Most dance studio owners are familiar with basic contract laws and employment-related legal requirements, and the general principles behind these laws are often fairly obvious.
However, little-known laws can have a major impact on dance studios across the country. In fact, numerous states have laws that specifically target dance studios. While these laws vary from state to state, they are typically decades-old statutes that can impose very specific and oftentimes onerous burdens.
The consequences of noncompliance can be steep, and, in certain circumstances, a violation can jeopardize the survival of a dance studio or even result in criminal charges.
How Did We Get Here?
At first blush, it may seem surprising that state lawmakers would focus on the dance industry at all. This focus traces back to court cases against Arthur Murray, Inc., and its franchisees. The well-known adult-focused ballroom-lesson franchise founded in the early 1900s grew so quickly that by 1946, Murray’s revenues were the equivalent of about $185 million today. Over the next few decades, numerous Arthur Murray franchises became embroiled in lawsuits that are still often studied in law schools due to their colorful fact patterns and importance to the development of contract law.
In those cases, the alleged conduct of the Arthur Murray schools was egregious. Usually, a victim alleged that they were sold extremely expensive dance-lesson packages through Arthur Murray’s high-pressure sales tactics. In one case from 1968, over the course of less than 16 months, a widow was sold more than 2,300 hours of dancing lessons for the equivalent of about $330,000 today. In another case from 1965, a widow in her late 60s was sold more than 4,000 hours of dance lessons for over $390,000 (in today’s dollars). After these litigations, states across the country began passing laws focused on dance studios with the aim of protecting dance students from predatory contracting practices.
The preamble to the California law governing dance lessons, the original version of which was adopted in 1969, illustrates the rising concern among state lawmakers at that time: “The Legislature declares that the purpose of this [law] is to safeguard the public against fraud, deceit, imposition, and financial hardship, and to foster and encourage competition, fair dealing, and prosperity in the field of dance studio lessons and other services by prohibiting or restricting false or misleading advertising, onerous contract terms, harmful financial practices, and other unfair, dishonest, deceptive, destructive, unscrupulous, fraudulent, and discriminatory practices by which the public has been injured in connection with contracts for dance studio lessons and other services.”
Many of the laws passed in the aftermath of the Arthur Murray lawsuits remain on the books today and continue to reflect the original intent of curbing potentially unfair practices in the industry through very specific requirements.
Examples of Dance Studio Law Requirements
These laws impact many studios. At least a third of the U.S. population lives in states with dance studio laws. Even though the original laws were written with adult ballroom studios in mind, the current laws typically apply to dance studios broadly even if the studios do not focus on adult lessons or ballroom dance. The laws are often found among a state’s business regulation or consumer protection laws. While the requirements of each dance studio law are state-dependent, some examples of specific state requirements include:
- Dance studios must register with the applicable state agency (for example, in Mississippi, the Attorney General’s Division of Consumer Protection, and in Nevada, the Consumer Affairs Unit of the Nevada Department of Business and Industry);
- Specific disclosures must be included in the student contract, including disclosures relating to pricing and customer cancellation rights;
- Dance studios must allow students to cancel (at any time with a refund) for the remaining portion of the contract;
- Dance studios must purchase a surety bond to protect the public from fraud, dishonesty or failure to provide contracted services;
- Lessons must start within a certain time period after the student contract is signed;
- Student contracts must expressly state that a student or their estate will not be required to pay for lessons upon the student’s death or disability [statute 815 ILCS 610/6(b)]
- The amount that may be charged under a student contract is limited; and
- Auto-renewal provisions in student contracts are prohibited.
Taking Dance Studio Laws Seriously
Like the exact legal requirement, the consequences for violating a dance studio law also differ depending on the state. Some dance studio laws specifically provide for civil and/or criminal penalties. In addition, some states allow students to receive triple damages for claims if they are successful with their claim of a violation. These consequences should provide dance studio owners ample incentive to ensure their studios are in compliance.
But, there is another common feature of dance studio laws that is very important.
Dance studio laws typically void any contract that does not comply with the legal guidelines. In other words, a dance studio would not be able to enforce the student’s obligations, including obligations to pay for lessons, if the contract is deemed void. That would be significant enough, but a less obvious impact of a void student contract relates to liability waivers.
It’s common for liability waivers to be included in student contracts. These waivers usually cover dance studios and their owners for any liability for a physical injury to a student that may occur during any lessons. If a student contract and the liability waiver within it are void because the contract does not follow the legal guidelines, the dance studio could lose a basic and effective contractual protection in the event a student suffers a catastrophic injury and sues the studio.
While dance studio owners might be largely unaware of the existence of these laws, their businesses could benefit from an increased awareness of, and compliance with, them as many dance studio owners may be unnecessarily putting their studio at risk by failing to follow the legal requirements under a dance studio law that applies to their studio. Careful review of applicable state requirements in consultation with legal counsel is well worth an owner’s time and attention.
Alan Wong is the general counsel of Ensemble Performing Arts, an owner and operator of dance studios around the country. This article should not be construed as legal advice or serve as a substitute for consulting an attorney. You are encouraged to seek the advice of an attorney who can advise you on how any applicable state law applies to your particular circumstances and business practices.