2010 Georgia Code 10-1-662 Case Law

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Graham W. Syfert, Esq.

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Phone: 904-383-7448
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Fax: 904-638-4726

Enter Code Number:
16-14-4 or 16-13-32

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2010 Georgia Code


§ 10-1-662 - Unlawful activities by franchisors

O.C.G.A. 10-1-662 (2010)
10-1-662. Unlawful activities by franchisors

(a) It shall be unlawful for any franchisor:

(1) To delay, refuse, or fail to deliver new motor vehicles or new motor vehicle parts or accessories in a reasonable time and in reasonable quantity if such vehicles, parts, or accessories are publicly advertised as being available for immediate delivery. This paragraph is not violated, however, if such failure is caused by acts or causes beyond the control of the franchisor;

(2) To obtain money, goods, services, or any other benefit from any other person with whom the dealer does business, on account of, or in relation to, the transaction between the dealer and such other person, other than as compensation for services rendered, unless such benefit is promptly accounted for and transmitted to the dealer;

(3) To release to any outside party, except under subpoena or as otherwise required by law or in an administrative, judicial, or arbitration proceeding involving the franchisor or dealer, any business, financial, or personal information which may be from time to time provided by the dealer to the franchisor, without the express written consent of the dealer;

(4) To resort to or to use any false or intentionally deceptive advertisement in the conduct of business as a franchisor in this state;

(5) To make any false or intentionally deceptive statement, either directly or through any agent or employee, in order to induce any dealer to enter into any agreement or franchise or to take any action which is prejudicial to that dealer or that dealer's business;

(6) To require any dealer to assent prospectively to a release, assignment, novation, waiver, or estoppel which would relieve any person from liability to be imposed by law or to require any controversy between a dealer and a franchisor to be referred to any person other than the duly constituted courts of the state or the United States if such referral would be binding upon the dealer, provided that this Code section shall not prevent any dealer from entering into a valid release agreement with the franchisor;

(7) To fail to observe good faith in any aspect of dealings between the franchisor and the dealer;

(8) To deny any dealer the right of free association with any other dealer for any lawful purposes;

(9) To engage in any predatory practice or discrimination against any dealer;

(10) To propose or make any material change in any franchise agreement without giving the dealer written notice by certified mail or statutory overnight delivery of such change at least 60 days prior to the effective date of such change;

(11) To cancel a franchise or to take any adverse action against a dealer based in whole or in part on the failure of the dealer to meet the reasonable performance criteria established by the franchisor in light of existing circumstances, including but not limited to current and forecasted economic conditions, or when that failure is due to the failure of the franchisor to supply, within a reasonable period of time, new motor vehicles ordered by or allocated to the dealer;

(12) To offer to sell or lease or to sell or lease any new motor vehicle or accessory to any dealer at a lower actual price therefor than the actual price offered to any other dealer for the same model vehicle similarly equipped or same accessory or to use any device, including but not limited to an incentive, sales promotion plan, or other similar program, which results in a lower actual price of a vehicle or accessory being offered to one dealer and which is not offered to other dealers of vehicles of the same line-make or the same accessory;

(13) To conduct an audit, investigation, or inquiry of any dealer or dealership as to any activity, transaction, conduct, or other occurrence which took place or as to any promotion or special event which ends more than one year prior to such audit, investigation, or inquiry or to base any decision adverse to the dealer or dealership on any activity, transaction, conduct, or other occurrence which took place or as to any promotion or special event which ends more than one year prior to such decision or which took place any time prior to the period of time covered by such audit, investigation, or inquiry or to apply the results of an audit, investigation, or inquiry to any activity, transaction, conduct, or other occurrence which took place any time prior to the time covered by such audit, investigation, or inquiry;

(14) To charge back to, deduct from, or reduce any account of a dealer or any amount of money owed to a dealer by a franchisor any amount of money the franchisor alleges is owed to such franchisor by such dealer as a result of an audit, investigation, or inquiry of such dealer or based upon information obtained by the franchisor through other resources which relates to any transaction that occurred more than 12 months prior to notice to the dealer of the charge back or deduction, but rather if a franchisor alleges that a dealer owes such franchisor any amount of money as a result of an audit, investigation, or inquiry, such franchisor shall send a notice to such dealer for such amount and the dealer shall have not less than 30 days to contest such amount or remit payment;

(15) To deny, delay payment for, restrict, or bill back a claim by a dealer for payment or reimbursement for warranty service or parts, incentives, hold-backs, special program money, or any other amount owed to such dealer unless such denial, delay, restriction, or bill back is the direct result of a material defect in the claim which affects the validity of the claim;

(16) To engage in business as a dealer or to manage, control, or operate, or own any interest in a dealership either directly or indirectly, if the primary business of such dealer or dealership is to perform repair services on motor vehicles, except motor homes, pursuant to a manufacturer's or franchisor's warranty;

(17) To refuse to allow, to limit, or to restrict a dealer from maintaining, acquiring, or adding a sales or service operation for another line-make of motor vehicles at the same or expanded facility at which the dealer currently operates a dealership unless the franchisor can prove by a preponderance of the evidence that such maintenance, acquisition, or addition will substantially impair the dealer's ability to adequately sell or service such franchisor's motor vehicles;

(18) To directly or indirectly condition a franchise agreement or renewal of a franchise agreement, addition of a line-make, approval of relocation, or approval of a sale or transfer on the dealer's or prospective dealer's willingness to enter into a site control agreement; provided, however, that this paragraph shall not apply to a voluntary agreement when separate and adequate consideration is paid to the dealer. The franchisor shall have the burden of proof to show the voluntary, noncoerced acceptance of the site control agreement by the dealer; or

(19) To charge back, withhold payment, deny vehicle allocation, or take other adverse action against a dealer when a new vehicle sold by the dealer has been exported to a foreign country unless the franchisor can demonstrate that the dealer knew or reasonably should have known that the customer intended to export or resell the new vehicle. There shall be a rebuttable presumption that the dealer had no such knowledge if the vehicle is titled or registered in any state in this country.

(b) No action shall in any way be based on this Code section with respect to acts occurring prior to July 1, 1983.

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Phone: 904-383-7448
Fax: 904-638-4726