If you subscribed to a sports, dance, music, fitness, or any other activity before the Covid-19 pandemic, and the classes are no longer being held or you can no longer access the gym, here is some useful information about the validity of your subscription.
Under a mandate contract (Articles 394 et seq. CO), the mandatary is obligated to provide the services promised in the contract (cf. Art. 394 para. 1 CO). This category includes dance, music, sports, fitness classes, etc.
To determine your rights, you should first read the General Terms and Conditions of the activity. These may contain a clause excluding any reimbursement in case of objective impossibility, or a postponement in case of exceptional closure. If the General Terms and Conditions are silent on the matter, the general provisions of the Swiss Code of Obligations (CO) will apply, including impossibility of performance (Article 119 CO) or qualified default by the debtor (Articles 107 et seq. CO).
The Covid-19 pandemic is an exceptional and rare situation, making it uncertain whether this impossibility is temporary or enduring. Therefore, we will discuss both institutions until the legal situation becomes clearer.
Subsequent and Objective Impossibility – Article 119 CO:
Impossibility occurs when, after the birth of a valid obligation, circumstances arise that are not attributable to the debtor (e.g., fitness institution) which prevent the performance of the contract.
The performance must be impossible, meaning it can no longer be provided either by the debtor or a third party substituting for them. This is notably the case when such impossibility results from law, such as an administrative prohibition.
Furthermore, the impossibility must be enduring and definitive. A temporary impossibility falls under the rules of default (see below).
The consequence is that the obligation is extinguished, and the debtor is not required to compensate the creditor for the damage caused, provided they do everything in their power to mitigate the damage in good faith. Moreover, the debtor cannot claim from the creditor what was still owed, and must return what they have already received according to the rules of unjust enrichment. However, according to Article 119 para. 3 CO, the contract may place the risks on the creditor, who must bear the consequences of the impossibility. In other words, the debtor, thus relieved, retains their counterclaim and will not be required to return what has already been received. Therefore, it is very important to check the terms of the contract.
Qualified Default by the Debtor – Articles 107 et seq. CO:
In the context of a bilateral contract, Article 107 CO allows the creditor (e.g., holder of a fitness subscription) to terminate the contract.
Before terminating, the creditor must set a deadline for the debtor (e.g., fitness institution) – called a grace period – within which the debtor must perform their obligation (Article 107 para. 1 CO). However, the creditor can exercise their rights directly without setting an additional deadline, particularly when the performance of the contract must occur within a specific time frame. In this case, setting an additional deadline for the debtor to perform is unnecessary, as they cannot override measures imposed by the Federal Council, such as the closure of certain establishments like sports facilities. Therefore, immediate termination under Article 108 CO should fully apply.
However, the creditor who wishes to terminate the contract must notify the debtor immediately.
By this resolution, both parties are released from their obligations. The creditor may claim negative damages if the debtor has committed a fault. In this case, the closure of fitness centers is a measure imposed by the Federal Council, so no fault can be attributed to them.
With this resolution, the contract is “extinguished.” The termination creates a liquidation relationship under which each party must provide the necessary performance to restore the situation to what it was before the contract. The restitution of performances is made in value.
Therefore, the issue hinges on whether the impossibility related to Covid-19 can be considered enduring. If so, the consequences provided by Article 119 will apply; otherwise, the consequences of qualified default under Articles 107 et seq. will apply.
In summary, a person wishing to terminate their contract must first check the content of the General Terms and Conditions, which may exclude the legal system and provide special rules. In the absence of such information, there are two legal ways to terminate the contract, depending on whether the impossibility is enduring or not. Some authors believe that the debtor’s impossibility due to Covid-19 is only temporary, so they will be able to perform once the restrictions are lifted. Others believe that only the cause of the impossibility is temporary, but the impossibility of performance is definitive/enduring, as the lost time cannot be recovered.
If you wish to obtain more information about your rights regarding the validity of a contract during the Covid-19 pandemic, our team of professionals would be delighted to welcome you to our offices at Rue du Valentin 1, 1004 Lausanne, to provide advice.
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