Exculpatory language in franchise agreement ruled void
In a decision released on May 9, the Wisconsin Court of Appeals ruled that an exculpatory clause in a franchise agreement that no representations were being made regarding the income or success of the franchise was not sufficient to exclude claims for misrepresentation. C&M Hardware, LLC v. True Value Company. The court found that by not expressly excluding the tort of misrepresentation the contract language failed to adequately inform the potential franchisee that it was waiving claims of misrepresentation. A good reminder when drafting any representation and warranty provisions to be specific.
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