§1261. Unauthorized acts
A. It shall be a violation of this Chapter:
(1) For a manufacturer, a distributor, a wholesaler, distributor branch, factory branch,
converter or officer, agent, or other representative thereof:
(a) To induce or coerce, or attempt to induce or coerce, any licensee:
(i) To order or accept delivery of any recreational product, motor vehicle or vehicles,
appliances, equipment, parts or accessories therefor, or any other commodity or commodities
which shall not have been voluntarily ordered.
(ii) To order or accept delivery of any vehicle with special features, appliances,
accessories, or equipment not included in the list price of said vehicles as publicly advertised.
(iii) To order for any person any parts, accessories, equipment, machinery, tools,
appliances, or any commodity whatsoever.
(iv) To assent to a release, assignment, novation, waiver, or estoppel which would
relieve any person from liability to be imposed by law, unless done in connection with a
settlement agreement to resolve a matter pending a commission hearing or pending litigation
between a manufacturer, distributor, wholesaler, distributor branch or factory branch, or
officer, agent, or other representative thereof.
(v) To enter into a franchise with a licensee or during the franchise term, use any
written instrument, agreement, release, assignment, novation, estoppel, or waiver, to attempt
to nullify or modify any provision of this Chapter, or to require any controversy between a
dealer and a manufacturer to be referred to any person or entity other than the commission,
or duly constituted courts of this state or the United States, if such referral would be binding
upon the dealer. Such instruments are null and void, unless done in connection with a
settlement agreement to resolve a matter pending a commission hearing or pending litigation.
(vi) To waive the right to a jury trial.
(vii) To participate in an advertising group or to participate monetarily in an
advertising campaign or contest or to purchase any promotional materials, showroom, or
other display decorations or materials at the expense of such motor vehicle dealer or specialty
(viii) To adhere to performance standards that are not applied uniformly to other
similarly situated motor vehicle dealers or specialty dealers. Any such performance
standards shall be fair, reasonable, equitable, and based on accurate information. If
dealership performance standards are based on a survey, the manufacturer, converter,
distributor, wholesaler, distributor branch, or factory branch shall establish the objectivity
of the survey process and provide this information to any motor vehicle dealer or specialty
vehicle dealer of the same line make covered by the survey request. Each response to a
survey used by a manufacturer in preparing an evaluation or performance-rating of a motor
vehicle dealer shall be made available to that motor vehicle dealer, or it cannot be used by
the manufacturer. However, if a customer requests that the manufacturer or distributor not
disclose the consumer's identity to the dealer, the manufacturer may withhold the consumer's
identity in providing the survey response to the dealer, and the manufacturer may use the
response. Any survey used must have the following characteristics:
(aa) It was designed by experts.
(bb) The proper universe was examined.
(cc) A representative sample was chosen.
(dd) The data was accurately reported.
(ix) To release, convey, or otherwise provide customer information, if to do so is
unlawful or if the customer objects in writing. This does not include information that is
necessary for the manufacturer to meet its obligations to the dealer or consumers in regard
to contractual responsibilities, vehicle recalls, or other requirements imposed by state or
federal law. The manufacturer is further prohibited from providing any consumer
information received from the dealer to any unaffiliated third party.
(x) To pay the attorney fees of the manufacturer or distributor related to hearings and
appeals brought under this Chapter.
(b) To refuse to deliver to any licensee having a franchise or contractual arrangement
for the retail sale of vehicles sold or distributed by such manufacturer, distributor,
wholesaler, distributor branch or factory branch, any motor vehicle, publicly advertised for
immediate delivery, within sixty days after such dealer's order shall have been received.
(c) To threaten to cancel any franchise or any contractual agreement existing between
such manufacturer, distributor, wholesaler, distributor branch or factory branch and said
dealer for any reason including but not limited to failure to meet performance standards.
(d) To unfairly, without just cause and due regard to the equities of such dealer,
cancel the franchise of any licensee. Failure to meet performance standards based on a
survey of sales penetration in a regional, national, territorial, or other geographic area shall
not be the sole cause for cancellation of a franchise. The nonrenewal of a franchise or selling
agreement with such dealer or his successor without just provocation or cause, or the refusal
to approve a qualified transferee or qualified successor to the dealer-operator as provided for
in the franchise or selling agreement, or solely for failure to meet performance standards
based on a survey of sales penetration in a regional, national, territorial, or other geographic
area, shall be deemed an evasion of this Paragraph and shall constitute an unfair cancellation,
regardless of the terms or provisions of such franchise or selling agreement. However, at
least ninety-days notice shall be given to the dealer of any cancellation or nonrenewal of a
franchise except for a cancellation arising out of the financial default of the motor vehicle
dealer or fraudulent activity of the dealer principal which results in the conviction of a crime
punishable by imprisonment. The provisions of this Subsection relating to performance
standards shall not apply to recreational products dealers.
(e) To refuse to extend to a licensee the privilege of determining the mode or manner
of available transportation facility that such dealer desires to be used or employed in making
deliveries of vehicles to him or it.
(f) To resort to or use any false or misleading advertisement in connection with his
business as such manufacturer of motor vehicles, distributor, wholesaler, distributor branch
or factory branch, or officer, agent, or other representative thereof.
(g) To delay, refuse, or fail to deliver motor vehicles in reasonable quantities relative
to the licensee's facilities and sales potential in the relevant market area. This Subparagraph
shall not be valid, however, if such failure is caused by acts or causes beyond the control of
the manufacturer, distributor, or other such party.
(h) To ship or sell motor vehicles or recreational products to a licensee prior to the
licensee having been granted a license by the commission to sell such vehicles.
(i) To unreasonably withhold consent to the sale, transfer, or exchange of the
franchise to a qualified transferee capable of being licensed as a dealer in this state, provided
the transferee meets the criteria generally applied by the manufacturer in approving new
dealers and agrees to be bound by all the terms and conditions of the standard franchises.
(j) To fail to respond in writing to a written request for consent as specified in
Subparagraph (i) of this Paragraph within sixty days of receipt of a written request on the
forms, if any, generally utilized by the manufacturer or distributor for such purposes and
containing the information required therein. Failure to respond shall be deemed to be
consent to the request.
(k)(i) To sell or offer to sell a new or unused motor vehicle directly to a consumer
except when any one of the following conditions is met:
(aa) Operating an existing, licensed, and franchised motor vehicle dealership for a
reasonable period, not to exceed two years.
(bb) Operating an existing, licensed, and franchised motor vehicle dealership which
is for sale to any qualified independent person at a fair and reasonable price, not to exceed
(cc) Operating in a bona fide relationship in which a person independent of a
manufacturer has made a significant investment subject to loss in the dealership, and can
reasonably expect to acquire full ownership of such dealership on reasonable terms and
(ii) After any of the conditions have been met under Subitems (aa) and (bb) of Item
(i) of this Subparagraph, the commission may allow the manufacturer to continue operating
an existing, licensed, and franchised motor vehicle dealership for longer than two years
when, in the discretion of the commission, the best interest of the manufacturer, consuming
public, and licensees are best served.
(l) To condition the renewal or extension of a franchise on a new motor vehicle
dealer's substantial renovation of the dealer's place of business or on the construction,
purchase, acquisition, or rental of a new place of business by the new motor vehicle dealer,
unless the manufacturer has advised the new motor vehicle dealer in writing of its intent to
impose such a condition within a reasonable time prior to the effective date of the proposed
date of renewal or extension, but in no case less than one hundred eighty days, and provided
the manufacturer demonstrates the need for such demand in view of the need to service the
public and the economic conditions existing in the motor vehicle industry at the time such
action would be required of the new motor vehicle dealer. As part of any such condition the
manufacturer shall agree, in writing, to supply the dealer with an adequate supply and
marketable model mix of motor vehicles to meet the sales levels necessary to support the
increased overhead incurred by the dealer by reason of such renovation, construction,
purchase, or rental of a new place of business.
(m) To fail to compensate its dealers for the work and services they are required to
perform in connection with the dealer's delivery and preparation obligations according to the
terms of compensation. The commission shall find the compensation to be reasonable or the
manufacturer shall remedy any deficiencies.
(n) To fail to designate and provide to the commission in writing either the
community or territory assigned to a licensee. The provisions of this Subparagraph shall not
apply to trailers.
(o) To fail or refuse to sell or offer to sell to all motor vehicle franchisees in a line
make, every motor vehicle sold or offered for sale under a franchise to any motor vehicle
franchisee of the same-line make, or to unreasonably require a motor vehicle dealer to pay
an extra fee, purchase unreasonable advertising displays or any other materials, or to
remodel, renovate, or recondition its existing facilities as a prerequisite to receiving a certain
model or series of vehicles. However, the failure to deliver any such motor vehicle shall not
be considered a violation of this Section if the failure is due to a lack of manufacturing
capacity or to a strike or labor difficulty, a shortage of materials, a freight embargo or other
cause of which the franchisor has no control. This Subparagraph shall not apply to
recreational product manufacturers.
(p) To unreasonably discriminate among competing, similarly situated, same-line
make dealers in the sales of vehicles, in the availability of such vehicles, in the terms of
incentive programs or sales promotion plans, or in other similar programs.
(q) To terminate, cancel, or refuse to continue any franchise agreement based upon
the fact that the motor vehicle dealer owns, has an investment in, participates in the
management, or holds a franchise agreement for the sale or service of another make or line
of new motor vehicles at a different dealership location, or intends to or has established
another make or line of new motor vehicles in the same dealership facilities of the
manufacturer or distributor.
(r) To demand compliance with facilities requirements that include any requirements
that a motor vehicle dealer establish or maintain exclusive office, parts, service or body shop
facilities, unless the requirements would be reasonable and justified by business
considerations. The burden of proving that the requirements are reasonable and justified by
business considerations is on the manufacturer. If the franchise agreement of the
manufacturer or distributor requires the approval of the manufacturer or distributor for
facility uses or modifications, the manufacturer or distributor shall approve or disapprove
such a request in writing within sixty days of receipt of such request.
(s) To use any subsidiary, affiliate, or any other controlled person or entity, or to
employ the services of a third party, to accomplish what would otherwise be illegal conduct
under this Chapter on the part of the manufacturer or distributor.
(t)(i) To operate a satellite warranty and repair center, to authorize a person to
perform warranty repairs, including emergency repairs, who is not a motor vehicle dealer,
fleet owner, or an emergency services company or emergency services related company, or
to authorize a motor vehicle dealer to operate a satellite warranty and repair center within the
community or territory of a same-line or make motor vehicle dealer. This Subparagraph shall
not apply to recreational product manufacturers. For the purposes of this Subparagraph,
"fleet owner" means a person, including a governmental entity, who is approved and
authorized by a manufacturer to perform warranty repairs and owns or leases vehicles for its
own use or a renting or leasing company that rents, maintains, or leases vehicles to a third
party. For the purposes of this Subparagraph, "emergency services company or emergency
services related company" means a person who operates any vehicle designated and
authorized to respond to an emergency. An emergency vehicle includes but is not limited
to police and security vehicles, fire and rescue vehicles, medical vehicles, and civil
emergency vehicles, including public utility crews dealing with gas, electricity, or water, or
the repair of defective equipment on a scene.
(ii) The manufacturer may authorize a fleet owner to perform warranty repairs if the
manufacturer determines that the fleet owner has the same basic level of requirements for
special tools, technician certification, and training that are required of a franchise dealer but
only those as determined by the manufacturer, in its sole discretion, that are necessary to
perform the specified limited type of warranty repairs on the makes and models of motor
vehicles for which the fleet owner is authorized to perform warranty repairs.
(iii) A manufacturer who authorizes a fleet owner to perform warranty repairs shall
give notification of the authorization to the dealer located in the same area of responsibility
where the fleet owner intends to perform the authorized warranty repairs.
(iv) The provisions of Items (ii) and (iii) of this Subparagraph shall not apply to
manufacturers who authorize fleet owners whose commercial vehicles are used for the
movement of property, freight, or goods in intrastate or interstate commerce.
(v) The commission has no authority over a fleet owner or an emergency services
company or emergency services related company with respect to the requirements of this
(vi) A repair facility of a fleet owner authorized pursuant to this Subparagraph to
perform warranty repairs shall not be deemed a satellite warranty and repair center as defined
in R.S. 32:1252 and shall not be required to be licensed by the commission pursuant to R.S.
(u) To make a change in the area of responsibility described in the franchise
agreement or sales and service agreement of a dealer, without the franchisor, converter, or
manufacturer giving said dealer and the commission no less than sixty days prior written
notice by certified or registered mail.
(v) To attempt to induce or coerce, or to induce or coerce, any motor vehicle dealer
to enter into any agreement with such manufacturer, distributor, wholesaler, distributor
branch or factory branch or representative thereof, or to do any other act unfair to said dealer.
(w)(i) To coerce or attempt to coerce any retail motor vehicle dealer or prospective
retail motor vehicle dealer to offer to sell or sell any extended service contract or extended
maintenance plan or gap product offered, sold, backed by, or sponsored by the manufacturer
or distributor or affiliate or sell, assign, or transfer any retail installment sales contract or
lease obtained by the dealer in connection with the sale or lease by him of motor vehicles
manufactured or sold by the manufacturer or distributor, to a specified finance company or
class of finance companies, leasing company or class of leasing companies, or to any other
specified persons by any of the following:
(aa) By any statement, promise, or threat that the manufacturer or distributor will in
any manner benefit or injure the dealer, whether the statement, suggestion, threat, or promise
is express or implied or made directly or indirectly.
(bb) By any act that will benefit or injure the dealer.
(cc) By any contract, or any express or implied offer of contract, made directly or
indirectly to the dealer, for handling the motor vehicle on the condition that the dealer shall
offer to sell or sell any extended service contract or extended maintenance plan offered, sold,
backed by, or sponsored by the manufacturer or distributor or that the dealer sell, assign, or
transfer his retail installment sales contract on or lease of the vehicle, to a specified finance
company or class of finance companies, leasing company or class of leasing companies, or
to any other specified person.
(dd) Any such statements, threats, promises, acts, contracts, or offers of contracts,
when their effect may be to lessen or eliminate competition.
(ii) Nothing contained in this Subparagraph shall prohibit a manufacturer or
distributor from offering or providing incentive benefits or bonus programs to a retail motor
vehicle dealer or prospective retail motor vehicle dealer who makes the voluntary decision
to offer to sell or sell any extended service contract or extended maintenance plan offered,
sold, backed, or sponsored by the manufacturer or distributor or to sell, assign, or transfer any
retail installment sale or lease by him of motor vehicles manufactured or sold by the
manufacturer or distributor to a specified finance company or leasing company.
(x) To charge back, deny vehicle allocation, withhold payments, or take any other
adverse actions against a motor vehicle dealer because of a sale of a new motor vehicle that
is exported from the United States, unless it is shown that the dealer knew or reasonably
should have known on the date of the sale that the new motor vehicle was to be exported.
A motor vehicle dealer shall be rebuttably presumed to have no knowledge of the export if
the motor vehicle is sold by the dealer to a resident of the United States who titles and
registers the motor vehicle in any state within the United States.
(y) To disqualify a manufacturer's sales or service satisfaction survey that pertains
to a dealership employee's personal motor vehicle or specialty vehicle solely because it was
mailed or communicated electronically from a dealership.
(2) For a motor vehicle dealer, specialty vehicle dealer, recreational product dealer,
used motor vehicle dealer, or a motor vehicle salesman:
(a) To require a purchaser of a vehicle, as a condition of sale and delivery thereof,
to also purchase special features, appliances, accessories, or equipment not desired or
requested by the purchaser; however, this prohibition shall not apply as to special features,
appliances, accessories, or equipment which are permanently affixed to the vehicle.
(b) To represent and sell as a new vehicle any vehicle, the legal title of which has
been transferred by a manufacturer, distributor, or dealer to an ultimate purchaser.
(c) To resort to or use any false or misleading advertisement in connection with his
business as such vehicle dealer or motor vehicle salesman.
(d) To sell or offer to sell makes, models, or classifications of new vehicles for which
no franchise and license to sell is held.
(e) Except as otherwise approved by the commission, to sell or offer to sell a vehicle
from an unlicensed location.
(f) To deliver to a prospective purchaser a new or a used vehicle on a sale
conditioned on financing, i.e., a spot delivery, except on the following terms and conditions
which shall be in writing and shall be a part of the conditional sales contract or other written
notification signed by the purchaser:
(i) That if the sale is not concluded by the financing of the sale to the purchaser
within twenty-five days of the delivery, the sale contract shall be null and void.
(ii) That the vehicle being offered for trade-in by the purchaser shall not be sold by
the dealer until the conditional sale is complete.
(iii) That there shall be no charge to the purchaser should the conditional sale not be
completed, including but not limited to mileage charges or charges to refurbish the vehicle
offered for trade-in. However, the purchaser shall be responsible for any and all damages to
the vehicle or other vehicles damaged by the fault of the purchaser and any and all liability
incurred by the purchaser during the purchaser's custody of the vehicle to the extent provided
for in R.S. 22:1296.
(iv) That if the conditional sale is not completed, the dealer shall immediately refund
to the purchaser upon return of the vehicle all sums placed with the dealership as a deposit
or any other purpose associated with the attempted sale of the vehicle.
(v) That the prospective purchaser shall return the vehicle to the dealership within
forty-eight hours of notification by the dealer that the conditional sale will not be completed.
If the prospective purchaser does not return the vehicle to the dealership within forty-eight
hours of notification by the dealer, an authorized agent of the dealer shall have the right to
recover the vehicle without the necessity of judicial process, provided that such recovery can
be accomplished without unauthorized entry into a closed dwelling, whether locked or
unlocked and without a breach of peace.
(g) To pay a fee to any person in return for the solicitation, procurement, or
production by that person of prospective purchasers for new and used vehicles, except to a
salesman licensed under the provisions of this Chapter.
(h) To fail to fully and completely explain each charge listed on a retail buyer's order
or vehicle invoice prior to the purchase of a vehicle.
(i) When selling a vehicle to a consumer, to assess any consumer services fees,
which shall include fees for treating the interior upholstery of the vehicle, oil changes,
roadside assistance, dealer inspections, or any other service offered by the dealer, without
allowing the buyer to refuse such services and be exempt from payment for such services.
The provisions of this Subparagraph shall not apply to dealer-added options or accessories
which are permanently affixed to the vehicle.
(j) To fail to disclose to a purchaser, in writing, which components of a specialty
vehicle are subject to a manufacturer's or distributor's warranty agreement and which
components are subject to a specialty vehicle dealer's or other warranty agreement. The
specialty vehicle dealer shall identify in writing the location of the two nearest authorized
manufacturer or distributor warranty service providers. School bus warranty repair work,
except for engine and transmission repair work, may also be performed by repair facilities,
authorized by the manufacturer or distributor, which are not school bus dealers. Further,
nothing in this Chapter shall prohibit a manufacturer of school buses licensed by the
Louisiana Motor Vehicle Commission from authorizing warranty and other repair or
maintenance services to be performed at any location of a motor vehicle dealer licensed
under this Chapter which holds a franchise from any affiliate or subsidiary of the school bus
(k)(i) To fail to disclose to a purchaser in writing on the sales contract, buyer's order,
or any other document that the dealer may be participating in finance charges associated with
(ii) To participate in a finance charge that would result in a difference between the
buy rate and the contract rate of more than three percentage points.
(iii) The provisions of this Subparagraph shall apply only to transactions subject to
the Louisiana Motor Vehicle Sales Finance Act.
(3) For a motor vehicle or recreational product lessor or motor vehicle lessor agent:
(a) To represent and sell as a new vehicle any vehicle which has been used or
intended to be used and operated for leasing and rental purposes.
(b) To resort to or use any false or misleading advertising in connection with the
business of leasing or renting vehicles.
(c) To lease, rent, sell, or offer to sell a vehicle from a location not licensed for such
(d) To rent or lease any vehicle which has been located within this state for a period
of thirty days or more, unless such vehicle has been issued a Louisiana license plate by, and
all license fees and taxes have been paid to, this state.
(e) To pay a fee to any person in return for the solicitation, procurement, or
production by that person of prospective lessees of vehicles, unless the person receiving the
fee is a lease facilitator who holds a valid license as provided by this Chapter and a valid
appointment from the motor vehicle lessor as provided by R.S. 32:1266(B)(1). The fees
prohibited by this Subparagraph shall not include amounts paid to a dealer as part of the
consideration for the sale or assignment of a lease or leased vehicle or other amounts paid
to the dealer who transfers the title on the vehicle or assigns the lease contract to the motor
(f) To fail to fully and completely explain each charge listed on a retail buyer's or
lessee's order or vehicle invoice or leasing agreement prior to the lease of a vehicle.
(g) When leasing a vehicle to a consumer, to assess any consumer services fees,
which shall include fees for treating the interior upholstery of the vehicle, oil changes,
roadside assistance, dealer inspections, or any other service offered by the motor vehicle
lessor, without allowing the consumer to refuse such services and be exempt from payment
for such services. The provisions of this Subparagraph shall not apply to motor vehicle
lessor-added options or accessories which are permanently affixed to the vehicle.
(4) For a lease facilitator:
(a) To hold himself out to any person as a "leasing company", "leasing agent", "lease
facilitator", or similar title, directly or indirectly engaged in the business of a lease facilitator,
or otherwise engaged in the solicitation or procurement of prospective lessees for vehicles
not titled in the name of and registered to the lease facilitator, without holding a valid lease
facilitator license and being in compliance with the terms of this Chapter.
(b) To sell or offer to sell a new vehicle.
(c) To accept a fee from a dealer or consumer.
(d) To sign a vehicle manufacturer's statement of origin to a vehicle, accept an
assignment of a manufacturer's statement of origin to a vehicle, or otherwise assume any
element of title to a new vehicle.
(e) To procure or solicit prospective lessees for or on behalf of any person other than
a motor vehicle lessor.
(f) To act in the capacity of or engage in the business of a lease facilitator without
a valid appointment from a motor vehicle lessor to act on behalf of the motor vehicle lessor
in soliciting prospective lease clients or customers as provided by this Chapter.
(5) For a broker:
(a) To hold himself out to any person as a "broker", "purchasing company", "sales
agent", or similar title, engaged in the business of broker, or otherwise engaged in the
solicitation or procurement of prospective purchasers for vehicles not titled in the name of
and registered to the broker, unless the broker holds a valid broker license and is in
compliance with the terms of this Chapter.
(b) To sell, or offer to sell, or display a new vehicle.
(c) To be paid a fee by a dealer.
(d) To sign a vehicle manufacturer's statement of origin to a vehicle, accept an
assignment of a manufacturer's statement of origin to a vehicle, or otherwise assume any
element of title to a new vehicle.
(e) To act in the capacity of or engage in the business of a broker without a valid
license issued as provided by this Chapter and a valid appointment from a motor vehicle
lessor to act on behalf of the motor vehicle lessor in soliciting prospective lease clients or
customers as provided by this Chapter.
(f) To fail to execute a written brokering agreement and provide a completed copy
to both of the following:
(i) Any consumer entering into the brokering agreement. The completed copy shall
be provided prior to the consumer's signing an agreement for the purchase of the vehicle
described in the brokering agreement, or, prior to accepting one hundred dollars or more
from that consumer, whichever comes first.
(ii) The selling dealer. The completed copy shall be provided prior to the selling
dealer's entering into a purchase agreement with the consumer at the time of delivery.
(g) To accept a purchase deposit from any consumer that exceeds two point five
percent of the selling price of the vehicle described in the brokering agreement.
(h) To fail to refund any purchase money, including purchase deposits, upon demand
by a consumer at any time prior to the consumer's signing a vehicle purchase agreement with
a selling dealer of the vehicle described in the brokering agreement.
(i) To fail to cancel a brokering agreement and refund, upon demand, any money
paid by a consumer, including any brokerage fee, under any of the following circumstances:
(i) When the final price of the brokered vehicle exceeds the purchase price listed in
the brokering agreement.
(ii) When the vehicle delivered is not as described in the brokering agreement.
(iii) When the brokering agreement expires prior to the customer's being presented
with a purchase agreement from a selling dealer arranged through the brokering dealer that
contains a purchase price at or below the price listed in the brokering agreement.
(j) To act as a seller and provide brokering services, both in the same transaction.
(k) To fail to disclose to the consumer the dollar amount of any fee that the consumer
is obligated to pay to the broker. This arrangement shall be confirmed in a brokering
(l) To fail to maintain, for a minimum of three years, a copy of the executed
brokering agreement and other notices and documents related to each brokered transaction.
(m) To fail to advise the consumer, prior to accepting any money, that a full refund
will be given if the motor vehicle ordered through the broker is not obtained for the
(6) For any person or other licensee:
(a) To modify a franchise during the term of the agreement or upon its renewal if the
modification substantially and adversely affects the franchisee's rights, obligations,
investment, or return on investment without giving sixty days written notice of the proposed
modification to the licensee and the commission which includes the grounds upon which the
modification is based, unless the modification is required by law, court order, or the
commission. Within the sixty day notice period the licensee may file with the commission
a complaint for a determination whether there is good cause for permitting the proposed
modification. The party seeking to modify or replace an agreement shall demonstrate by a
preponderance of the evidence that there is good cause for the modification or replacement.
The commission shall schedule a hearing within sixty days to decide the matter. Multiple
complaints pertaining to the same proposed modifications shall be consolidated for hearing.
The proposed modification may not take effect pending the determination of the matter.
(b) In making a determination of whether there is good cause for permitting a
proposed modification, the commission may consider any relevant factor including:
(i) The reasons for the proposed modification.
(ii) Whether the proposed modification is applied to or affects all licensees in a
(iii) The degree to which the proposed modification will have a substantial and
adverse effect upon the licensee's investment or return on investment.
(iv) Whether the proposed modification is in the public interest.
(v) The degree to which the proposed modification is necessary to the orderly and
profitable distribution of vehicles and other services by the licensee.
(vi) Whether the proposed modification is offset by other modifications beneficial
to the licensee.
(c) The decision of the commission shall be in writing and shall contain findings of
fact and a determination of whether there is good cause for permitting the proposed
modification. The commission shall deliver copies of the decision to the parties personally
or by registered mail.
(7) For any employee of a licensee while acting in the scope of his employment, to
accept any payment, commission, fee, or compensation of any kind from any person other
than the employing licensee, unless such payment is fully disclosed to and approved by the
B. The provisions of this Section shall not apply to a dealer, manufacturer,
distributor, wholesaler, distributor branch, factory branch, or convertor of marine products,
motorcycles or all-terrain vehicles, or recreational vehicles, or any officer, agent, or other
Acts 1999, No. 1084, §1; Acts 2005, No. 121, §1; Acts 2005, No. 500, §1, eff. July
12, 2005; Acts 2007, No. 27, §1, eff. June 18, 2007; Acts 2007, No. 170, §1, eff. June 27,
2007; Acts 2008, No. 415, §2, eff. Jan. 1, 2009; Acts 2008, No. 483, §1; Acts 2009, No. 403,
§1, eff. July 7, 2009; Acts 2010, No. 1036, §1; Acts 2011, No. 89, §1; Acts 2012, No. 150,
§1; Acts 2012, No. 326, §1; Acts 2013, No. 61, §1; Acts 2014, No. 770, §1; Acts 2015, No.
170, §1; Acts 2015, No. 435, §1; Acts 2016, No. 530, §1; Acts 2017, No. 45, §1, eff. June