A. Each trailer manufacturer, factory branch, distributor, or distributorbranch shall (i) specify in writing to each of its trailer dealers licensedin the Commonwealth the dealer's obligations for preparation, delivery, andwarranty service on its products and (ii) compensate the dealer for warrantyparts, service and diagnostic work required of the dealer by the manufactureror distributor as follows:
1. Compensation of a dealer for warranty parts, service and diagnostic workshall not be less than the amounts charged by the dealer for themanufacturer's or distributor's original parts, service and diagnostic workto retail customers for nonwarranty service, parts and diagnostic workinstalled or performed in the dealer's service department unless the amountsare not reasonable;
2. For purposes of determining warranty parts and service compensation,menu-priced parts or services, group discounts, special event discounts, andspecial event promotions shall not be considered in determining amountscharged by the dealer to retail customers;
3. Increases in dealer warranty parts and service compensation and diagnosticwork compensation, pursuant to this section, shall be requested by the dealerin writing, shall be based on 100 consecutive repair orders or all repairorders over a ninety-day period, whichever occurs first and, in the case ofparts, shall be stated as a percentage of markup which shall be uniformlyapplied to all the manufacturer's or distributor's parts;
4. In the case of warranty parts compensation, the provisions of thissubsection shall be effective only for model year 1992 and succeeding modelyears;
5. If a manufacturer or distributor furnishes a part to a dealer at no costfor use by the dealer in performing work for which the manufacturer ordistributor is required to compensate the dealer under this section, themanufacturer or distributor shall compensate the dealer for the part in thesame manner as warranty parts compensation, less the wholesale costs, forsuch part as listed in the manufacturer's current price schedules; or
6. In the case of service work, manufacturer original parts or partsotherwise specified by the manufacturer or distributor, and parts provided bya dealer either pursuant to an adjustment program as defined in § 59.1-207.34or as otherwise requested by the manufacturer or distributor, the dealershall be compensated in the same manner as for warranty service or parts.
This section does not apply to compensation for parts such as components,systems, fixtures, appliances, furnishings, accessories, and features thatare designed, used, and maintained primarily for nonvehicular, residentialpurposes. Warranty audits of dealer records may be conducted by themanufacturer, factory branch, distributor, or distributor branch on areasonable basis, and dealer claims for warranty compensation shall not bedenied except for good cause, such as performance of nonwarranty repairs,lack of material documentation, fraud, or misrepresentation. Claims fordealer compensation shall be paid within thirty days of dealer submission orwithin thirty days of the end of an incentive program or rejected in writingfor stated reasons. The manufacturer, factory branch, distributor, ordistributor branch shall reserve the right to reasonable periodic audits todetermine the validity of all such paid claims for dealer compensation. Anychargebacks for warranty parts or service compensation and service incentivesshall only be for the twelve-month period immediately following the date ofthe claim and, in the case of chargebacks for sales compensation only, forthe eighteen-month period immediately following the date of claim. However,such limitations shall not be effective in the case of intentionally false orfraudulent claims.
B. It shall be unlawful for any trailer manufacturer, factory branch,distributor, or distributor branch to:
1. Fail to perform any of its warranty obligations, including tires, withrespect to a trailer;
2. Fail to assume all responsibility for any liability resulting fromstructural or production defects;
3. Fail to include in written notices of factory recalls to trailer ownersand dealers the expected date by which necessary parts and equipment will beavailable to dealers for the correction of defects;
4. Fail to compensate any of the trailer dealers licensed in the Commonwealthfor repairs effected by the dealer of merchandise damaged in manufacture ortransit to the dealer where the carrier is designated by the manufacturer,factory branch, distributor, or distributor branch;
5. Fail to compensate its trailer dealers licensed in the Commonwealth forwarranty parts, work, and service pursuant to subsection A of this section,or for legal costs and expenses incurred by such dealers in connection withwarranty obligations for which the manufacturer, factory branch, distributor,or distributor branch is legally responsible or which the manufacturer,factory branch, distributor, or distributor branch imposes upon the dealer;
6. Misrepresent in any way to purchasers of trailers that warranties withrespect to the manufacture, performance, or design of the trailer are made bythe dealer, either as warrantor or co-warrantor;
7. Require the dealer to make warranties to customers in any manner relatedto the manufacture, performance, or design of the trailer; or
8. Shift or attempt to shift to the trailer dealer, directly or indirectly,any liabilities of the manufacturer, factory branch, distributor ordistributor branch under the Virginia Motor Vehicle Warranty Enforcement Act(§ 59.1-207.9 et seq.), unless such liability results from the act oromission by the dealer.
C. Notwithstanding the terms of any franchise, it shall be unlawful for anytrailer manufacturer, factory branch, distributor, or distributor branch tofail to indemnify and hold harmless its trailer dealers against any losses ordamages arising out of complaints, claims, or suits relating to themanufacture, assembly, or design of trailers, parts, or accessories, or otherfunctions by the manufacturer, factory branch, distributor, or distributorbranch beyond the control of the dealer, including, without limitation, theselection by the manufacturer, factory branch, distributor, or distributorbranch of parts or components for the trailer or any damages to merchandiseoccurring in transit to the dealer where the carrier is designated by themanufacturer, factory branch, distributor, or distributor branch. The dealershall notify the manufacturer of pending suits in which allegations are madewhich come within this subsection whenever reasonably practicable to do so.Every trailer dealer franchise issued to, amended, or renewed for trailerdealers in Virginia shall be construed to incorporate provisions consistentwith the requirements of this subsection.
D. On any new trailer, any uncorrected damage or any corrected damageexceeding three percent of the manufacturer's or distributor's suggestedretail price as defined in 15 U.S.C. §§ 1231-1233, as measured by retailrepair costs, must be disclosed to the dealer in writing prior to delivery.Factory mechanical repair and damage to glass, tires, and bumpers areexcluded from the three percent rule when properly replaced by identicalmanufacturer's or distributor's original equipment or parts. Whenever a newtrailer is damaged in transit, when the carrier or means of transportation isdetermined by the manufacturer or distributor, or whenever a trailer isotherwise damaged prior to delivery to the new trailer dealer, the newtrailer dealer shall:
1. Notify the manufacturer or distributor of the damage within three businessdays from the date of delivery of the new trailer to the new trailerdealership or within the additional time specified in the franchise; and
2. Request from the manufacturer or distributor authorization to replace thecomponents, parts, and accessories damaged or otherwise correct the damage,unless the damage to the trailer exceeds the three percent rule, in whichcase the dealer may reject the trailer within three business days.
E. If the manufacturer or distributor refuses or fails to authorizecorrection of such damage within ten days after receipt of notification, orif the dealer rejects the trailer because damage exceeds the three percentrule, ownership of the new trailer shall revert to the manufacturer ordistributor, and the new trailer dealer shall have no obligation, financialor otherwise, with respect to such trailer. Should either the manufacturer,distributor, or the dealer elect to correct the damage or any other damageexceeding the three percent rule, full disclosure shall be made by the dealerin writing to the buyer and an acknowledgment by the buyer is required. Ifthere is less than three percent damage, no disclosure is required, providedthe damage has been corrected. Predelivery mechanical work shall not requirea disclosure. Failure to disclose any corrected damage within the knowledgeof the selling dealer to a new trailer in excess of the three percent ruleshall constitute grounds for revocation of the buyer order, provided that,within thirty days of purchase, the trailer is returned to the dealer with anaccompanying written notice of the grounds for revocation. In case ofrevocation pursuant to this section, the dealer shall accept the trailer andrefund any payments made to the dealer in connection with the transaction,less a reasonable allowance for the consumer's use of the trailer as definedin § 59.1-207.11.
F. If there is a dispute between the manufacturer, factory branch,distributor, or distributor branch and the dealer with respect to any matterreferred to in subsection A, B, or C of this section, either party maypetition the Commissioner in writing, within thirty days after either partyhas given written notice of the dispute to the other, for a hearing. Thedecision of the Commissioner shall be binding on the parties, subject torights of judicial review and appeal as provided in Chapter 40 (§ 2.2-4000 etseq.) of Title 2.2. However, nothing contained in this section shall give theCommissioner any authority as to the content or interpretation of anymanufacturer's or distributor's warranty.
A. Each trailer manufacturer, factory branch, distributor, or distributorbranch shall (i) specify in writing to each of its trailer dealers licensedin the Commonwealth the dealer's obligations for preparation, delivery, andwarranty service on its products and (ii) compensate the dealer for warrantyparts, service and diagnostic work required of the dealer by the manufactureror distributor as follows:
1. Compensation of a dealer for warranty parts, service and diagnostic workshall not be less than the amounts charged by the dealer for themanufacturer's or distributor's original parts, service and diagnostic workto retail customers for nonwarranty service, parts and diagnostic workinstalled or performed in the dealer's service department unless the amountsare not reasonable;
2. For purposes of determining warranty parts and service compensation,menu-priced parts or services, group discounts, special event discounts, andspecial event promotions shall not be considered in determining amountscharged by the dealer to retail customers;
3. Increases in dealer warranty parts and service compensation and diagnosticwork compensation, pursuant to this section, shall be requested by the dealerin writing, shall be based on 100 consecutive repair orders or all repairorders over a ninety-day period, whichever occurs first and, in the case ofparts, shall be stated as a percentage of markup which shall be uniformlyapplied to all the manufacturer's or distributor's parts;
4. In the case of warranty parts compensation, the provisions of thissubsection shall be effective only for model year 1992 and succeeding modelyears;
5. If a manufacturer or distributor furnishes a part to a dealer at no costfor use by the dealer in performing work for which the manufacturer ordistributor is required to compensate the dealer under this section, themanufacturer or distributor shall compensate the dealer for the part in thesame manner as warranty parts compensation, less the wholesale costs, forsuch part as listed in the manufacturer's current price schedules; or
6. In the case of service work, manufacturer original parts or partsotherwise specified by the manufacturer or distributor, and parts provided bya dealer either pursuant to an adjustment program as defined in § 59.1-207.34or as otherwise requested by the manufacturer or distributor, the dealershall be compensated in the same manner as for warranty service or parts.
This section does not apply to compensation for parts such as components,systems, fixtures, appliances, furnishings, accessories, and features thatare designed, used, and maintained primarily for nonvehicular, residentialpurposes. Warranty audits of dealer records may be conducted by themanufacturer, factory branch, distributor, or distributor branch on areasonable basis, and dealer claims for warranty compensation shall not bedenied except for good cause, such as performance of nonwarranty repairs,lack of material documentation, fraud, or misrepresentation. Claims fordealer compensation shall be paid within thirty days of dealer submission orwithin thirty days of the end of an incentive program or rejected in writingfor stated reasons. The manufacturer, factory branch, distributor, ordistributor branch shall reserve the right to reasonable periodic audits todetermine the validity of all such paid claims for dealer compensation. Anychargebacks for warranty parts or service compensation and service incentivesshall only be for the twelve-month period immediately following the date ofthe claim and, in the case of chargebacks for sales compensation only, forthe eighteen-month period immediately following the date of claim. However,such limitations shall not be effective in the case of intentionally false orfraudulent claims.
B. It shall be unlawful for any trailer manufacturer, factory branch,distributor, or distributor branch to:
1. Fail to perform any of its warranty obligations, including tires, withrespect to a trailer;
2. Fail to assume all responsibility for any liability resulting fromstructural or production defects;
3. Fail to include in written notices of factory recalls to trailer ownersand dealers the expected date by which necessary parts and equipment will beavailable to dealers for the correction of defects;
4. Fail to compensate any of the trailer dealers licensed in the Commonwealthfor repairs effected by the dealer of merchandise damaged in manufacture ortransit to the dealer where the carrier is designated by the manufacturer,factory branch, distributor, or distributor branch;
5. Fail to compensate its trailer dealers licensed in the Commonwealth forwarranty parts, work, and service pursuant to subsection A of this section,or for legal costs and expenses incurred by such dealers in connection withwarranty obligations for which the manufacturer, factory branch, distributor,or distributor branch is legally responsible or which the manufacturer,factory branch, distributor, or distributor branch imposes upon the dealer;
6. Misrepresent in any way to purchasers of trailers that warranties withrespect to the manufacture, performance, or design of the trailer are made bythe dealer, either as warrantor or co-warrantor;
7. Require the dealer to make warranties to customers in any manner relatedto the manufacture, performance, or design of the trailer; or
8. Shift or attempt to shift to the trailer dealer, directly or indirectly,any liabilities of the manufacturer, factory branch, distributor ordistributor branch under the Virginia Motor Vehicle Warranty Enforcement Act(§ 59.1-207.9 et seq.), unless such liability results from the act oromission by the dealer.
C. Notwithstanding the terms of any franchise, it shall be unlawful for anytrailer manufacturer, factory branch, distributor, or distributor branch tofail to indemnify and hold harmless its trailer dealers against any losses ordamages arising out of complaints, claims, or suits relating to themanufacture, assembly, or design of trailers, parts, or accessories, or otherfunctions by the manufacturer, factory branch, distributor, or distributorbranch beyond the control of the dealer, including, without limitation, theselection by the manufacturer, factory branch, distributor, or distributorbranch of parts or components for the trailer or any damages to merchandiseoccurring in transit to the dealer where the carrier is designated by themanufacturer, factory branch, distributor, or distributor branch. The dealershall notify the manufacturer of pending suits in which allegations are madewhich come within this subsection whenever reasonably practicable to do so.Every trailer dealer franchise issued to, amended, or renewed for trailerdealers in Virginia shall be construed to incorporate provisions consistentwith the requirements of this subsection.
D. On any new trailer, any uncorrected damage or any corrected damageexceeding three percent of the manufacturer's or distributor's suggestedretail price as defined in 15 U.S.C. §§ 1231-1233, as measured by retailrepair costs, must be disclosed to the dealer in writing prior to delivery.Factory mechanical repair and damage to glass, tires, and bumpers areexcluded from the three percent rule when properly replaced by identicalmanufacturer's or distributor's original equipment or parts. Whenever a newtrailer is damaged in transit, when the carrier or means of transportation isdetermined by the manufacturer or distributor, or whenever a trailer isotherwise damaged prior to delivery to the new trailer dealer, the newtrailer dealer shall:
1. Notify the manufacturer or distributor of the damage within three businessdays from the date of delivery of the new trailer to the new trailerdealership or within the additional time specified in the franchise; and
2. Request from the manufacturer or distributor authorization to replace thecomponents, parts, and accessories damaged or otherwise correct the damage,unless the damage to the trailer exceeds the three percent rule, in whichcase the dealer may reject the trailer within three business days.
E. If the manufacturer or distributor refuses or fails to authorizecorrection of such damage within ten days after receipt of notification, orif the dealer rejects the trailer because damage exceeds the three percentrule, ownership of the new trailer shall revert to the manufacturer ordistributor, and the new trailer dealer shall have no obligation, financialor otherwise, with respect to such trailer. Should either the manufacturer,distributor, or the dealer elect to correct the damage or any other damageexceeding the three percent rule, full disclosure shall be made by the dealerin writing to the buyer and an acknowledgment by the buyer is required. Ifthere is less than three percent damage, no disclosure is required, providedthe damage has been corrected. Predelivery mechanical work shall not requirea disclosure. Failure to disclose any corrected damage within the knowledgeof the selling dealer to a new trailer in excess of the three percent ruleshall constitute grounds for revocation of the buyer order, provided that,within thirty days of purchase, the trailer is returned to the dealer with anaccompanying written notice of the grounds for revocation. In case ofrevocation pursuant to this section, the dealer shall accept the trailer andrefund any payments made to the dealer in connection with the transaction,less a reasonable allowance for the consumer's use of the trailer as definedin § 59.1-207.11.
F. If there is a dispute between the manufacturer, factory branch,distributor, or distributor branch and the dealer with respect to any matterreferred to in subsection A, B, or C of this section, either party maypetition the Commissioner in writing, within thirty days after either partyhas given written notice of the dispute to the other, for a hearing. Thedecision of the Commissioner shall be binding on the parties, subject torights of judicial review and appeal as provided in Chapter 40 (§ 2.2-4000 etseq.) of Title 2.2. However, nothing contained in this section shall give theCommissioner any authority as to the content or interpretation of anymanufacturer's or distributor's warranty.
A. Each trailer manufacturer, factory branch, distributor, or distributorbranch shall (i) specify in writing to each of its trailer dealers licensedin the Commonwealth the dealer's obligations for preparation, delivery, andwarranty service on its products and (ii) compensate the dealer for warrantyparts, service and diagnostic work required of the dealer by the manufactureror distributor as follows:
1. Compensation of a dealer for warranty parts, service and diagnostic workshall not be less than the amounts charged by the dealer for themanufacturer's or distributor's original parts, service and diagnostic workto retail customers for nonwarranty service, parts and diagnostic workinstalled or performed in the dealer's service department unless the amountsare not reasonable;
2. For purposes of determining warranty parts and service compensation,menu-priced parts or services, group discounts, special event discounts, andspecial event promotions shall not be considered in determining amountscharged by the dealer to retail customers;
3. Increases in dealer warranty parts and service compensation and diagnosticwork compensation, pursuant to this section, shall be requested by the dealerin writing, shall be based on 100 consecutive repair orders or all repairorders over a ninety-day period, whichever occurs first and, in the case ofparts, shall be stated as a percentage of markup which shall be uniformlyapplied to all the manufacturer's or distributor's parts;
4. In the case of warranty parts compensation, the provisions of thissubsection shall be effective only for model year 1992 and succeeding modelyears;
5. If a manufacturer or distributor furnishes a part to a dealer at no costfor use by the dealer in performing work for which the manufacturer ordistributor is required to compensate the dealer under this section, themanufacturer or distributor shall compensate the dealer for the part in thesame manner as warranty parts compensation, less the wholesale costs, forsuch part as listed in the manufacturer's current price schedules; or
6. In the case of service work, manufacturer original parts or partsotherwise specified by the manufacturer or distributor, and parts provided bya dealer either pursuant to an adjustment program as defined in § 59.1-207.34or as otherwise requested by the manufacturer or distributor, the dealershall be compensated in the same manner as for warranty service or parts.
This section does not apply to compensation for parts such as components,systems, fixtures, appliances, furnishings, accessories, and features thatare designed, used, and maintained primarily for nonvehicular, residentialpurposes. Warranty audits of dealer records may be conducted by themanufacturer, factory branch, distributor, or distributor branch on areasonable basis, and dealer claims for warranty compensation shall not bedenied except for good cause, such as performance of nonwarranty repairs,lack of material documentation, fraud, or misrepresentation. Claims fordealer compensation shall be paid within thirty days of dealer submission orwithin thirty days of the end of an incentive program or rejected in writingfor stated reasons. The manufacturer, factory branch, distributor, ordistributor branch shall reserve the right to reasonable periodic audits todetermine the validity of all such paid claims for dealer compensation. Anychargebacks for warranty parts or service compensation and service incentivesshall only be for the twelve-month period immediately following the date ofthe claim and, in the case of chargebacks for sales compensation only, forthe eighteen-month period immediately following the date of claim. However,such limitations shall not be effective in the case of intentionally false orfraudulent claims.
B. It shall be unlawful for any trailer manufacturer, factory branch,distributor, or distributor branch to:
1. Fail to perform any of its warranty obligations, including tires, withrespect to a trailer;
2. Fail to assume all responsibility for any liability resulting fromstructural or production defects;
3. Fail to include in written notices of factory recalls to trailer ownersand dealers the expected date by which necessary parts and equipment will beavailable to dealers for the correction of defects;
4. Fail to compensate any of the trailer dealers licensed in the Commonwealthfor repairs effected by the dealer of merchandise damaged in manufacture ortransit to the dealer where the carrier is designated by the manufacturer,factory branch, distributor, or distributor branch;
5. Fail to compensate its trailer dealers licensed in the Commonwealth forwarranty parts, work, and service pursuant to subsection A of this section,or for legal costs and expenses incurred by such dealers in connection withwarranty obligations for which the manufacturer, factory branch, distributor,or distributor branch is legally responsible or which the manufacturer,factory branch, distributor, or distributor branch imposes upon the dealer;
6. Misrepresent in any way to purchasers of trailers that warranties withrespect to the manufacture, performance, or design of the trailer are made bythe dealer, either as warrantor or co-warrantor;
7. Require the dealer to make warranties to customers in any manner relatedto the manufacture, performance, or design of the trailer; or
8. Shift or attempt to shift to the trailer dealer, directly or indirectly,any liabilities of the manufacturer, factory branch, distributor ordistributor branch under the Virginia Motor Vehicle Warranty Enforcement Act(§ 59.1-207.9 et seq.), unless such liability results from the act oromission by the dealer.
C. Notwithstanding the terms of any franchise, it shall be unlawful for anytrailer manufacturer, factory branch, distributor, or distributor branch tofail to indemnify and hold harmless its trailer dealers against any losses ordamages arising out of complaints, claims, or suits relating to themanufacture, assembly, or design of trailers, parts, or accessories, or otherfunctions by the manufacturer, factory branch, distributor, or distributorbranch beyond the control of the dealer, including, without limitation, theselection by the manufacturer, factory branch, distributor, or distributorbranch of parts or components for the trailer or any damages to merchandiseoccurring in transit to the dealer where the carrier is designated by themanufacturer, factory branch, distributor, or distributor branch. The dealershall notify the manufacturer of pending suits in which allegations are madewhich come within this subsection whenever reasonably practicable to do so.Every trailer dealer franchise issued to, amended, or renewed for trailerdealers in Virginia shall be construed to incorporate provisions consistentwith the requirements of this subsection.
D. On any new trailer, any uncorrected damage or any corrected damageexceeding three percent of the manufacturer's or distributor's suggestedretail price as defined in 15 U.S.C. §§ 1231-1233, as measured by retailrepair costs, must be disclosed to the dealer in writing prior to delivery.Factory mechanical repair and damage to glass, tires, and bumpers areexcluded from the three percent rule when properly replaced by identicalmanufacturer's or distributor's original equipment or parts. Whenever a newtrailer is damaged in transit, when the carrier or means of transportation isdetermined by the manufacturer or distributor, or whenever a trailer isotherwise damaged prior to delivery to the new trailer dealer, the newtrailer dealer shall:
1. Notify the manufacturer or distributor of the damage within three businessdays from the date of delivery of the new trailer to the new trailerdealership or within the additional time specified in the franchise; and
2. Request from the manufacturer or distributor authorization to replace thecomponents, parts, and accessories damaged or otherwise correct the damage,unless the damage to the trailer exceeds the three percent rule, in whichcase the dealer may reject the trailer within three business days.
E. If the manufacturer or distributor refuses or fails to authorizecorrection of such damage within ten days after receipt of notification, orif the dealer rejects the trailer because damage exceeds the three percentrule, ownership of the new trailer shall revert to the manufacturer ordistributor, and the new trailer dealer shall have no obligation, financialor otherwise, with respect to such trailer. Should either the manufacturer,distributor, or the dealer elect to correct the damage or any other damageexceeding the three percent rule, full disclosure shall be made by the dealerin writing to the buyer and an acknowledgment by the buyer is required. Ifthere is less than three percent damage, no disclosure is required, providedthe damage has been corrected. Predelivery mechanical work shall not requirea disclosure. Failure to disclose any corrected damage within the knowledgeof the selling dealer to a new trailer in excess of the three percent ruleshall constitute grounds for revocation of the buyer order, provided that,within thirty days of purchase, the trailer is returned to the dealer with anaccompanying written notice of the grounds for revocation. In case ofrevocation pursuant to this section, the dealer shall accept the trailer andrefund any payments made to the dealer in connection with the transaction,less a reasonable allowance for the consumer's use of the trailer as definedin § 59.1-207.11.
F. If there is a dispute between the manufacturer, factory branch,distributor, or distributor branch and the dealer with respect to any matterreferred to in subsection A, B, or C of this section, either party maypetition the Commissioner in writing, within thirty days after either partyhas given written notice of the dispute to the other, for a hearing. Thedecision of the Commissioner shall be binding on the parties, subject torights of judicial review and appeal as provided in Chapter 40 (§ 2.2-4000 etseq.) of Title 2.2. However, nothing contained in this section shall give theCommissioner any authority as to the content or interpretation of anymanufacturer's or distributor's warranty.
