Under what circumstances are liquidated damages clauses in the Bumper Man Franchise Agreement unenforceable in California?

According to the 2025 Bumper Man Franchise Disclosure Document, certain liquidated damages clauses within the Franchise Agreement are unenforceable in California. Specifically, the FDD references California Civil Code Section 1671, which governs the enforceability of these clauses. This means that if a liquidated damages provision does not comply with Section 1671, Bumper Man cannot legally enforce it against a franchisee in California.

For a prospective Bumper Man franchisee in California, this is an important protection. Liquidated damages clauses typically specify a predetermined amount of money one party must pay to the other in the event of a breach of contract. If such a clause is deemed unenforceable under California law, Bumper Man would not be able to automatically collect the specified amount. Instead, they would likely need to prove actual damages in court, which can be a more difficult and uncertain process.

It is crucial for potential franchisees to consult with a legal professional to review the Bumper Man Franchise Agreement and understand the implications of any liquidated damages clauses. An attorney can assess whether these clauses are likely to be enforceable under California law, given the specific circumstances and the requirements of California Civil Code Section 1671. This due diligence can help a franchisee avoid potentially unfair or excessive penalties in the event of a dispute with Bumper Man.