Motor and Other Vehicles

CHAPTER 31-5.1
Regulation of Business Practices Among Motor Vehicle Manufacturers, Distributors, and Dealers

SECTION 31-5.1-1

§ 31-5.1-1. Definitions.

The following words and phrases, for the purposes of this chapter, have the following meanings:

(1) "Designated family member" means the spouse, child, grandchild, parent, brother, or sister of the owner of a new motor vehicle dealership who, in the case of the owner's death, is entitled to inherit the ownership interest in the new motor vehicle dealership under the terms of the owner's will, or who has been nominated in any other written instrument, or who, in the case of an incapacitated owner of a new motor vehicle dealership, has been appointed by a court as the legal representative of the new motor vehicle dealer's property.

(2) "Distributor" means any person, firm, association, corporation, or trust, resident or nonresident, who in whole or in part offers for sale, sells, or distributes any new motor vehicle to new motor vehicle dealers, who maintains factory representatives or who controls any person, firm, association, corporation or trust, resident or nonresident, who in whole or in part offers for sale, sells or distributes any new motor vehicle to new motor vehicle dealers.

(3) "Established place of business" means a permanent, commercial building located within this state, easily accessible and open to the public at all reasonable times, and at which the business of a new motor vehicle dealer, including the display and repair of vehicles, may be lawfully carried on in accordance with the terms of all applicable building codes, zoning, and other land-use regulatory ordinances.

(4) "Factory branch" means a branch office maintained by a manufacturer for the purpose of selling, or offering for sale, vehicles to a distributor or new motor vehicle dealer, or for directing or supervising in whole or in part factory or distributor representatives.

(5) "Franchise" means the agreement or contract between any new motor vehicle manufacturer, written or otherwise, and any new motor vehicle dealer which purports to fix the legal rights and liabilities of the parties to that agreement or contract, and pursuant to which the dealer purchases and resells the franchise product or leases or rents the dealership premises.

(6) "Fraud" includes, in addition to its normal legal connotation, the following: a misrepresentation in any manner, whether intentionally false or due to gross negligence, of a material fact; a promise or representation not made honestly and in good faith; and an intentional failure to disclose a material fact.

(7) "Good faith" means honesty in fact and the observation of reasonable commercial standards of fair dealing in the trade as defined and interpreted in § 6A-2-103(1)(b).

(8) "Manufacturer" means any person, partnership, firm, association, corporation, or trust, resident or nonresident, who manufactures or assembles new motor vehicles, or imports for distribution through distributors of motor vehicles, or any partnership, firm, association, joint venture, corporation, or trust, resident or nonresident, which is controlled by the manufacturer.

(9) "Motor vehicle" means every vehicle intended primarily for use and operation on the public highways which is self-propelled, not including farm tractors and other machines and tools used in the production, harvesting, and care of farm products.

(10) "New motor vehicle" means a vehicle which has been sold to a new motor vehicle dealer and which has not been used for other than demonstration purposes and on which the original title has not been issued from the new motor vehicle dealer. The term "motor vehicle" also includes any engine, transmission, or rear axle, regardless of whether it is attached to a vehicle chassis, that is manufactured for installation in any motor-driven vehicle with a gross vehicle weight rating of more than sixteen thousand (16,000) pounds that is required to be registered.

(11) "New motor vehicle dealer" means any person engaged in the business of selling, offering to sell, soliciting, or advertising the sale of new motor vehicles and who holds, or held at the time a cause of action under this chapter accrued, a valid sales and service agreement, franchise, or contract, granted by the manufacturer or distributor for the retail sale of that manufacturer's or distributor's new motor vehicles.

(12) "Person" means a natural person, corporation, partnership, trust, or other entity, and, in case of an entity, it includes any other entity in which it has a majority interest or effectively controls, as well as the individual officers, directors, and other persons in active control of the activities of that entity.

(13) "Relevant market area" means the area within a radius of twenty (20) miles around an existing dealer or the area of responsibility defined in the franchise, whichever is greater.

History of Section.
(P.L. 1974, ch. 292, § 1; P.L. 1981, ch. 346, § 1; P.L. 1982, ch. 448, § 1; P.L. 2009, ch. 227, § 1; P.L. 2009, ch. 228, § 1.)