Under what circumstances is a party excused from fulfilling obligations under the Aplus agreement due to Force Majeure?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
- 13.8 Force Majeure.
No Party shall be deemed in default of this Agreement for any delay or failure to fulfill any obligation (other than a payment obligation) hereunder so long as and to the extent to which any delay or failure in the fulfillment of such obligation is prevented, frustrated, hindered or delayed as a consequence of circumstances of Force Majeure, which shall be defined as those significant events outside the party's control, including but not limited to Acts of God, fire, flood, or other natural forces, war, acts of terrorism, civil unrest, government actions or regulations, national pandemic, or any other event similar to those enumerated above.
Such excuse from liability shall be effective only to the extent and duration of the event(s) causing the failure or delay in performance and provided that the Party has not caused such event(s) to occur and continues to use diligent, good faith efforts to avoid the effects of such event and to perform the obligation.
A Party claiming the benefit of this provision shall, as soon as reasonably practicable after the occurrence of any such event, (a) provide written notice to the other Party of the nature and extent of any such Force Majeure condition; (b) use commercially reasonable efforts to remove any such causes and resume performance under this Agreement, as applicable, as soon as reasonably practicable; and (c) otherwise continue performing its obligations hereunder.
- 13.9. Timing.
Time is of the essence with respect to all provisions in this Agreement.
Notwithstanding the foregoing, if performance of either party is delayed on account of a Force Majeure, the applicable deadline for performance shall be extended for a period commensurate with the Force Majeure, but not to exceed 12 months.
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, a party is excused from fulfilling their obligations under the agreement if their failure or delay is due to circumstances of Force Majeure. Force Majeure is defined as significant events outside the party's control. These events include, but are not limited to, Acts of God, fire, flood, other natural forces, war, acts of terrorism, civil unrest, government actions or regulations, national pandemic, or any other similar event. However, this excuse does not apply to payment obligations.
For Aplus to consider the excuse valid, the event must be the direct cause of the failure or delay. The party claiming Force Majeure must not have caused the event and must continue to make diligent, good-faith efforts to avoid the event's effects and perform the obligation. The excuse from liability is effective only for the extent and duration of the event causing the failure or delay in performance.
Furthermore, the party claiming the benefit of the Force Majeure provision must provide written notice to the other party as soon as reasonably practicable after the occurrence of such an event. They must also use commercially reasonable efforts to remove the causes of the Force Majeure and resume performance under the agreement as soon as reasonably practicable, while continuing to perform their other obligations under the agreement. If performance is delayed due to Force Majeure, the deadline for performance will be extended for a period commensurate with the Force Majeure, but not exceeding 12 months. This clause ensures that Aplus franchisees are not penalized for circumstances genuinely beyond their control, while also requiring them to actively mitigate the impact and resume operations as soon as possible.