§ 31-5.1-4 Violations. – (a) It shall be deemed a violation of this chapter for any manufacturer ormotor vehicle dealer to engage in any action which is arbitrary, in bad faith,or unconscionable and which causes damage to any of the parties involved or tothe public.
(b) It shall be deemed a violation of this chapter for amanufacturer, or officer, agent, or other representative of a manufacturer, tocoerce, or attempt to coerce, any motor vehicle dealer:
(1) To order or accept delivery of any motor vehicle orvehicles, equipment, parts, or accessories for them, or any other commodity orcommodities which the motor vehicle dealer has not voluntarily ordered.
(2) To order or accept delivery of any motor vehicle withspecial features, accessories, or equipment not included in the list price ofthat motor vehicle as publicly advertised by the manufacturer of the vehicle.
(3) To participate monetarily in an advertising campaign orcontest, or to purchase any promotional materials, or training materials,showroom or other display decorations or materials at the expense of the newmotor vehicle dealership.
(4) To enter into any agreement with the manufacturer or todo any other act prejudicial to the new motor vehicle dealer by threatening toterminate or cancel a franchise or any contractual agreement existing betweenthe dealer and the manufacturer; except that this subdivision is not intendedto preclude the manufacturer or distributor from insisting on compliance withthe reasonable terms or provisions of the franchise or other contractualagreement, and notice in good faith to any new motor vehicle dealer of the newmotor vehicle dealer's violation of those terms or provisions shall notconstitute a violation of the chapter.
(5) To refrain from participation in the management of,investment in, or acquisition of any other line of new motor vehicle or relatedproducts. This subdivision does not apply unless the new motor vehicle dealermaintains a reasonable line of credit for each make or line of new motorvehicle, the new motor vehicle dealer remains in compliance with any reasonablefacilities requirements of the manufacturer, and no change is made in theprincipal management of the new motor vehicle dealer.
(6) To assent to a release, assignment, novation, waiver, orestoppel in connection with the transfer or voluntary termination of afranchise, or which would relieve any person from the liability to be imposedby this law or to require any controversy between a new motor vehicle dealerand a manufacturer, distributor, or representative to be referred to any personother than the duly constituted courts of this state or of the United States ofAmerica, or to the department of revenue of this state, if that referral wouldbe binding upon the new motor vehicle dealer.
(7) To order for any person any parts, accessories,equipment, machinery, tools or any commodities.
(c) It shall be deemed a violation of this chapter for amanufacturer, or officer, agent, or other representative:
(1) To refuse to deliver in reasonable quantities and withina reasonable time after receipt of the dealer's order, to any motor vehicledealer having a franchise or contractual arrangement for the retail sale of newmotor vehicles sold or distributed by the manufacturer, any motor vehiclescovered by the franchise or contract, specifically publicly advertised by themanufacturer to be available for immediate delivery. However, the failure todeliver any motor vehicle shall not be considered a violation of this chapterif that failure is due to an act of God, work stoppage or delay due to a strikeor labor difficulty, shortage of materials, a freight embargo, or other causeover which the manufacturer, distributor, or wholesaler, or its agent, shallhave no control.
(2) To refuse to deliver or otherwise deny to any motorvehicle dealer having a franchise or contractual arrangement for the retailsale of new motor vehicles sold or distributed by the manufacturer anyparticular new motor vehicle model made or distributed by the manufacturerunder the name of the division of the manufacturer of which the dealer is anauthorized franchise.
(3) It shall be deemed a prima facie violation of thischapter for any automotive vehicle division manufacturer to require anyseparate franchise or contractual arrangement with any new motor vehicle dealeralready a party to a franchise or contractual arrangement with that automotivevehicle division for the retail sale of any particular new motor vehicle modelmade or distributed by that division.
(4) To coerce, or attempt to coerce, any motor vehicle dealerto enter into any agreement with the manufacturer, or their officers, agents,or other representatives, or to do any other act prejudicial to the dealer, bythreatening to cancel any franchise or any contractual agreement existingbetween the manufacturer and the dealer. Notice in good faith to any motorvehicle dealer of the dealer's violation of any terms or provisions of thefranchise or contractual agreement shall not constitute a violation of thischapter.
(5) To resort to or use any false or misleading advertisementin connection with his or her business as a manufacturer, an officer, agent, orother representative.
(6) To sell or lease any new motor vehicle to, or through,any new motor vehicle dealer at a lower actual price therefore than the actualprice offered to any other new motor vehicle dealer for the same model vehiclesimilarly equipped or to utilize any device, including, but not limited to,sales promotion plans or programs, which result in a lesser actual price. Theprovisions of this paragraph shall not apply to sales to a new motor vehicledealer for resale to any unit of the United States government, or to the stateor any of its political subdivisions. A manufacturer may not reduce the priceof a motor vehicle charged to a dealer or provide different financing terms toa dealer in exchange for the dealer's agreement to:
(i) Maintain an exclusive sales or service facility;
(ii) Build or alter a sales or service facility; or
(iii) Participate in a floor plan or other financing.
(7) To sell or lease any new motor vehicle to any person,except a manufacturer's employee, at a lower actual price than the actual priceoffered and charged to a new motor vehicle dealer for the same model vehiclesimilarly equipped or to utilize any device which results in a lesser actualprice. The provisions of this paragraph shall not apply to sales to a new motorvehicle dealer for resale to any unit of the United States government, or tothe state or any of its political subdivisions.
(8) To offer in connection with the sale of any new motorvehicle or vehicles directly or indirectly to a fleet purchaser within orwithout this state terms, discounts, refunds, or other similar types ofinducements to that purchaser without making the same offer or offers availableto all of its new motor vehicles dealers in this state. No manufacturer mayimpose or enforce any restrictions against new motor vehicle dealers in thisstate or their leasing, rental, or fleet divisions or subsidiaries that are notimposed or enforced against any other direct or indirect purchaser from themanufacturer. The provisions of this paragraph shall not apply to sales to anew motor vehicle dealer for resale to any unit of the United Statesgovernment, or to the state or any of its political subdivisions.
(9) To use or consider the performance of a motor vehicledealer relating to the sale of the manufacturer's vehicles or the motor vehicledealer's ability to satisfy any minimum sales or market share quota orresponsibility relating to the sale of the manufacturer's new vehicles indetermining:
(i) The motor vehicle dealer's eligibility to purchaseprogram, certified, or other used motor vehicles from the manufacturer;
(ii) The volume, type, or model of program, certified, orother used motor vehicles that a motor vehicle dealer is eligible to purchasefrom the manufacturer;
(iii) The price of any program, certified, or other usedmotor vehicle that the dealer is eligible to purchase from the manufacturer; or
(iv) The availability or amount of any discount, credit,rebate, or sales incentive that the dealer is eligible to receive from themanufacturer for the purchase of any program, certified, or other used motorvehicle offered for sale by the manufacturer.
(10) To offer to sell or to sell parts or accessories to anynew motor vehicle dealer for use in the dealer's own business for the purposeof repairing or replacing the same parts or accessories or a comparable part oraccessory, at a lower actual price than the actual price charged to any othernew motor vehicle dealer for similar parts or accessories to use in thedealer's own business. In those cases where new motor vehicle dealers operateor serve as wholesalers of parts and accessories to retail outlets, theseprovisions shall be construed to prevent a manufacturer, or their agents, fromselling to a new motor vehicle dealer who operates and services as a wholesalerof parts and accessories, any parts and accessories that may be ordered by thatnew motor vehicle dealer for resale to retail outlets, at a lower actual pricethan the actual price charged a new motor vehicle dealer who does not operateor serve as a wholesaler of parts and accessories.
(11) To prevent or attempt to prevent by contract orotherwise any new motor vehicle dealer from changing the capital structure ofhis or her dealership or the means by which or through which the dealerfinances the operation of his or her dealership. However, the new motor vehicledealer shall at all times meet any reasonable capital standards agreed tobetween the dealership and the manufacturer, provided that any change in thecapital structure by the new motor vehicle dealer does not result in a changein the executive management control of the dealership.
(12) To prevent or attempt to prevent by contract orotherwise any new motor vehicle dealer or any officer, partner, or stockholderof any new motor vehicle dealer from selling or transferring any part of theinterest of any of them to any other person or persons or party or parties.Provided, however, that no dealer, officer, partner, or stockholder shall havethe right to sell, transfer or assign the franchise or power of management orcontrol without the consent of the manufacturer, except that the consent shallnot be unreasonably withheld.
(13) To obtain money, goods, services, anything of value, orany other benefit from any other person with whom the new motor vehicle dealerdoes business, on account of or in relation to the transactions between thedealer and that other person, unless that benefit is promptly accounted for andtransmitted to the new motor vehicle dealer.
(14) To compete with a new motor vehicle dealer operatingunder an agreement or franchise from the manufacturer in the state of RhodeIsland, through the ownership, operation, or control of any new motor vehicledealers in this state or by participation in the ownership, operation, orcontrol of any new motor vehicle dealer in this state. A manufacturer shall notbe deemed to be competing when operating, controlling, or owning a dealershipeither temporarily for a reasonable period in any case not to exceed one year,which one year period may be extended for a one-time additional period of up tosix (6) months upon application to and approval by the motor vehicle dealerslicense and hearing board, which approval shall be subject to the manufacturerdemonstrating the need for this extension, and with other new motor vehicledealers of the same line making being given notice and an opportunity to beheard in connection with said application, or in a bona fide relationship inwhich an independent person had made a significant investment subject to lossin the dealership and can reasonably expect to acquire full ownership of thedealership on reasonable terms and conditions within a reasonable period oftime.
(15) To refuse to disclose to any new motor vehicle dealer,handling the same line or make, the manner and mode of distribution of thatline or make within the relevant market area.
(16) To increase prices of new motor vehicles which the newmotor vehicle dealer had ordered for private retail consumers prior to the newmotor vehicle dealer's receipt of the written official price increasenotification. A sales contract signed by a private retail consumer shallconstitute evidence of an order provided that the vehicle is in fact deliveredto that customer. In the event of manufacturer price reductions or cash rebatespaid to the new motor vehicle dealer, the amount of any reduction or rebatereceived by a new motor vehicle dealer shall be passed on to the private retailconsumer by the new motor vehicle dealer. Price reductions shall apply to allvehicles in the dealer's inventory which were subject to the price reduction.Price differences applicable to new model or series motor vehicles at the timeof the introduction of new models or series shall not be considered a priceincrease or price decrease. Price changes caused by either: (i) the addition toa motor vehicle of required or optional equipment; (ii) revaluation of theUnited States dollar, in the case of foreign-make vehicles or components; or(iii) an increase in transportation charges due to increased rates imposed bycommon carriers, shall not be subject to the provisions of this subdivision.
(17) To release to any outside party, except under subpoenaor as otherwise required by law or in an administrative, judicial, orarbitration proceeding involving the manufacturer or new motor vehicle dealer,any business, financial, or personal information which may be from time to timeprovided by the new motor vehicle dealer to the manufacturer, without theexpress written consent of the new motor vehicle dealer.
(18) To unfairly discriminate among its new motor vehicledealers with respect to warranty reimbursement, or any program that providesassistance to its dealers, including Internet listings; sales leads; warrantypolicy adjustments; marketing programs; and dealer recognition programs.
(19) To unreasonably withhold consent to the sale, transfer,or exchange of the franchise to a qualified buyer capable of being licensed asa new motor vehicle dealer in this state.
(20) To fail to respond in writing to a request for consentas specified in subdivision (19) of this subsection within sixty (60) days ofthe receipt of a written request on the forms, if any, generally utilized bythe manufacturer or distributor for those purposes and containing theinformation required therein. The failure to respond shall be deemed to be aconsent to the request. A manufacturer may not impose a condition on theapproval of a sale, transfer, or exchange of the franchise if the conditionwould violate the provisions of this chapter if imposed on an existing dealer.
(21) To unfairly prevent a new motor vehicle dealer fromreceiving fair and reasonable compensation for the value of the new motorvehicle dealership.
(22) To require that a new motor vehicle dealer execute awritten franchise agreement that does not contain substantially the sameprovisions as the franchise agreement being offered to other new motor vehicledealers handling the same line or make. In no instance shall the term of anyfranchise agreement be of a duration of less than three (3) years.
(23) To require that a new motor vehicle dealer provideexclusive facilities, personnel, or display space taking into considerationchanging market conditions, or that a dealer execute a site control agreementgiving a manufacturer control over the dealer's facilities.
(24) To require that a dealer expand facilities without aguarantee of a sufficient supply of new motor vehicles to justify thatexpansion or to require that a dealer expand facilities to a greater degreethan is necessary to sell and service the number of vehicles that the dealersold and serviced in the most recent calendar year.
(25) To prevent a dealer from adjusting his or her facilitiesto permit a relocation of office space, showroom space, and service facilitiesso long as the relocation is within five hundred (500) yards of the presentlocation.
(26) To engage in any predatory practice against a new motorvehicle dealer.
(d) It shall be a violation of this chapter for amanufacturer to terminate, cancel, or fail to renew the franchise of a newmotor vehicle dealer except as provided in this subsection:
(1) Notwithstanding the terms, provisions, or conditions ofany franchise, whether entered into before or after the enactment of thischapter or any of its provisions, or notwithstanding the terms or provisions ofany waiver, whether entered into before or after the enactment of this chapteror any of its provisions, no manufacturer shall cancel, terminate, or fail torenew any franchise with a licensed new motor vehicle dealer unless themanufacturer has:
(i) Satisfied the notice requirement of this subsection;
(ii) Has good cause for the cancellation, termination, ornonrenewal;
(iii) Has not committed any violations set forth insubsection (b) of this section; and
(iv) Has acted in good faith as defined in this chapter andhas complied with all provisions of this chapter.
(2) Notwithstanding the terms, provisions, or conditions ofany franchise or the terms or provisions of any waiver, good cause shall existfor the purposes of a termination, cancellation, or nonrenewal when:
(i) There is a failure by the new motor vehicle dealer tocomply with a provision of the franchise which provision is both reasonable andof material significance to the franchise relationship, provided that thedealer has been notified in writing of the failure within one hundred eighty(180) days after the manufacturer first acquired knowledge of that failure;
(ii) If the failure by the new motor vehicle dealer, asprovided in paragraph (i) of this subdivision, relates to the performance ofthe new motor vehicle dealer in sales or service, then good cause shall bedefined as the failure of the new motor vehicle dealer to comply withreasonable performance criteria established by the manufacturer if the newmotor vehicle dealer was apprised by the manufacturer in writing of thatfailure; and:
(A) The notification stated that notice was provided offailure of performance pursuant to paragraph (i) of this subdivision;
(B) The new motor vehicle dealer was afforded a reasonableopportunity, for a period of not less than six (6) months, to comply with thosecriteria; and
(C) The new motor vehicle dealer did not demonstratesubstantial progress towards compliance with the manufacturer's performancecriteria during that period.
(3) The manufacturer shall have the burden of proof forshowing that the notice requirements have been complied with, that there wasgood cause for the franchise termination, cancellation or nonrenewal, and thatthe manufacturer has acted in good faith.
(i) Notwithstanding the terms, provisions, or conditions ofany franchise, prior to the termination, cancellation, or nonrenewal of anyfranchise, the manufacturer shall furnish notification of the termination,cancellation, or nonrenewal to the new motor vehicle dealer as follows:
(A) In the manner described in paragraph (ii) of thissubdivision; and
(B) Not fewer than ninety (90) days prior to the effectivedate of the termination, cancellation, or nonrenewal; or
(C) Not fewer than fifteen (15) days prior to the effectivedate of the termination, cancellation, or nonrenewal for any of the followingreasons:
(I) Insolvency of the new motor vehicle dealer, or the filingof any petition by or against the new motor vehicle dealer under any bankruptcyor receivership law;
(II) Failure of the new motor vehicle dealer to conduct hiscustomary sales and service operations during his or her customary businesshours for seven (7) consecutive business days;
(III) Final conviction of the new motor vehicle dealer, orany owner or operator of the dealership, of a crime which is associated with orrelated to the operation of the dealership;
(IV) Revocation of any license which the new motor vehicledealer is required to have to operate a dealership; or
(D) Not fewer than one hundred eighty (180) days prior to theeffective date of the termination or cancellation where the manufacturer ordistributor is discontinuing the sale of the product line.
(ii) Notification under this subsection shall be in writing,shall be by certified mail or personally delivered to the new motor vehicledealer, and shall contain:
(A) A statement of intention to terminate, cancel, or not torenew the franchise;
(B) A statement of the reasons for the termination,cancellation, or nonrenewal; and
(C) The date on which the termination, cancellation, ornonrenewal shall take effect.
(iii) Upon the involuntary or voluntary termination,nonrenewal, or cancellation of any franchise, by either the manufacturer or thenew motor vehicle dealer, notwithstanding the terms of any franchise whetherentered into before or after the enactment of this chapter or any of itsprovisions, the new motor vehicle dealer shall be allowed fair and reasonablecompensation by the manufacturer for the following:
(A) The new motor vehicle dealer's cost, less allowances paidby the manufacturer, of each new, undamaged, unsold and unaltered, except fordealer installed manufacturer-authorized accessories, motor vehicle, regardlessof model year purchased from the manufacturer or another dealer of the sameline-make in the ordinary course of business within twenty-four (24) months oftermination, having five hundred (500) or fewer miles recorded on the odometerthat is in the new motor vehicle dealer's inventory at the time of termination,nonrenewal, or cancellation.
(B) The new motor vehicle dealer's cost of each new, unused,undamaged, and unsold part or accessory that is in the current parts catalogueor is identical to a part or accessory in the current parts catalogue exceptfor the number assigned to the part or accessory due to a change in the numberafter the purchase of the part or accessory, and that is still in the original,resalable merchandising package and in an unbroken lot, except that, in thecase of sheet metal, a comparable substitute for the original package may beused.
(C) The fair market value of each undamaged sign, normal wearand tear excepted, owned by the dealer that bears a trademark or trade nameused or claimed by the manufacturer that were purchased as a requirement of themanufacturer.
(D) The fair market value of all special tools, andautomotive services equipment owned by the dealer that: (I) Were recommended inwriting and designated as special tools and equipment; (II) Were purchased as arequirement of the manufacturer; and (III) Are in usable and good conditionexcept for reasonable wear and tear.
(E) The cost of transporting, handling, packing, storing, andloading any property that is subject to repurchase under this section.
(F) The payments above are due within sixty (60) days fromthe date the dealer submits an accounting to the manufacturer of the vehicleinventory subject to repurchase, and for other items within sixty (60) daysfrom the date the dealer submits an accounting of the other items subject torepurchase, provided, the new motor vehicle dealer has clear title (or willhave clear title upon using the repurchase funds to obtain clear title) to theinventory and other items and is in a position to convey that title to themanufacturer. If the inventory or other items are subject to a securityinterest, the manufacturer, wholesaler, or franchisor may make payment jointlyto the dealer and the holder of the security interest. In no event shall thepayments be made later than ninety (90) days of the effective date of thetermination, cancellation, or nonrenewal.
(iv) In the event the termination, cancellation or nonrenewalis involuntary and not pursuant to subsection (3)(i)(C) of this section, and:
(A) The new motor vehicle dealer is leasing the dealershipfacilities from a lessor other than the manufacturer, the manufacturer shallpay the new motor vehicle dealer a sum equivalent to the rent for the unexpiredterm of the lease or (2) two year's rent, whichever is less; or
(B) If the new motor vehicle dealer owns the facilities, themanufacturer shall pay the new motor vehicle dealer a sum equivalent to thereasonable rental value of the facilities for two (2) years; if:
(I) The new motor vehicle dealer is unable to reasonablyutilize the facilities for another purpose;
(II) The new motor vehicle dealer, or the manufacturer actingas its agent, is unable to make arrangements for the cancellation or assumptionof its lease obligations by another party in the case of leased facilities, oris unable to sell dealer owned facilities, and
(III) Only to the extent those facilities were required as acondition of the franchise and used to conduct sales and service operationsrelated to the franchise product.
(v) In addition to any injunctive relief and any otherdamages allowable by this chapter, if the manufacturer is discontinuing theproduct line or fails to prove that there was good cause for the termination,cancellation, or nonrenewal or if the manufacturer fails to prove that themanufacturer acted in good faith, then the manufacturer shall pay the new motorvehicle dealer fair and reasonable compensation for the value of the dealershipas an ongoing business.
In addition to the other compensation described in paragraphs(iii) and (iv) above and in this section, the manufacturer shall also reimbursethe dealer for any costs incurred for facility upgrades or alterations requiredby the manufacturer within two (2) years of the effective date of thetermination.
(vi) If a manufacturer is discontinuing the product line andthus as a result a franchise for the sale of motor vehicles is subject totermination, cancellation, or nonrenewal, the manufacturer shall:
(A) Authorize the dealer at the dealer's option, that remainsa franchised dealer of the manufacturer regardless of the discontinuation of aproduct line, to continue servicing and supplying parts (without prejudice tothe right of the manufacturer to also authorize other franchised dealers toprovide service and parts for a discontinued produce line), including servicesand parts pursuant to a warranty issued by the manufacturer for any goods orservices marketed by the dealer pursuant to the motor vehicle franchise for aperiod of not less than five (5) years from the effective date of thetermination, cancellation, or nonrenewal;
(B) Continue to reimburse the dealer that remains afranchised dealer of the manufacturer regardless of the discontinuation of aproduct line or another franchised dealer of the manufacturer in the area forwarranty parts and service in an amount and on terms not less favorable thanthose in effect prior to the termination, cancellation, or nonrenewal;
(C) The manufacturer shall continue to supply the dealer thatremains a franchised dealer of the manufacturer regardless of thediscontinuation of a product line or another franchised dealer of themanufacturer in the area with replacement parts for any goods or servicesmarketed by the dealer pursuant to the franchise agreement for a period of notless than five (5) years from the effective date of the termination,cancellation, or nonrenewal, at a price and on terms not less favorable thanthose in effect prior to the termination, cancellation, or nonrenewal;
(vii) The requirements of this section do not apply to atermination, cancellation or nonrenewal due to the sale of the assets or stockof the motor vehicle dealer.
(D) To be entitled to facilities assistance from themanufacturer as described above, the dealer shall have the obligation tomitigate damages by listing the dealership facilities for lease or subleasewith a licensed real estate agent within thirty (30) days after the effectivedate of the termination of the franchise and thereafter be reasonablycooperating with such real estate agent in the performance of the agent'sduties and responsibilities. If the dealer is able to lease or sublease thedealership facilities on terms that are consistent with local zoningrequirements to preserve the right to sell motor vehicles from the dealershipfacilities and the terms of the dealer's lease, the dealer shall be obligatedto pay the manufacturer the net revenue received from such mitigation, but onlyfollowing receipt of facilities assistance payments pursuant to this chapter,and only up to the total amount of facilities assistance payments that thedealer has received.
(e) It shall be deemed a violation of this chapter for amotor vehicle dealer:
(1) To require a purchaser of a new motor vehicle, as acondition of the sale and delivery thereof, to also purchase special features,equipment, parts, or accessories not desired or requested by the purchaser.This prohibition shall not apply as to special features, equipment, parts, oraccessories which are already installed on the car before sale by the dealer.
(2) To represent and sell as a new motor vehicle any motorvehicle which is a used motor vehicle.
(3) To resort to or use any false or misleading advertisementin connection with his or her business as a motor vehicle dealer.
(4) To engage in any deception or fraudulent practice in therepair of motor vehicles.
§ 31-5.1-4 Violations. – (a) It shall be deemed a violation of this chapter for any manufacturer ormotor vehicle dealer to engage in any action which is arbitrary, in bad faith,or unconscionable and which causes damage to any of the parties involved or tothe public.
(b) It shall be deemed a violation of this chapter for amanufacturer, or officer, agent, or other representative of a manufacturer, tocoerce, or attempt to coerce, any motor vehicle dealer:
(1) To order or accept delivery of any motor vehicle orvehicles, equipment, parts, or accessories for them, or any other commodity orcommodities which the motor vehicle dealer has not voluntarily ordered.
(2) To order or accept delivery of any motor vehicle withspecial features, accessories, or equipment not included in the list price ofthat motor vehicle as publicly advertised by the manufacturer of the vehicle.
(3) To participate monetarily in an advertising campaign orcontest, or to purchase any promotional materials, or training materials,showroom or other display decorations or materials at the expense of the newmotor vehicle dealership.
(4) To enter into any agreement with the manufacturer or todo any other act prejudicial to the new motor vehicle dealer by threatening toterminate or cancel a franchise or any contractual agreement existing betweenthe dealer and the manufacturer; except that this subdivision is not intendedto preclude the manufacturer or distributor from insisting on compliance withthe reasonable terms or provisions of the franchise or other contractualagreement, and notice in good faith to any new motor vehicle dealer of the newmotor vehicle dealer's violation of those terms or provisions shall notconstitute a violation of the chapter.
(5) To refrain from participation in the management of,investment in, or acquisition of any other line of new motor vehicle or relatedproducts. This subdivision does not apply unless the new motor vehicle dealermaintains a reasonable line of credit for each make or line of new motorvehicle, the new motor vehicle dealer remains in compliance with any reasonablefacilities requirements of the manufacturer, and no change is made in theprincipal management of the new motor vehicle dealer.
(6) To assent to a release, assignment, novation, waiver, orestoppel in connection with the transfer or voluntary termination of afranchise, or which would relieve any person from the liability to be imposedby this law or to require any controversy between a new motor vehicle dealerand a manufacturer, distributor, or representative to be referred to any personother than the duly constituted courts of this state or of the United States ofAmerica, or to the department of revenue of this state, if that referral wouldbe binding upon the new motor vehicle dealer.
(7) To order for any person any parts, accessories,equipment, machinery, tools or any commodities.
(c) It shall be deemed a violation of this chapter for amanufacturer, or officer, agent, or other representative:
(1) To refuse to deliver in reasonable quantities and withina reasonable time after receipt of the dealer's order, to any motor vehicledealer having a franchise or contractual arrangement for the retail sale of newmotor vehicles sold or distributed by the manufacturer, any motor vehiclescovered by the franchise or contract, specifically publicly advertised by themanufacturer to be available for immediate delivery. However, the failure todeliver any motor vehicle shall not be considered a violation of this chapterif that failure is due to an act of God, work stoppage or delay due to a strikeor labor difficulty, shortage of materials, a freight embargo, or other causeover which the manufacturer, distributor, or wholesaler, or its agent, shallhave no control.
(2) To refuse to deliver or otherwise deny to any motorvehicle dealer having a franchise or contractual arrangement for the retailsale of new motor vehicles sold or distributed by the manufacturer anyparticular new motor vehicle model made or distributed by the manufacturerunder the name of the division of the manufacturer of which the dealer is anauthorized franchise.
(3) It shall be deemed a prima facie violation of thischapter for any automotive vehicle division manufacturer to require anyseparate franchise or contractual arrangement with any new motor vehicle dealeralready a party to a franchise or contractual arrangement with that automotivevehicle division for the retail sale of any particular new motor vehicle modelmade or distributed by that division.
(4) To coerce, or attempt to coerce, any motor vehicle dealerto enter into any agreement with the manufacturer, or their officers, agents,or other representatives, or to do any other act prejudicial to the dealer, bythreatening to cancel any franchise or any contractual agreement existingbetween the manufacturer and the dealer. Notice in good faith to any motorvehicle dealer of the dealer's violation of any terms or provisions of thefranchise or contractual agreement shall not constitute a violation of thischapter.
(5) To resort to or use any false or misleading advertisementin connection with his or her business as a manufacturer, an officer, agent, orother representative.
(6) To sell or lease any new motor vehicle to, or through,any new motor vehicle dealer at a lower actual price therefore than the actualprice offered to any other new motor vehicle dealer for the same model vehiclesimilarly equipped or to utilize any device, including, but not limited to,sales promotion plans or programs, which result in a lesser actual price. Theprovisions of this paragraph shall not apply to sales to a new motor vehicledealer for resale to any unit of the United States government, or to the stateor any of its political subdivisions. A manufacturer may not reduce the priceof a motor vehicle charged to a dealer or provide different financing terms toa dealer in exchange for the dealer's agreement to:
(i) Maintain an exclusive sales or service facility;
(ii) Build or alter a sales or service facility; or
(iii) Participate in a floor plan or other financing.
(7) To sell or lease any new motor vehicle to any person,except a manufacturer's employee, at a lower actual price than the actual priceoffered and charged to a new motor vehicle dealer for the same model vehiclesimilarly equipped or to utilize any device which results in a lesser actualprice. The provisions of this paragraph shall not apply to sales to a new motorvehicle dealer for resale to any unit of the United States government, or tothe state or any of its political subdivisions.
(8) To offer in connection with the sale of any new motorvehicle or vehicles directly or indirectly to a fleet purchaser within orwithout this state terms, discounts, refunds, or other similar types ofinducements to that purchaser without making the same offer or offers availableto all of its new motor vehicles dealers in this state. No manufacturer mayimpose or enforce any restrictions against new motor vehicle dealers in thisstate or their leasing, rental, or fleet divisions or subsidiaries that are notimposed or enforced against any other direct or indirect purchaser from themanufacturer. The provisions of this paragraph shall not apply to sales to anew motor vehicle dealer for resale to any unit of the United Statesgovernment, or to the state or any of its political subdivisions.
(9) To use or consider the performance of a motor vehicledealer relating to the sale of the manufacturer's vehicles or the motor vehicledealer's ability to satisfy any minimum sales or market share quota orresponsibility relating to the sale of the manufacturer's new vehicles indetermining:
(i) The motor vehicle dealer's eligibility to purchaseprogram, certified, or other used motor vehicles from the manufacturer;
(ii) The volume, type, or model of program, certified, orother used motor vehicles that a motor vehicle dealer is eligible to purchasefrom the manufacturer;
(iii) The price of any program, certified, or other usedmotor vehicle that the dealer is eligible to purchase from the manufacturer; or
(iv) The availability or amount of any discount, credit,rebate, or sales incentive that the dealer is eligible to receive from themanufacturer for the purchase of any program, certified, or other used motorvehicle offered for sale by the manufacturer.
(10) To offer to sell or to sell parts or accessories to anynew motor vehicle dealer for use in the dealer's own business for the purposeof repairing or replacing the same parts or accessories or a comparable part oraccessory, at a lower actual price than the actual price charged to any othernew motor vehicle dealer for similar parts or accessories to use in thedealer's own business. In those cases where new motor vehicle dealers operateor serve as wholesalers of parts and accessories to retail outlets, theseprovisions shall be construed to prevent a manufacturer, or their agents, fromselling to a new motor vehicle dealer who operates and services as a wholesalerof parts and accessories, any parts and accessories that may be ordered by thatnew motor vehicle dealer for resale to retail outlets, at a lower actual pricethan the actual price charged a new motor vehicle dealer who does not operateor serve as a wholesaler of parts and accessories.
(11) To prevent or attempt to prevent by contract orotherwise any new motor vehicle dealer from changing the capital structure ofhis or her dealership or the means by which or through which the dealerfinances the operation of his or her dealership. However, the new motor vehicledealer shall at all times meet any reasonable capital standards agreed tobetween the dealership and the manufacturer, provided that any change in thecapital structure by the new motor vehicle dealer does not result in a changein the executive management control of the dealership.
(12) To prevent or attempt to prevent by contract orotherwise any new motor vehicle dealer or any officer, partner, or stockholderof any new motor vehicle dealer from selling or transferring any part of theinterest of any of them to any other person or persons or party or parties.Provided, however, that no dealer, officer, partner, or stockholder shall havethe right to sell, transfer or assign the franchise or power of management orcontrol without the consent of the manufacturer, except that the consent shallnot be unreasonably withheld.
(13) To obtain money, goods, services, anything of value, orany other benefit from any other person with whom the new motor vehicle dealerdoes business, on account of or in relation to the transactions between thedealer and that other person, unless that benefit is promptly accounted for andtransmitted to the new motor vehicle dealer.
(14) To compete with a new motor vehicle dealer operatingunder an agreement or franchise from the manufacturer in the state of RhodeIsland, through the ownership, operation, or control of any new motor vehicledealers in this state or by participation in the ownership, operation, orcontrol of any new motor vehicle dealer in this state. A manufacturer shall notbe deemed to be competing when operating, controlling, or owning a dealershipeither temporarily for a reasonable period in any case not to exceed one year,which one year period may be extended for a one-time additional period of up tosix (6) months upon application to and approval by the motor vehicle dealerslicense and hearing board, which approval shall be subject to the manufacturerdemonstrating the need for this extension, and with other new motor vehicledealers of the same line making being given notice and an opportunity to beheard in connection with said application, or in a bona fide relationship inwhich an independent person had made a significant investment subject to lossin the dealership and can reasonably expect to acquire full ownership of thedealership on reasonable terms and conditions within a reasonable period oftime.
(15) To refuse to disclose to any new motor vehicle dealer,handling the same line or make, the manner and mode of distribution of thatline or make within the relevant market area.
(16) To increase prices of new motor vehicles which the newmotor vehicle dealer had ordered for private retail consumers prior to the newmotor vehicle dealer's receipt of the written official price increasenotification. A sales contract signed by a private retail consumer shallconstitute evidence of an order provided that the vehicle is in fact deliveredto that customer. In the event of manufacturer price reductions or cash rebatespaid to the new motor vehicle dealer, the amount of any reduction or rebatereceived by a new motor vehicle dealer shall be passed on to the private retailconsumer by the new motor vehicle dealer. Price reductions shall apply to allvehicles in the dealer's inventory which were subject to the price reduction.Price differences applicable to new model or series motor vehicles at the timeof the introduction of new models or series shall not be considered a priceincrease or price decrease. Price changes caused by either: (i) the addition toa motor vehicle of required or optional equipment; (ii) revaluation of theUnited States dollar, in the case of foreign-make vehicles or components; or(iii) an increase in transportation charges due to increased rates imposed bycommon carriers, shall not be subject to the provisions of this subdivision.
(17) To release to any outside party, except under subpoenaor as otherwise required by law or in an administrative, judicial, orarbitration proceeding involving the manufacturer or new motor vehicle dealer,any business, financial, or personal information which may be from time to timeprovided by the new motor vehicle dealer to the manufacturer, without theexpress written consent of the new motor vehicle dealer.
(18) To unfairly discriminate among its new motor vehicledealers with respect to warranty reimbursement, or any program that providesassistance to its dealers, including Internet listings; sales leads; warrantypolicy adjustments; marketing programs; and dealer recognition programs.
(19) To unreasonably withhold consent to the sale, transfer,or exchange of the franchise to a qualified buyer capable of being licensed asa new motor vehicle dealer in this state.
(20) To fail to respond in writing to a request for consentas specified in subdivision (19) of this subsection within sixty (60) days ofthe receipt of a written request on the forms, if any, generally utilized bythe manufacturer or distributor for those purposes and containing theinformation required therein. The failure to respond shall be deemed to be aconsent to the request. A manufacturer may not impose a condition on theapproval of a sale, transfer, or exchange of the franchise if the conditionwould violate the provisions of this chapter if imposed on an existing dealer.
(21) To unfairly prevent a new motor vehicle dealer fromreceiving fair and reasonable compensation for the value of the new motorvehicle dealership.
(22) To require that a new motor vehicle dealer execute awritten franchise agreement that does not contain substantially the sameprovisions as the franchise agreement being offered to other new motor vehicledealers handling the same line or make. In no instance shall the term of anyfranchise agreement be of a duration of less than three (3) years.
(23) To require that a new motor vehicle dealer provideexclusive facilities, personnel, or display space taking into considerationchanging market conditions, or that a dealer execute a site control agreementgiving a manufacturer control over the dealer's facilities.
(24) To require that a dealer expand facilities without aguarantee of a sufficient supply of new motor vehicles to justify thatexpansion or to require that a dealer expand facilities to a greater degreethan is necessary to sell and service the number of vehicles that the dealersold and serviced in the most recent calendar year.
(25) To prevent a dealer from adjusting his or her facilitiesto permit a relocation of office space, showroom space, and service facilitiesso long as the relocation is within five hundred (500) yards of the presentlocation.
(26) To engage in any predatory practice against a new motorvehicle dealer.
(d) It shall be a violation of this chapter for amanufacturer to terminate, cancel, or fail to renew the franchise of a newmotor vehicle dealer except as provided in this subsection:
(1) Notwithstanding the terms, provisions, or conditions ofany franchise, whether entered into before or after the enactment of thischapter or any of its provisions, or notwithstanding the terms or provisions ofany waiver, whether entered into before or after the enactment of this chapteror any of its provisions, no manufacturer shall cancel, terminate, or fail torenew any franchise with a licensed new motor vehicle dealer unless themanufacturer has:
(i) Satisfied the notice requirement of this subsection;
(ii) Has good cause for the cancellation, termination, ornonrenewal;
(iii) Has not committed any violations set forth insubsection (b) of this section; and
(iv) Has acted in good faith as defined in this chapter andhas complied with all provisions of this chapter.
(2) Notwithstanding the terms, provisions, or conditions ofany franchise or the terms or provisions of any waiver, good cause shall existfor the purposes of a termination, cancellation, or nonrenewal when:
(i) There is a failure by the new motor vehicle dealer tocomply with a provision of the franchise which provision is both reasonable andof material significance to the franchise relationship, provided that thedealer has been notified in writing of the failure within one hundred eighty(180) days after the manufacturer first acquired knowledge of that failure;
(ii) If the failure by the new motor vehicle dealer, asprovided in paragraph (i) of this subdivision, relates to the performance ofthe new motor vehicle dealer in sales or service, then good cause shall bedefined as the failure of the new motor vehicle dealer to comply withreasonable performance criteria established by the manufacturer if the newmotor vehicle dealer was apprised by the manufacturer in writing of thatfailure; and:
(A) The notification stated that notice was provided offailure of performance pursuant to paragraph (i) of this subdivision;
(B) The new motor vehicle dealer was afforded a reasonableopportunity, for a period of not less than six (6) months, to comply with thosecriteria; and
(C) The new motor vehicle dealer did not demonstratesubstantial progress towards compliance with the manufacturer's performancecriteria during that period.
(3) The manufacturer shall have the burden of proof forshowing that the notice requirements have been complied with, that there wasgood cause for the franchise termination, cancellation or nonrenewal, and thatthe manufacturer has acted in good faith.
(i) Notwithstanding the terms, provisions, or conditions ofany franchise, prior to the termination, cancellation, or nonrenewal of anyfranchise, the manufacturer shall furnish notification of the termination,cancellation, or nonrenewal to the new motor vehicle dealer as follows:
(A) In the manner described in paragraph (ii) of thissubdivision; and
(B) Not fewer than ninety (90) days prior to the effectivedate of the termination, cancellation, or nonrenewal; or
(C) Not fewer than fifteen (15) days prior to the effectivedate of the termination, cancellation, or nonrenewal for any of the followingreasons:
(I) Insolvency of the new motor vehicle dealer, or the filingof any petition by or against the new motor vehicle dealer under any bankruptcyor receivership law;
(II) Failure of the new motor vehicle dealer to conduct hiscustomary sales and service operations during his or her customary businesshours for seven (7) consecutive business days;
(III) Final conviction of the new motor vehicle dealer, orany owner or operator of the dealership, of a crime which is associated with orrelated to the operation of the dealership;
(IV) Revocation of any license which the new motor vehicledealer is required to have to operate a dealership; or
(D) Not fewer than one hundred eighty (180) days prior to theeffective date of the termination or cancellation where the manufacturer ordistributor is discontinuing the sale of the product line.
(ii) Notification under this subsection shall be in writing,shall be by certified mail or personally delivered to the new motor vehicledealer, and shall contain:
(A) A statement of intention to terminate, cancel, or not torenew the franchise;
(B) A statement of the reasons for the termination,cancellation, or nonrenewal; and
(C) The date on which the termination, cancellation, ornonrenewal shall take effect.
(iii) Upon the involuntary or voluntary termination,nonrenewal, or cancellation of any franchise, by either the manufacturer or thenew motor vehicle dealer, notwithstanding the terms of any franchise whetherentered into before or after the enactment of this chapter or any of itsprovisions, the new motor vehicle dealer shall be allowed fair and reasonablecompensation by the manufacturer for the following:
(A) The new motor vehicle dealer's cost, less allowances paidby the manufacturer, of each new, undamaged, unsold and unaltered, except fordealer installed manufacturer-authorized accessories, motor vehicle, regardlessof model year purchased from the manufacturer or another dealer of the sameline-make in the ordinary course of business within twenty-four (24) months oftermination, having five hundred (500) or fewer miles recorded on the odometerthat is in the new motor vehicle dealer's inventory at the time of termination,nonrenewal, or cancellation.
(B) The new motor vehicle dealer's cost of each new, unused,undamaged, and unsold part or accessory that is in the current parts catalogueor is identical to a part or accessory in the current parts catalogue exceptfor the number assigned to the part or accessory due to a change in the numberafter the purchase of the part or accessory, and that is still in the original,resalable merchandising package and in an unbroken lot, except that, in thecase of sheet metal, a comparable substitute for the original package may beused.
(C) The fair market value of each undamaged sign, normal wearand tear excepted, owned by the dealer that bears a trademark or trade nameused or claimed by the manufacturer that were purchased as a requirement of themanufacturer.
(D) The fair market value of all special tools, andautomotive services equipment owned by the dealer that: (I) Were recommended inwriting and designated as special tools and equipment; (II) Were purchased as arequirement of the manufacturer; and (III) Are in usable and good conditionexcept for reasonable wear and tear.
(E) The cost of transporting, handling, packing, storing, andloading any property that is subject to repurchase under this section.
(F) The payments above are due within sixty (60) days fromthe date the dealer submits an accounting to the manufacturer of the vehicleinventory subject to repurchase, and for other items within sixty (60) daysfrom the date the dealer submits an accounting of the other items subject torepurchase, provided, the new motor vehicle dealer has clear title (or willhave clear title upon using the repurchase funds to obtain clear title) to theinventory and other items and is in a position to convey that title to themanufacturer. If the inventory or other items are subject to a securityinterest, the manufacturer, wholesaler, or franchisor may make payment jointlyto the dealer and the holder of the security interest. In no event shall thepayments be made later than ninety (90) days of the effective date of thetermination, cancellation, or nonrenewal.
(iv) In the event the termination, cancellation or nonrenewalis involuntary and not pursuant to subsection (3)(i)(C) of this section, and:
(A) The new motor vehicle dealer is leasing the dealershipfacilities from a lessor other than the manufacturer, the manufacturer shallpay the new motor vehicle dealer a sum equivalent to the rent for the unexpiredterm of the lease or (2) two year's rent, whichever is less; or
(B) If the new motor vehicle dealer owns the facilities, themanufacturer shall pay the new motor vehicle dealer a sum equivalent to thereasonable rental value of the facilities for two (2) years; if:
(I) The new motor vehicle dealer is unable to reasonablyutilize the facilities for another purpose;
(II) The new motor vehicle dealer, or the manufacturer actingas its agent, is unable to make arrangements for the cancellation or assumptionof its lease obligations by another party in the case of leased facilities, oris unable to sell dealer owned facilities, and
(III) Only to the extent those facilities were required as acondition of the franchise and used to conduct sales and service operationsrelated to the franchise product.
(v) In addition to any injunctive relief and any otherdamages allowable by this chapter, if the manufacturer is discontinuing theproduct line or fails to prove that there was good cause for the termination,cancellation, or nonrenewal or if the manufacturer fails to prove that themanufacturer acted in good faith, then the manufacturer shall pay the new motorvehicle dealer fair and reasonable compensation for the value of the dealershipas an ongoing business.
In addition to the other compensation described in paragraphs(iii) and (iv) above and in this section, the manufacturer shall also reimbursethe dealer for any costs incurred for facility upgrades or alterations requiredby the manufacturer within two (2) years of the effective date of thetermination.
(vi) If a manufacturer is discontinuing the product line andthus as a result a franchise for the sale of motor vehicles is subject totermination, cancellation, or nonrenewal, the manufacturer shall:
(A) Authorize the dealer at the dealer's option, that remainsa franchised dealer of the manufacturer regardless of the discontinuation of aproduct line, to continue servicing and supplying parts (without prejudice tothe right of the manufacturer to also authorize other franchised dealers toprovide service and parts for a discontinued produce line), including servicesand parts pursuant to a warranty issued by the manufacturer for any goods orservices marketed by the dealer pursuant to the motor vehicle franchise for aperiod of not less than five (5) years from the effective date of thetermination, cancellation, or nonrenewal;
(B) Continue to reimburse the dealer that remains afranchised dealer of the manufacturer regardless of the discontinuation of aproduct line or another franchised dealer of the manufacturer in the area forwarranty parts and service in an amount and on terms not less favorable thanthose in effect prior to the termination, cancellation, or nonrenewal;
(C) The manufacturer shall continue to supply the dealer thatremains a franchised dealer of the manufacturer regardless of thediscontinuation of a product line or another franchised dealer of themanufacturer in the area with replacement parts for any goods or servicesmarketed by the dealer pursuant to the franchise agreement for a period of notless than five (5) years from the effective date of the termination,cancellation, or nonrenewal, at a price and on terms not less favorable thanthose in effect prior to the termination, cancellation, or nonrenewal;
(vii) The requirements of this section do not apply to atermination, cancellation or nonrenewal due to the sale of the assets or stockof the motor vehicle dealer.
(D) To be entitled to facilities assistance from themanufacturer as described above, the dealer shall have the obligation tomitigate damages by listing the dealership facilities for lease or subleasewith a licensed real estate agent within thirty (30) days after the effectivedate of the termination of the franchise and thereafter be reasonablycooperating with such real estate agent in the performance of the agent'sduties and responsibilities. If the dealer is able to lease or sublease thedealership facilities on terms that are consistent with local zoningrequirements to preserve the right to sell motor vehicles from the dealershipfacilities and the terms of the dealer's lease, the dealer shall be obligatedto pay the manufacturer the net revenue received from such mitigation, but onlyfollowing receipt of facilities assistance payments pursuant to this chapter,and only up to the total amount of facilities assistance payments that thedealer has received.
(e) It shall be deemed a violation of this chapter for amotor vehicle dealer:
(1) To require a purchaser of a new motor vehicle, as acondition of the sale and delivery thereof, to also purchase special features,equipment, parts, or accessories not desired or requested by the purchaser.This prohibition shall not apply as to special features, equipment, parts, oraccessories which are already installed on the car before sale by the dealer.
(2) To represent and sell as a new motor vehicle any motorvehicle which is a used motor vehicle.
(3) To resort to or use any false or misleading advertisementin connection with his or her business as a motor vehicle dealer.
(4) To engage in any deception or fraudulent practice in therepair of motor vehicles.
§ 31-5.1-4 Violations. – (a) It shall be deemed a violation of this chapter for any manufacturer ormotor vehicle dealer to engage in any action which is arbitrary, in bad faith,or unconscionable and which causes damage to any of the parties involved or tothe public.
(b) It shall be deemed a violation of this chapter for amanufacturer, or officer, agent, or other representative of a manufacturer, tocoerce, or attempt to coerce, any motor vehicle dealer:
(1) To order or accept delivery of any motor vehicle orvehicles, equipment, parts, or accessories for them, or any other commodity orcommodities which the motor vehicle dealer has not voluntarily ordered.
(2) To order or accept delivery of any motor vehicle withspecial features, accessories, or equipment not included in the list price ofthat motor vehicle as publicly advertised by the manufacturer of the vehicle.
(3) To participate monetarily in an advertising campaign orcontest, or to purchase any promotional materials, or training materials,showroom or other display decorations or materials at the expense of the newmotor vehicle dealership.
(4) To enter into any agreement with the manufacturer or todo any other act prejudicial to the new motor vehicle dealer by threatening toterminate or cancel a franchise or any contractual agreement existing betweenthe dealer and the manufacturer; except that this subdivision is not intendedto preclude the manufacturer or distributor from insisting on compliance withthe reasonable terms or provisions of the franchise or other contractualagreement, and notice in good faith to any new motor vehicle dealer of the newmotor vehicle dealer's violation of those terms or provisions shall notconstitute a violation of the chapter.
(5) To refrain from participation in the management of,investment in, or acquisition of any other line of new motor vehicle or relatedproducts. This subdivision does not apply unless the new motor vehicle dealermaintains a reasonable line of credit for each make or line of new motorvehicle, the new motor vehicle dealer remains in compliance with any reasonablefacilities requirements of the manufacturer, and no change is made in theprincipal management of the new motor vehicle dealer.
(6) To assent to a release, assignment, novation, waiver, orestoppel in connection with the transfer or voluntary termination of afranchise, or which would relieve any person from the liability to be imposedby this law or to require any controversy between a new motor vehicle dealerand a manufacturer, distributor, or representative to be referred to any personother than the duly constituted courts of this state or of the United States ofAmerica, or to the department of revenue of this state, if that referral wouldbe binding upon the new motor vehicle dealer.
(7) To order for any person any parts, accessories,equipment, machinery, tools or any commodities.
(c) It shall be deemed a violation of this chapter for amanufacturer, or officer, agent, or other representative:
(1) To refuse to deliver in reasonable quantities and withina reasonable time after receipt of the dealer's order, to any motor vehicledealer having a franchise or contractual arrangement for the retail sale of newmotor vehicles sold or distributed by the manufacturer, any motor vehiclescovered by the franchise or contract, specifically publicly advertised by themanufacturer to be available for immediate delivery. However, the failure todeliver any motor vehicle shall not be considered a violation of this chapterif that failure is due to an act of God, work stoppage or delay due to a strikeor labor difficulty, shortage of materials, a freight embargo, or other causeover which the manufacturer, distributor, or wholesaler, or its agent, shallhave no control.
(2) To refuse to deliver or otherwise deny to any motorvehicle dealer having a franchise or contractual arrangement for the retailsale of new motor vehicles sold or distributed by the manufacturer anyparticular new motor vehicle model made or distributed by the manufacturerunder the name of the division of the manufacturer of which the dealer is anauthorized franchise.
(3) It shall be deemed a prima facie violation of thischapter for any automotive vehicle division manufacturer to require anyseparate franchise or contractual arrangement with any new motor vehicle dealeralready a party to a franchise or contractual arrangement with that automotivevehicle division for the retail sale of any particular new motor vehicle modelmade or distributed by that division.
(4) To coerce, or attempt to coerce, any motor vehicle dealerto enter into any agreement with the manufacturer, or their officers, agents,or other representatives, or to do any other act prejudicial to the dealer, bythreatening to cancel any franchise or any contractual agreement existingbetween the manufacturer and the dealer. Notice in good faith to any motorvehicle dealer of the dealer's violation of any terms or provisions of thefranchise or contractual agreement shall not constitute a violation of thischapter.
(5) To resort to or use any false or misleading advertisementin connection with his or her business as a manufacturer, an officer, agent, orother representative.
(6) To sell or lease any new motor vehicle to, or through,any new motor vehicle dealer at a lower actual price therefore than the actualprice offered to any other new motor vehicle dealer for the same model vehiclesimilarly equipped or to utilize any device, including, but not limited to,sales promotion plans or programs, which result in a lesser actual price. Theprovisions of this paragraph shall not apply to sales to a new motor vehicledealer for resale to any unit of the United States government, or to the stateor any of its political subdivisions. A manufacturer may not reduce the priceof a motor vehicle charged to a dealer or provide different financing terms toa dealer in exchange for the dealer's agreement to:
(i) Maintain an exclusive sales or service facility;
(ii) Build or alter a sales or service facility; or
(iii) Participate in a floor plan or other financing.
(7) To sell or lease any new motor vehicle to any person,except a manufacturer's employee, at a lower actual price than the actual priceoffered and charged to a new motor vehicle dealer for the same model vehiclesimilarly equipped or to utilize any device which results in a lesser actualprice. The provisions of this paragraph shall not apply to sales to a new motorvehicle dealer for resale to any unit of the United States government, or tothe state or any of its political subdivisions.
(8) To offer in connection with the sale of any new motorvehicle or vehicles directly or indirectly to a fleet purchaser within orwithout this state terms, discounts, refunds, or other similar types ofinducements to that purchaser without making the same offer or offers availableto all of its new motor vehicles dealers in this state. No manufacturer mayimpose or enforce any restrictions against new motor vehicle dealers in thisstate or their leasing, rental, or fleet divisions or subsidiaries that are notimposed or enforced against any other direct or indirect purchaser from themanufacturer. The provisions of this paragraph shall not apply to sales to anew motor vehicle dealer for resale to any unit of the United Statesgovernment, or to the state or any of its political subdivisions.
(9) To use or consider the performance of a motor vehicledealer relating to the sale of the manufacturer's vehicles or the motor vehicledealer's ability to satisfy any minimum sales or market share quota orresponsibility relating to the sale of the manufacturer's new vehicles indetermining:
(i) The motor vehicle dealer's eligibility to purchaseprogram, certified, or other used motor vehicles from the manufacturer;
(ii) The volume, type, or model of program, certified, orother used motor vehicles that a motor vehicle dealer is eligible to purchasefrom the manufacturer;
(iii) The price of any program, certified, or other usedmotor vehicle that the dealer is eligible to purchase from the manufacturer; or
(iv) The availability or amount of any discount, credit,rebate, or sales incentive that the dealer is eligible to receive from themanufacturer for the purchase of any program, certified, or other used motorvehicle offered for sale by the manufacturer.
(10) To offer to sell or to sell parts or accessories to anynew motor vehicle dealer for use in the dealer's own business for the purposeof repairing or replacing the same parts or accessories or a comparable part oraccessory, at a lower actual price than the actual price charged to any othernew motor vehicle dealer for similar parts or accessories to use in thedealer's own business. In those cases where new motor vehicle dealers operateor serve as wholesalers of parts and accessories to retail outlets, theseprovisions shall be construed to prevent a manufacturer, or their agents, fromselling to a new motor vehicle dealer who operates and services as a wholesalerof parts and accessories, any parts and accessories that may be ordered by thatnew motor vehicle dealer for resale to retail outlets, at a lower actual pricethan the actual price charged a new motor vehicle dealer who does not operateor serve as a wholesaler of parts and accessories.
(11) To prevent or attempt to prevent by contract orotherwise any new motor vehicle dealer from changing the capital structure ofhis or her dealership or the means by which or through which the dealerfinances the operation of his or her dealership. However, the new motor vehicledealer shall at all times meet any reasonable capital standards agreed tobetween the dealership and the manufacturer, provided that any change in thecapital structure by the new motor vehicle dealer does not result in a changein the executive management control of the dealership.
(12) To prevent or attempt to prevent by contract orotherwise any new motor vehicle dealer or any officer, partner, or stockholderof any new motor vehicle dealer from selling or transferring any part of theinterest of any of them to any other person or persons or party or parties.Provided, however, that no dealer, officer, partner, or stockholder shall havethe right to sell, transfer or assign the franchise or power of management orcontrol without the consent of the manufacturer, except that the consent shallnot be unreasonably withheld.
(13) To obtain money, goods, services, anything of value, orany other benefit from any other person with whom the new motor vehicle dealerdoes business, on account of or in relation to the transactions between thedealer and that other person, unless that benefit is promptly accounted for andtransmitted to the new motor vehicle dealer.
(14) To compete with a new motor vehicle dealer operatingunder an agreement or franchise from the manufacturer in the state of RhodeIsland, through the ownership, operation, or control of any new motor vehicledealers in this state or by participation in the ownership, operation, orcontrol of any new motor vehicle dealer in this state. A manufacturer shall notbe deemed to be competing when operating, controlling, or owning a dealershipeither temporarily for a reasonable period in any case not to exceed one year,which one year period may be extended for a one-time additional period of up tosix (6) months upon application to and approval by the motor vehicle dealerslicense and hearing board, which approval shall be subject to the manufacturerdemonstrating the need for this extension, and with other new motor vehicledealers of the same line making being given notice and an opportunity to beheard in connection with said application, or in a bona fide relationship inwhich an independent person had made a significant investment subject to lossin the dealership and can reasonably expect to acquire full ownership of thedealership on reasonable terms and conditions within a reasonable period oftime.
(15) To refuse to disclose to any new motor vehicle dealer,handling the same line or make, the manner and mode of distribution of thatline or make within the relevant market area.
(16) To increase prices of new motor vehicles which the newmotor vehicle dealer had ordered for private retail consumers prior to the newmotor vehicle dealer's receipt of the written official price increasenotification. A sales contract signed by a private retail consumer shallconstitute evidence of an order provided that the vehicle is in fact deliveredto that customer. In the event of manufacturer price reductions or cash rebatespaid to the new motor vehicle dealer, the amount of any reduction or rebatereceived by a new motor vehicle dealer shall be passed on to the private retailconsumer by the new motor vehicle dealer. Price reductions shall apply to allvehicles in the dealer's inventory which were subject to the price reduction.Price differences applicable to new model or series motor vehicles at the timeof the introduction of new models or series shall not be considered a priceincrease or price decrease. Price changes caused by either: (i) the addition toa motor vehicle of required or optional equipment; (ii) revaluation of theUnited States dollar, in the case of foreign-make vehicles or components; or(iii) an increase in transportation charges due to increased rates imposed bycommon carriers, shall not be subject to the provisions of this subdivision.
(17) To release to any outside party, except under subpoenaor as otherwise required by law or in an administrative, judicial, orarbitration proceeding involving the manufacturer or new motor vehicle dealer,any business, financial, or personal information which may be from time to timeprovided by the new motor vehicle dealer to the manufacturer, without theexpress written consent of the new motor vehicle dealer.
(18) To unfairly discriminate among its new motor vehicledealers with respect to warranty reimbursement, or any program that providesassistance to its dealers, including Internet listings; sales leads; warrantypolicy adjustments; marketing programs; and dealer recognition programs.
(19) To unreasonably withhold consent to the sale, transfer,or exchange of the franchise to a qualified buyer capable of being licensed asa new motor vehicle dealer in this state.
(20) To fail to respond in writing to a request for consentas specified in subdivision (19) of this subsection within sixty (60) days ofthe receipt of a written request on the forms, if any, generally utilized bythe manufacturer or distributor for those purposes and containing theinformation required therein. The failure to respond shall be deemed to be aconsent to the request. A manufacturer may not impose a condition on theapproval of a sale, transfer, or exchange of the franchise if the conditionwould violate the provisions of this chapter if imposed on an existing dealer.
(21) To unfairly prevent a new motor vehicle dealer fromreceiving fair and reasonable compensation for the value of the new motorvehicle dealership.
(22) To require that a new motor vehicle dealer execute awritten franchise agreement that does not contain substantially the sameprovisions as the franchise agreement being offered to other new motor vehicledealers handling the same line or make. In no instance shall the term of anyfranchise agreement be of a duration of less than three (3) years.
(23) To require that a new motor vehicle dealer provideexclusive facilities, personnel, or display space taking into considerationchanging market conditions, or that a dealer execute a site control agreementgiving a manufacturer control over the dealer's facilities.
(24) To require that a dealer expand facilities without aguarantee of a sufficient supply of new motor vehicles to justify thatexpansion or to require that a dealer expand facilities to a greater degreethan is necessary to sell and service the number of vehicles that the dealersold and serviced in the most recent calendar year.
(25) To prevent a dealer from adjusting his or her facilitiesto permit a relocation of office space, showroom space, and service facilitiesso long as the relocation is within five hundred (500) yards of the presentlocation.
(26) To engage in any predatory practice against a new motorvehicle dealer.
(d) It shall be a violation of this chapter for amanufacturer to terminate, cancel, or fail to renew the franchise of a newmotor vehicle dealer except as provided in this subsection:
(1) Notwithstanding the terms, provisions, or conditions ofany franchise, whether entered into before or after the enactment of thischapter or any of its provisions, or notwithstanding the terms or provisions ofany waiver, whether entered into before or after the enactment of this chapteror any of its provisions, no manufacturer shall cancel, terminate, or fail torenew any franchise with a licensed new motor vehicle dealer unless themanufacturer has:
(i) Satisfied the notice requirement of this subsection;
(ii) Has good cause for the cancellation, termination, ornonrenewal;
(iii) Has not committed any violations set forth insubsection (b) of this section; and
(iv) Has acted in good faith as defined in this chapter andhas complied with all provisions of this chapter.
(2) Notwithstanding the terms, provisions, or conditions ofany franchise or the terms or provisions of any waiver, good cause shall existfor the purposes of a termination, cancellation, or nonrenewal when:
(i) There is a failure by the new motor vehicle dealer tocomply with a provision of the franchise which provision is both reasonable andof material significance to the franchise relationship, provided that thedealer has been notified in writing of the failure within one hundred eighty(180) days after the manufacturer first acquired knowledge of that failure;
(ii) If the failure by the new motor vehicle dealer, asprovided in paragraph (i) of this subdivision, relates to the performance ofthe new motor vehicle dealer in sales or service, then good cause shall bedefined as the failure of the new motor vehicle dealer to comply withreasonable performance criteria established by the manufacturer if the newmotor vehicle dealer was apprised by the manufacturer in writing of thatfailure; and:
(A) The notification stated that notice was provided offailure of performance pursuant to paragraph (i) of this subdivision;
(B) The new motor vehicle dealer was afforded a reasonableopportunity, for a period of not less than six (6) months, to comply with thosecriteria; and
(C) The new motor vehicle dealer did not demonstratesubstantial progress towards compliance with the manufacturer's performancecriteria during that period.
(3) The manufacturer shall have the burden of proof forshowing that the notice requirements have been complied with, that there wasgood cause for the franchise termination, cancellation or nonrenewal, and thatthe manufacturer has acted in good faith.
(i) Notwithstanding the terms, provisions, or conditions ofany franchise, prior to the termination, cancellation, or nonrenewal of anyfranchise, the manufacturer shall furnish notification of the termination,cancellation, or nonrenewal to the new motor vehicle dealer as follows:
(A) In the manner described in paragraph (ii) of thissubdivision; and
(B) Not fewer than ninety (90) days prior to the effectivedate of the termination, cancellation, or nonrenewal; or
(C) Not fewer than fifteen (15) days prior to the effectivedate of the termination, cancellation, or nonrenewal for any of the followingreasons:
(I) Insolvency of the new motor vehicle dealer, or the filingof any petition by or against the new motor vehicle dealer under any bankruptcyor receivership law;
(II) Failure of the new motor vehicle dealer to conduct hiscustomary sales and service operations during his or her customary businesshours for seven (7) consecutive business days;
(III) Final conviction of the new motor vehicle dealer, orany owner or operator of the dealership, of a crime which is associated with orrelated to the operation of the dealership;
(IV) Revocation of any license which the new motor vehicledealer is required to have to operate a dealership; or
(D) Not fewer than one hundred eighty (180) days prior to theeffective date of the termination or cancellation where the manufacturer ordistributor is discontinuing the sale of the product line.
(ii) Notification under this subsection shall be in writing,shall be by certified mail or personally delivered to the new motor vehicledealer, and shall contain:
(A) A statement of intention to terminate, cancel, or not torenew the franchise;
(B) A statement of the reasons for the termination,cancellation, or nonrenewal; and
(C) The date on which the termination, cancellation, ornonrenewal shall take effect.
(iii) Upon the involuntary or voluntary termination,nonrenewal, or cancellation of any franchise, by either the manufacturer or thenew motor vehicle dealer, notwithstanding the terms of any franchise whetherentered into before or after the enactment of this chapter or any of itsprovisions, the new motor vehicle dealer shall be allowed fair and reasonablecompensation by the manufacturer for the following:
(A) The new motor vehicle dealer's cost, less allowances paidby the manufacturer, of each new, undamaged, unsold and unaltered, except fordealer installed manufacturer-authorized accessories, motor vehicle, regardlessof model year purchased from the manufacturer or another dealer of the sameline-make in the ordinary course of business within twenty-four (24) months oftermination, having five hundred (500) or fewer miles recorded on the odometerthat is in the new motor vehicle dealer's inventory at the time of termination,nonrenewal, or cancellation.
(B) The new motor vehicle dealer's cost of each new, unused,undamaged, and unsold part or accessory that is in the current parts catalogueor is identical to a part or accessory in the current parts catalogue exceptfor the number assigned to the part or accessory due to a change in the numberafter the purchase of the part or accessory, and that is still in the original,resalable merchandising package and in an unbroken lot, except that, in thecase of sheet metal, a comparable substitute for the original package may beused.
(C) The fair market value of each undamaged sign, normal wearand tear excepted, owned by the dealer that bears a trademark or trade nameused or claimed by the manufacturer that were purchased as a requirement of themanufacturer.
(D) The fair market value of all special tools, andautomotive services equipment owned by the dealer that: (I) Were recommended inwriting and designated as special tools and equipment; (II) Were purchased as arequirement of the manufacturer; and (III) Are in usable and good conditionexcept for reasonable wear and tear.
(E) The cost of transporting, handling, packing, storing, andloading any property that is subject to repurchase under this section.
(F) The payments above are due within sixty (60) days fromthe date the dealer submits an accounting to the manufacturer of the vehicleinventory subject to repurchase, and for other items within sixty (60) daysfrom the date the dealer submits an accounting of the other items subject torepurchase, provided, the new motor vehicle dealer has clear title (or willhave clear title upon using the repurchase funds to obtain clear title) to theinventory and other items and is in a position to convey that title to themanufacturer. If the inventory or other items are subject to a securityinterest, the manufacturer, wholesaler, or franchisor may make payment jointlyto the dealer and the holder of the security interest. In no event shall thepayments be made later than ninety (90) days of the effective date of thetermination, cancellation, or nonrenewal.
(iv) In the event the termination, cancellation or nonrenewalis involuntary and not pursuant to subsection (3)(i)(C) of this section, and:
(A) The new motor vehicle dealer is leasing the dealershipfacilities from a lessor other than the manufacturer, the manufacturer shallpay the new motor vehicle dealer a sum equivalent to the rent for the unexpiredterm of the lease or (2) two year's rent, whichever is less; or
(B) If the new motor vehicle dealer owns the facilities, themanufacturer shall pay the new motor vehicle dealer a sum equivalent to thereasonable rental value of the facilities for two (2) years; if:
(I) The new motor vehicle dealer is unable to reasonablyutilize the facilities for another purpose;
(II) The new motor vehicle dealer, or the manufacturer actingas its agent, is unable to make arrangements for the cancellation or assumptionof its lease obligations by another party in the case of leased facilities, oris unable to sell dealer owned facilities, and
(III) Only to the extent those facilities were required as acondition of the franchise and used to conduct sales and service operationsrelated to the franchise product.
(v) In addition to any injunctive relief and any otherdamages allowable by this chapter, if the manufacturer is discontinuing theproduct line or fails to prove that there was good cause for the termination,cancellation, or nonrenewal or if the manufacturer fails to prove that themanufacturer acted in good faith, then the manufacturer shall pay the new motorvehicle dealer fair and reasonable compensation for the value of the dealershipas an ongoing business.
In addition to the other compensation described in paragraphs(iii) and (iv) above and in this section, the manufacturer shall also reimbursethe dealer for any costs incurred for facility upgrades or alterations requiredby the manufacturer within two (2) years of the effective date of thetermination.
(vi) If a manufacturer is discontinuing the product line andthus as a result a franchise for the sale of motor vehicles is subject totermination, cancellation, or nonrenewal, the manufacturer shall:
(A) Authorize the dealer at the dealer's option, that remainsa franchised dealer of the manufacturer regardless of the discontinuation of aproduct line, to continue servicing and supplying parts (without prejudice tothe right of the manufacturer to also authorize other franchised dealers toprovide service and parts for a discontinued produce line), including servicesand parts pursuant to a warranty issued by the manufacturer for any goods orservices marketed by the dealer pursuant to the motor vehicle franchise for aperiod of not less than five (5) years from the effective date of thetermination, cancellation, or nonrenewal;
(B) Continue to reimburse the dealer that remains afranchised dealer of the manufacturer regardless of the discontinuation of aproduct line or another franchised dealer of the manufacturer in the area forwarranty parts and service in an amount and on terms not less favorable thanthose in effect prior to the termination, cancellation, or nonrenewal;
(C) The manufacturer shall continue to supply the dealer thatremains a franchised dealer of the manufacturer regardless of thediscontinuation of a product line or another franchised dealer of themanufacturer in the area with replacement parts for any goods or servicesmarketed by the dealer pursuant to the franchise agreement for a period of notless than five (5) years from the effective date of the termination,cancellation, or nonrenewal, at a price and on terms not less favorable thanthose in effect prior to the termination, cancellation, or nonrenewal;
(vii) The requirements of this section do not apply to atermination, cancellation or nonrenewal due to the sale of the assets or stockof the motor vehicle dealer.
(D) To be entitled to facilities assistance from themanufacturer as described above, the dealer shall have the obligation tomitigate damages by listing the dealership facilities for lease or subleasewith a licensed real estate agent within thirty (30) days after the effectivedate of the termination of the franchise and thereafter be reasonablycooperating with such real estate agent in the performance of the agent'sduties and responsibilities. If the dealer is able to lease or sublease thedealership facilities on terms that are consistent with local zoningrequirements to preserve the right to sell motor vehicles from the dealershipfacilities and the terms of the dealer's lease, the dealer shall be obligatedto pay the manufacturer the net revenue received from such mitigation, but onlyfollowing receipt of facilities assistance payments pursuant to this chapter,and only up to the total amount of facilities assistance payments that thedealer has received.
(e) It shall be deemed a violation of this chapter for amotor vehicle dealer:
(1) To require a purchaser of a new motor vehicle, as acondition of the sale and delivery thereof, to also purchase special features,equipment, parts, or accessories not desired or requested by the purchaser.This prohibition shall not apply as to special features, equipment, parts, oraccessories which are already installed on the car before sale by the dealer.
(2) To represent and sell as a new motor vehicle any motorvehicle which is a used motor vehicle.
(3) To resort to or use any false or misleading advertisementin connection with his or her business as a motor vehicle dealer.
(4) To engage in any deception or fraudulent practice in therepair of motor vehicles.
