If you are not in the habit of reading the documents that the manufacturer presents to you to sign, it is appropriate that you start. Whether you`re signing new documents because you`re buying a reseller or renewing your sales and service contract, what you find if you read it carefully may surprise you. Over the past five years, manufacturers have made more revisions that undermine distributors` rights to their distributor sales and service contracts than in the previous 25 years. The manufacturer has a system of licensed dealers who work on licensed sites to sell and serve its automotive products in the most efficient manner. Each licensed distributor is required to provide appropriate capital, equipment, personnel and facilities to properly sell, serve and protect the reputation of the manufacturer`s products. Many states have laws to protect car dealerships, including California, Connecticut, Delaware, Georgia, Indiana, Louisiana, Minnesota, Nevada and Washington, to name a few. If your state`s laws protect you, have your lawyer write a friendly but firm letter to the manufacturer that trains them. Manufacturers are dealing with 50 laws. It is easy to believe that they know the laws of all states, but they generally do not. We have to tell them. If you do that, they go to their legal department, which verifies what your lawyer has written about accuracy.
If that`s true, they`re usually back. Given the personal nature of this agreement and its objectives and purposes, the company expressly reserves the right to execute a Ford sales and service contract with individuals or other entities specially selected and approved by the company. How can you get a manufacturer to do what it`s supposed to do? It`s easy. Read your dealer contract before you sign it. Talk to your lawyer to find out if any of its provisions are contrary to your state`s laws. For example, many states make it illegal for manufacturers to terminate a franchise for no good reason or not to allow a buyer for no good reason. California law is a good example of how this can work. It protects dealers from the termination of their franchise by a manufacturer when the dealer contract expires.
If a new agreement is not signed, the old agreement will simply continue. It cannot be terminated without allowing the dealer to be heard by the state`s administrative authority, the New Motor Vehicle Board. Erin Tenner has represented car dealerships in sales contracts for 30 years and is a partner of Gray Duffy LLP. It can be reached at firstname.lastname@example.org or 1-818-907-4071. The distributor undertakes to provide, in the requested form and in a timely manner, all applications and information requested by the manufacturer to evaluate the proposed modification or sale. The manufacturer undertakes to consider all factors requested by the distributor and to base its decision on whether the proposed amendment can lead to a successful distribution operation, with acceptable management and ownership, providing customers on the authorized site with satisfactory distribution and service. Your lawyer can help you work in negotiations with the manufacturer. Before you agree in writing to rebuild or expand, find out if your state offers protection against inappropriate requirements.
If you want to sign the agreement, make sure the agreement is specific and gives you enough time to complete the extension.