Are there any exceptions to the 'Covenant Not to Sue' clause in the General Release for Amerispec Inspection Services?
Amerispec_Inspection_Services Franchise · 2025 FDDAnswer from 2025 FDD Document
n Section 1 is given may turn out to be different from the facts now known or believed by them to be true and (b) hereby accept and assume the risk of the facts turning out to be different and agree that the release in Section 1 shall nevertheless be effective in all respects and not subject to termination or rescission by virtue of any such difference in facts.
- 3. Covenant Not to Sue. Franchisee, Transferee, and Owners (on behalf of all Releasors) covenant not to initiate, prosecute, encourage, assist, or (except as required by law) participate in any civil, criminal, or administrative proceeding or investigation in any court, agency, or other forum, either affirmatively or by way of cross-claim, defense, or counterclaim, against any person or entity released under Section 1 with respect to any Claim released under Section 1.
- **4.
Source: Item 23 — Receipts (FDD pages 47–172)
What This Means (2025 FDD)
According to the 2025 Amerispec Inspection Services FDD, there is an exception to the 'Covenant Not to Sue' clause. Franchisee, Transferee, and Owners (on behalf of all Releasors) covenant not to initiate, prosecute, encourage, assist, or participate in any civil, criminal, or administrative proceeding against any person or entity released under Section 1 with respect to any Claim released under Section 1, except as required by law. This means that while franchisees generally agree not to sue Amerispec Inspection Services or related parties regarding released claims, they are not prevented from participating in legal proceedings if legally obligated to do so. This exception acknowledges that legal requirements may sometimes override the covenant not to sue.
Additionally, the FDD includes a waiver of statutory preservation provisions, specifically referencing Section 1542 of the California Civil Code. This section states that a general release does not extend to claims that the releasing party does not know or suspect to exist at the time of executing the release, and that, if known, would have materially affected the settlement. By waiving this provision, franchisees are agreeing to release claims even if they are currently unknown, which could have significant implications if unforeseen issues arise later.
This waiver and the covenant not to sue are standard legal clauses intended to protect Amerispec Inspection Services from future litigation. However, franchisees should carefully consider the implications of releasing unknown claims and understand their rights and obligations under the agreement. It is advisable to seek legal counsel to fully understand the scope and impact of these provisions before signing the franchise agreement.