Under what circumstances are liquidated damages clauses in the Amorino franchise agreement unenforceable according to California Civil Code Section 1671?

According to Amorino's 2025 Franchise Disclosure Document, the franchise agreement contains a liquidated damages clause. The FDD states that under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable.

This disclosure is crucial for prospective Amorino franchisees in California because it highlights that not all terms in the franchise agreement are automatically enforceable under California law. Specifically, if a liquidated damages clause is deemed unenforceable under California Civil Code Section 1671, Amorino may not be able to collect the predetermined amount of damages specified in the contract if the franchisee breaches the agreement.

It is important for a potential franchisee to seek legal counsel to fully understand the implications of this clause and to determine under what specific circumstances the liquidated damages clause might be deemed unenforceable. This could significantly impact the franchisee's potential liability in case of a dispute or breach of contract.