What are the notice and cooperation obligations of a party seeking defense or settlement of a third-party claim under Section 7 of the Crowne Plaza FDD?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.4 Notice and Cooperation. The party seeking defense or settlement of a third-party claim under this Section 7 will provide notice to the other party promptly upon learning of any claim for which defense or settlement may be sought, but failure to do so will have no effect except to the extent the other party is prejudiced by the delay. The party seeking defense or settlement will allow the other party to control the defense and settlement of the claim and will reasonably cooperate with the defense. The defending party will use counsel reasonably experienced in the subject matter at issue and will not settle a claim without the written consent of the party being defended, which consent will not be unreasonably withheld or delayed, except that no consent will be required to settle a claim where relief against the party being defended is limited to monetary damages that are paid by the defending party under this Section 7.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to the 2025 Crowne Plaza Franchise Disclosure Document, Section 7.4 outlines the obligations regarding notice and cooperation when a party seeks defense or settlement of a third-party claim. The party seeking defense or settlement must promptly notify the other party upon learning of any claim for which defense or settlement is being considered. However, a failure to provide prompt notice will only have an effect if the delay prejudices the other party.
The party seeking defense or settlement is required to allow the other party to control the defense and settlement of the claim. Additionally, they must reasonably cooperate with the defense efforts. The defending party is expected to use counsel that is reasonably experienced in the subject matter at issue.
The defending party cannot settle a claim without the written consent of the party being defended. However, this consent cannot be unreasonably withheld or delayed. An exception exists where no consent is required if the relief against the party being defended is limited to monetary damages that are paid by the defending party under Section 7. This means that if the settlement only involves the defending party paying money, they do not need the other party's consent to settle the claim.