Who bears the responsibility of understanding the significance and consequence of waiving Section 1542 of the Civil Code of the State of California in the Clear Pest Pros agreement?
Clear_Pest_Pros Franchise · 2025 FDDAnswer from 2025 FDD Document
Except as set forth herein, FRANCHISOR, FRANCHISE OWNER(S) and FRANCHISEE expressly waives and relinquishes all rights and benefits afforded by Section 1542 of the Civil Code of the State of California ("Section 1542"), and does so understanding and acknowledging the significance and consequence of such specific waiver of Section 1542. Section 1542 states as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH EITHER PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN ITS FAVOR AS OF THE DATE OF EXECUTION OF THIS AGREEMENT, WHICH IF KNOWN BY SUCH PARTY WOULD HAVE MATERIALLY AFFECTED THE TERMS OF THE AGREEMENT."
Notwithstanding the provisions of Section 1542, and for the purpose of implementing the general release and discharges described in this paragraph, FRANCHISOR, FRANCHISE OWNER(S) and FRANCHISEE expressly acknowledge that this Agreement is intended to include in its effect without limitation, all claims described in this paragraph which FRANCHISOR, FRANCHISE OWNER and/or FRANCHISEE does not know or suspect to exist in its favor at the time of execution hereof, and that this Agreement contemplates the extinguishment of any such claims.
Source: Item 22 — CONTRACTS (FDD pages 67–68)
What This Means (2025 FDD)
According to Clear Pest Pros' 2025 Franchise Disclosure Document, both the franchisor, the franchise owner(s), and the franchisee are responsible for understanding and acknowledging the significance and consequence of waiving Section 1542 of the Civil Code of the State of California. This waiver applies specifically to franchise agreements within California.
Section 1542 of the California Civil Code states that a general release does not extend to claims which either party does not know or suspect to exist at the time of the agreement, but which, if known, would have materially affected the terms of the agreement. By waiving this section, all parties agree to release each other from all claims, known or unknown, that may arise prior to the date of the release. This means that even if a party later discovers a claim that existed at the time of the agreement but was unknown, they are still waiving their right to pursue that claim.
For a prospective Clear Pest Pros franchisee in California, this waiver has significant implications. It is crucial to fully understand the rights being relinquished and to carefully consider any potential claims that could arise. It would be prudent to seek legal counsel to review the franchise agreement and ensure a complete understanding of the waiver's impact. This is especially important given that the waiver covers claims that are not yet known or suspected. Clear Pest Pros franchise agreements used outside of California do not contain this clause.