In a legal proceeding related to the Learningrx agreement, who is responsible for legal costs?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
- 18.7 Legal Costs.
If either party institutes a legal proceeding in a court of law with valid jurisdiction and prevails entirely or in part in any action at law or in equity against the other party based entirely or in part on the terms of this Agreement, the prevailing party shall be entitled to recover from the losing party, in addition to any judgment, reasonable attorneys' fees, court costs and all of the prevailing party's expenses in connection with any action at law.
This section shall not apply to arbitration as more fully set forth in Section 16 of this Agreement.
The parties agree to each bear their own legal costs and other expenses incurred as part of any arbitration conducted in accordance with this Agreement.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to the 2025 Learningrx Franchise Disclosure Document, the responsibility for legal costs in the event of a legal proceeding depends on the outcome and the type of proceeding. If a party initiates a legal proceeding in court and prevails against the other party, the prevailing party is entitled to recover reasonable attorneys' fees, court costs, and all expenses from the losing party. This applies to actions based on the terms of the Learningrx agreement.
However, this cost-shifting arrangement does not apply to arbitration. In the case of arbitration, which is addressed in Section 16 of the agreement, each party is responsible for bearing their own legal costs and expenses. This means that regardless of who wins the arbitration, each side pays its own way.
This clause encourages parties to resolve disputes amicably or through means other than litigation, as going to court could result in bearing the other party's legal expenses if unsuccessful. Franchisees should carefully consider this provision and understand the implications of pursuing legal action against Learningrx.