Under what circumstances are special, incidental, or consequential damages recoverable from either party under The Standardx agreement?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
- c. EXCEPT IN FULFILLMENT OF ANY INDEMNIFICATION OBLIGATIONS, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS OR LOSS OF USE DAMAGES) ARISING OUT OF THE SERVICES OR ANY OBLIGATIONS UNDER THIS AGREEMENT, WHETHER SUCH CLAIM IS BASED UPON BREACH OF CONTRACT, BREACH OF WARRANTY, TORT (INCLUDING NEGLIGENCE) OR ANY OTHER LEGAL THEORY, EVEN IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR LOSSES. EXCEPT IN FULFILLMENT OF
Source: Item 18 — OTHER INCOME (LOSS), NET (FDD pages 187–399)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, special, incidental, or consequential damages are generally not recoverable by either party, except in cases involving indemnification obligations. Specifically, both The Standardx (referred to as Hyatt in the document) and the franchisee (referred to as Owner) waive the right to claim such damages from each other, regardless of the legal theory behind the claim, even if the possibility of such damages was known. This waiver includes, but is not limited to, loss of profits or loss of use damages.
However, there is an exception to this limitation. If either party has indemnification obligations, they may be liable for special, incidental, or consequential damages as part of fulfilling those obligations. Indemnification typically involves compensating the other party for losses or damages arising from specific events, such as third-party claims.
This limitation of liability and waiver of certain damages is a significant aspect of The Standardx franchise agreement. Prospective franchisees should carefully consider the implications of this provision, as it could limit their ability to recover certain types of losses in the event of a dispute with The Standardx. It is advisable to seek legal counsel to fully understand the scope and potential impact of this clause.