Does the exclusion of liability for certain damages apply to Embassy Suites' liability for violation of Microsoft's intellectual property rights?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
To the maximum extent permitted by applicable law, neither you, your affiliates or suppliers, nor Microsoft, its affiliates or suppliers will be liable for any indirect damages (including, without limitation, consequential, special or incidental damages, damages for loss of profits or revenues, business interruption, or loss of business information) arising in connection with any agreement, product, or fix, even if advised of the possibility of such damages or if such possibility was reasonably foreseeable.
This exclusion of liability does not apply to either party's liability to the other for violation of the other party's intellectual property rights.
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, the exclusion of liability for certain damages does not apply to either party's liability to the other for violation of the other party's intellectual property rights. This means that if Embassy Suites were to infringe on Microsoft's intellectual property rights, the standard limitations on liability for indirect damages would not apply.
This provision is important for prospective Embassy Suites franchisees because it clarifies the extent to which liability is limited in cases of intellectual property infringement. Typically, agreements often include clauses that limit liability for various types of damages, such as consequential or incidental damages. However, this specific clause carves out an exception, ensuring that if either party infringes on the other's intellectual property rights, they can be held fully liable without the protection of limited liability.
For a franchisee, this could mean that if they were found to be using Microsoft software or other intellectual property in a way that infringes on Microsoft's rights, Embassy Suites would not be able to shield itself from liability using the standard exclusion for certain damages. This could potentially increase the financial risk to Embassy Suites in such situations, as they could be responsible for a broader range of damages.
This type of clause is relatively common in franchise agreements to protect intellectual property rights, which are critical to both the franchisor and franchisee. It ensures that there are strong disincentives against infringement and provides a clear legal pathway for recourse if infringement occurs. Franchisees should be aware of this provision and ensure they fully comply with all intellectual property laws and licensing agreements related to any software or other intellectual property used in their Embassy Suites business.