Under what circumstances is Brain Balance not liable for special, indirect, incidental, exemplary, or consequential losses or damages?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) LICENSOR SHALL NOT BE LIABLE IN CONTRACT, TORT, OR BREACH OF STATUTORY DUTY OR OTHERWISE FOR ANY SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY OR CONSEQUENTIAL LOSSES OR DAMAGES, INCLUDING, WITHOUT LIMITATION FOR ANY LOST PROFITS, LOSS OF GOODWILL, ECONOMIC CONSEQUENCES OR LOSS OF DATA EVEN IF LICENSOR HAS BEEN ADVISED OF OR FORESAW THE POSSIBILITY OF ANY SUCH DAMAGES.
- (d) LICENSOR'S AGGREGATE LIABILITY TO LICENSEE ARISING FROM ANY CLAIM OR CIRCUMSTANCE RELATING TO THIS AGREEMENT INCLUDING, WITHOUT LIMITATION, FOR BREACH OF ANY OBLIGATION RELATING TO THE QUALITY OR PERFORMANCE OF THE SOFTWARE, SOFTWARE MATERIALS AND/OR THE HOSTING SERVICES THAT LICENSOR MAY LAWFULLY LIMIT, IS LIMITED TO THE AMOUNT OF THE FEES PAID BY LICENSEE TO LICENSOR PURSUANT TO THIS AGREEMENT FOR THE TWELVE (12) MONTHS IMMEDIATELY PRIOR TO THE EARLIEST EVENT GIVING RISE TO LICENSOR'S LIABILITY.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to the 2025 Brain Balance Franchise Disclosure Document, the licensor is not liable for special, indirect, incidental, exemplary, or consequential losses or damages under certain conditions related to the data feed provided to the licensee. This includes instances of lost profits, loss of goodwill, economic consequences, or loss of data, even if the licensor was aware of the potential for such damages. This limitation of liability applies whether the claim arises in contract, tort, breach of statutory duty, or otherwise.
This means that as a Brain Balance franchisee, you may not be able to recover certain types of damages from the licensor, even if the licensor's actions or failures cause you to incur those damages. The agreement specifically mentions that this includes lost profits or loss of goodwill, which can be significant for a business.
Furthermore, the licensor's total liability to the franchisee for any claim related to the agreement is capped at the amount of fees paid by the franchisee to the licensor in the 12 months before the event that led to the liability. This limitation applies to breaches of obligations related to the quality or performance of the software, software materials, and/or hosting services. This could significantly limit the amount of compensation a franchisee can receive, even if they experience substantial losses due to the licensor's actions or omissions. Franchisees should carefully consider this limitation of liability and potentially seek legal advice to understand its implications fully.
It is important for prospective Brain Balance franchisees to understand these limitations and how they might impact their business. Franchisees should also be aware that they are required to indemnify, defend, and hold the licensor harmless from any third-party claims arising from their use of the software, software materials, or data feed.