Dominion Bank v. Mapleleaf Furniture Manufacturing Ltd., 2003 CanLII 22203 (Marketing.Legal, 2020).
Based upon the case of Business Development Bank of Canada v Experian Canada, it can be concluded that any kind of misrepresentation done during the time of pre- contract, gives rise to tort action where the second party has been solely relying on the same for the contract to be carried out (Lifshitz, 2017). In this case, Andrew solely relied upon the words of Corrie of the gym being 24 -7 open based upon his convenience. As stated in the judgment passed in the abovementioned case, the defendant had actually made some very noticeable misrepresentations making the other party believe them regarding the software they were selling or had provided for sale and to attract more client base. It was observed by the honorable judge that the act was illegal and the plaintiff was able to claim around $ 44 million for the same from the defendant. Hence even in this case, there are only two remedies according to which the case can be resolved. One is the rescission while the others include the damages. In this case of Andrew, the most appropriate remedies is the damages. Claim for damages caused and the compensation for what has happened can be claimed from the organization by Andrew.
Bibliography
Case Briefs, 2020. Pasley v. Freeman. [Online] Available at: https://www.casebriefs.com/blog/law/torts/torts-keyed-to-epstein/misrepresentation/pasley-v-freeman/ [Accessed 03 October 2020].
Lifshitz, L.R., 2017. Procurement blues: well-run process did not avoid fraud. [Online] Available at: https://www.canadianlawyermag.com/news/opinion/procurement-blues-well-run-process-did-not-avoid-fraud/270522 [Accessed 04 October 2020].
Marketing.Legal, 2020. Can a Person Be Sued For Making False Statements When Negotiating a Contract? [Online] Available at: https://marketing.legal/EN/small-claims/focus-cases/tortious-conduct/deceit [Accessed 03 October 2020].
Supreme Court of Canada, 2020. Russell Shortt v. Margaret MacLennan et al. [Online] Available at: https://www.scc-csc.ca/case-dossier/info/sum-som-eng.aspx?cas=08642 [Accessed 03 October 2020].
