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Review Your SQE 1 Practice Records

Examination Timing: 00H00M02S

Alex signed up for a membership with a gym. The agreement itself ran into several pages of small print, so Alex simply signed it, assuming that most gym membership agreements would be in a standard form. After a few weeks, Alex decided that he wanted to cancel, but when he read the termination clause under the agreement, it stated that the membership was to last for a period of three years from the date of signature. There were no clauses allowing for early termination by Alex; however, the gym could terminate the agreement at any time, for any reason, at their sole discretion. 

Can the court intervene to terminate the agreement?

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The clause allowing the gym to terminate the agreement at any time while not allowing Alex any means of early termination is likely to be found unfair under the Consumer Rights Act 2015. The Act at Schedule 2, Part 1 provides examples of terms that are considered prima facie unfair. Specifically, a term that authorises the trader to dissolve the contract on a discretionary basis where the same facility is not granted to the consumer (paragraph 7) would be considered unfair. When a term is found to be unfair, it is not legally binding on the consumer. Hence, the court can intervene and either strike out the unfair term or provide relief to the consumer, making Option B the correct answer. 

Key Point: Under the Consumer Rights Act 2015, terms in consumer contracts that create a significant imbalance in the parties' rights and obligations, to the detriment of the consumer, can be deemed unfair and thus not enforceable.

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