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Form #807Additional Provisions to the the Dealer Sales and Service Agreement
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The following Additional Provisions are part of the "Dealer Sales and Service Agreement." - Free Legal Form
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Additional provisions.
Additional
Provisions
The following Additional Provisions are
part of the "Dealer Sales and Service Agreement."
ARTICLE
I.
SALES TO
DEALER
A. Sales of Motor Vehicles to Dealer
(1). Motor Vehicle Addendum
Division has furnished Dealer a Motor Vehicle Addendum
specifying the current model types or series of new motor vehicles which Dealer
may order (such motor vehicles and all past Manufacturer motor vehicles
marketed through Motor Vehicle Dealers are here called Motor Vehicles).
Division may change the Motor Vehicle Addendum by furnishing Dealer a
superseding Motor Vehicle Addendum.
(2). Processing of Dealer's Orders
Orders for new Motor Vehicles will be submitted and
processed in accordance with procedures established by Division.
Division will endeavor to distribute new Motor
Vehicles among authorized dealers in a fair and equitable manner and will
provide to Dealer an explanation of the method used to distribute Motor
Vehicles. Upon written request, Division will advise Dealer of the total number
of new Motor Vehicles, by series, sold to Motor Vehicle Dealers in Dealer's
Zone during the preceding month.
There are numerous factors which affect the
availability of new Motor Vehicles to Division and their distribution to
dealers. Among those factors are component availability and production
capacity, varying consumer demand, weather and transportation conditions, and
government regulations such as emissions control, noise and fuel economy
requirements. Since all such factors affect individual dealer orders, Division
necessarily reserves to itself discretion in accepting orders and distributing
products, and its judgment and decisions in such matters shall be final.
Dealer's orders for new Motor Vehicles are not binding
on Dealer or Division until accepted by Division and may be canceled by Dealer
until that time. Orders are accepted by Division when released to production.
Orders for Motor Vehicles that have limited
marketability because they differ from Division's standard specifications or
incorporate special equipment (Special Vehicles), however, may not be canceled
without Division's agreement.
Manufacturer may install any equipment or accessories
required by law on any Motor Vehicle ordered by Dealer whether or not such
items are included in Dealer's order.
(3). Prices and Other Terms of Sale
Prices, destination charges and other terms of sale
applicable to purchases of new Motor Vehicles will be those established in
accordance with the Vehicle Terms of Sale Bulletin furnished Dealer by
Division.
Prices, destination charges and other terms of sale
applicable to any Motor Vehicle may be changed at any time. Except as otherwise
provided by Manufacturer in writing, such changes will apply to Motor Vehicles
not shipped at the time such changes are made effective.
Except with respect to the establishment of initial
prices for a new model year or for any new model or body type, Division will
give written notice to Dealer of any price increase before shipping any Motor
Vehicle to which such increase applies. Dealer may cancel or modify the
affected orders by delivering a written notice to Division within _________
days after receipt of such notice.
(4). Motor Vehicle Production and Delivery
Manufacturer will select the production and shipping
locations and the modes of transportation for delivery of Motor Vehicles to
Dealer and will be responsible to carriers for all charges.
Manufacturer will deliver Motor Vehicles to Dealer's
principal dealership location unless Manufacturer decides that another delivery
point is necessary.
Dealer's claims for loss or damage to Motor Vehicles
while in the possession of a carrier must be submitted to Manufacturer in
accordance with the provisions of the Service Policies and Procedures Manual.
(5). Option to Repurchase Damaged Motor Vehicles
Dealer agrees to notify Manufacturer if any new and
unused Motor Vehicle(s) in Dealer's possession should for any reason be
substantially damaged. Manufacturer shall have the option to repurchase all or
any of such Motor Vehicles at a price equal to their net purchase price paid to
Manufacturer. Dealer agrees to assign its rights under any insurance contract
related to the repurchased vehicles to Manufacturer. Manufacturer shall make
appropriate payment for repurchased vehicles directly to any lien holder.
B. Sale of Parts and Accessories to Dealer
(1). Purchase Sources
New or remanufactured automotive parts and accessories
marketed by Manufacturer and listed in current Price Schedules or supplements
furnished to Dealer are called Parts and Accessories. Sales of such Parts and
Accessories will be made either by Manufacturer Parts Division of Manufacturer
(Manufacturer Parts) or through other outlets designated by Manufacturer.
(2). Processing of Dealer's Orders
Orders for Parts and Accessories will be submitted and
processed in accordance with procedures established by Manufacturer Parts or
the other designated outlets.
(3). Prices and Other Terms of Sale
Prices and other terms of sale applicable to Parts and
Accessories marketed by Manufacturer Parts will be those established in
accordance with the Parts and Accessories Terms of Sale Bulletin furnished
Dealer by Manufacturer Parts. Terms of sale applicable to other Parts and
Accessories will be those established by the seller.
Prices and other terms of sale applicable to Parts and
Accessories may be changed at any time. Such changes will apply to Parts and
Accessories not shipped at the time such changes are made effective.
C. Warranties on Products
Manufacturer warrants new Motor Vehicles and Parts and
Accessories (Products) to retail owners as set forth in documents containing
those warranties that are provided with the Products or as set forth in the
Service Policies and Procedures Manual.
Except as otherwise provided by law, the written
Manufacturer warranties are the only warranties applicable to new Products.
With respect to dealers, such warranties are in lieu of all other warranties or
liabilities, express or implied, including any implied warranty of
merchantability or fitness for a particular purpose or any liability for
commercial losses based upon negligence or manufacturer's strict liability.
Except as may be provided under an established Manufacturer program or
procedure, Manufacturer neither assumes nor authorizes anyone to assume for it
any other obligation or liability in connection with Products, and Manufacturer
maximum liability is to repair or replace the Product.
D. Excusable Delay or Failure to Fill Orders or Accept
Shipments
Dealer will not be liable for any delay or failure to
accept delivery and Manufacturer will not be liable for any delay or failure to
deliver Products where such delay or failure is caused, in whole or in part,
by:
(1) any strike or labor trouble in Dealer's
establishment or in the plants of Manufacturer or its suppliers;
(2) any shortage or curtailment of utilities,
materials, transportation or labor or any shortage or damage to productive
facilities;
(3) any act of government, including the enactment of
laws or regulations or issuance of judicial or administrative injunctions or
orders;
(4) any curtailment of production due to economic
conditions; or any discontinuance of manufacture or sale by Manufacturer;
(5) any cause beyond the control of Dealer or
Manufacturer.
If any Products ordered by Dealer are diverted or
returned because of Dealer's unexcused delay or failure to accept delivery,
Dealer will pay any additional costs incurred by Manufacturer as a result of such
diversion.
E. Discontinuance of and Changes in Products
Manufacturer may discontinue any line of Product, or
change the design or specifications of any Product or item of optional
equipment at any time without notice and without incurring any obligation to
Dealer.
ARTICLE
II.
DEALERSHIP
OPERATIONS
A. Responsibility of Dealer Operator
It is the responsibility of each Dealer Operator to
provide personal services by exercising managerial authority for Dealer's
conduct of the operations contemplated by this Agreement (Dealership
Operations). Dealership Operations include the sale and service of Products and
any other activities undertaken by Dealer related to Products, including rental
and leasing operations, used car sales and body shop operations and finance and
insurance operations whether conducted directly or indirectly by Dealer.
Dealer's success is dependent upon its effectiveness
in selling and servicing Motor Vehicles and in conducting all the related
activities which comprise Dealership Operations. Such effectiveness is
ultimately dependent upon the Dealer Operator, who must assume full and
complete managerial authority and responsibility for all Dealership Operations
and who should be a competent business person, an effective manager and an
experienced merchandiser of automotive products and service.
B. Dealership Location and Premises
(1). Responsibility of Dealer
Dealer shall
provide facilities (Dealership Premises) at the Dealership Location that will
enable Dealer to effectively perform and conduct its Dealership Operations. The
Dealership Premises shall be satisfactory as to appearance and layout, properly
equipped for the conduct of the Dealership Operations and substantially in
accordance with the recommended space guides set forth
in the Dealership Location and Premises Addendum. The space guides will be
based on the planning potential established by Manufacturer for Dealer as
revised from time to time.
Dealer will conduct the Dealership Operations only
from the location (Dealership Location) approved for that purpose by
Manufacturer and will not, either directly or indirectly, establish any place
of business for the conduct of any of its Dealership Operations except at the
Dealership Location.
If the Dealership Premises are not all at the same
location, Dealer shall not utilize any separate portion of the Dealership
Premises for the conduct of any Dealership Operations other than as specified
in the current Dealership Location and Premises Addendum. The Dealership
Location and Premises Addendum will also describe any other purposes for which
the Dealership Premises are used and the actual space devoted for such purposes.
(2). Changes
If Dealer desires to make any changes in the
Dealership Location or in the uses or purposes of any of the Dealership
Premises, Dealer agrees to give Manufacturer prior written notice so
Manufacturer can discuss the effect of the proposed change with Dealer. No
change in Dealership Location or in the use of Dealership Premises in
Dealership Operations will be made without the written approval of
Manufacturer.
Any changes in the Dealership Location or Dealership
Premises or their use in Dealership Operations agreed upon by Dealer and
Manufacturer and changes made by Manufacturer in space guides shall be
reflected in a new Dealership Location and Premises Addendum or a separate
written agreement executed by Dealer and Manufacturer.
(3). Signs
Dealer will install and maintain in appropriate places
at the Dealership Premises product and service signs approved by Manufacturer,
and such other signs as Manufacturer and Dealer agree are appropriate to
advertise the Dealership Operations.
C. Sales Performance
(1). Responsibility of Dealer
Dealer is responsible for.
(a). actively and effectively selling and, if Dealer
elects, renting and leasing new Motor Vehicles to customers of Dealer; and
(b). actively and effectively promoting, through
Dealer's own advertising and sales promotion activities, the purchase and use
of new Motor Vehicles by customers located in Dealer's Area of Primary
Responsibility.
Division will advise Dealer in writing of its Area of
Primary Responsibility.
(2). Sales Operations and Activities of Dealer
In furtherance of the objectives of this Agreement,
Dealer agrees to:
(a) maintain an adequate force of trained sales
personnel;
(b) maintain a high standard of ethical advertising
and sales activities in promoting its Dealership Operations;
(c) explain to Product purchasers the items which make
up the purchase price, and give them itemized invoices and any other
information required by law;
(d) refrain from making any misleading statements
concerning the nature or amount of items making up the total selling price of a
Motor Vehicle, including destination or other charges paid to Manufacturer.
(e) refrain from charging customers for any services
for which Dealer is reimbursed by Manufacturer such as for pre-delivery
inspections and adjustments, without disclosing the Manufacturer reimbursement;
and
(f) refrain from including in any customer order
equipment or accessories not requested by the customer unless such item is
required by law.
If Dealer installs on a Motor Vehicle any equipment,
accessory or part that has not been supplied by Manufacturer, Dealer will
disclose this fact to the purchaser and will advise the purchaser that the item
is not included in warranties furnished by Manufacturer. Dealer will write such
disclosure on the purchase order if the purchaser is to sign the order. In all
cases, the purchaser's bill of sale or receipt will include such disclosure.
Dealer will clearly explain to the purchaser the extent of the warranty given
by the manufacturer of any such equipment, accessory, or part and will deliver
a copy of such warranty, if in writing, to the purchaser.
(3). Evaluation of Dealer's Sales Performance
Sales evaluation reports prepared by Division will be
furnished to and discussed with Dealer at least annually so that Dealer may
take prompt action if necessary to achieve satisfactory sales performance. Any
written comments on a sales evaluation report received from Dealer will become
a part of the report.
Dealer's sales performance will be evaluated by
Division on the basis of:
(a) Registration effectiveness—The relationship of
registrations of new Motor Vehicles in Dealer's Area of Primary Responsibility
to the number of registrations necessary to achieve a registration level
comparable to Zone and national new Motor Vehicle registration levels; and
(b) Sales effectiveness—The relationship of Dealer's
actual sales of new Motor Vehicles to the number of sales necessary to achieve
a registration level in Dealer's Area of Primary Responsibility comparable to
Zone and national new Motor Vehicle registration levels.
If Dealer's Area of Primary Responsibility is the same
as that of other Motor Vehicle Dealers, Dealer's evaluation will be made on the
basis of Dealer's standard of participation in such Area as established by
Division.
In addition, the sales evaluation report will consider
other relevant factors including:
the trend over a reasonable period of time of Dealer's
sales performance;
the manner in which Dealer has conducted the sales
operations, including advertising, sales promotion and treatment of purchasers;
sales to fleet customers if they have affected
registrations;
the manner in which Dealer has submitted orders for
new Motor Vehicles to Division;
the availability of new Motor Vehicles to Dealer; and
significant local conditions that may have directly
affected Dealer's performance.
If in some cases relevant information, such as
registration data, is not available, Division may rely on other data which it
believes most reasonably depict the volume of retail purchases of new motor
vehicles by customers located in the Area of Primary Responsibility.
D. Service Performance
(1). Responsibility of Dealer
Dealer agrees to provide prompt, efficient, courteous
and quality service to owners and users of Motor Vehicles, when requested,
regardless of where the vehicles were purchased. All service will be performed
in a workmanlike manner and in accordance with the Service Policies and
Procedures Manual as amended from time to time by Division in writing. Dealer's
service obligations include the following:
(a). New Motor Vehicle Pre-Delivery Inspections and
Adjustments
Pre-delivery inspections and adjustments will be
performed by Dealer on each new Motor Vehicle prior to delivery. The completion
of inspections and adjustments on each new Motor Vehicle will be verified on
forms provided by Division, one copy of which will be retained in Dealer's file
and a second copy of which will be furnished to the purchaser.
Any required campaign inspections and corrections will
also be made at time of pre-delivery service.
(b). Warranty Repairs and Special Policy Adjustments
Dealer will perform (i) required warranty repairs on each
qualified Motor Vehicle at the time of pre-delivery service and when requested
by the owner, and (ii) special policy adjustments that are approved by
Division. Dealer will provide each owner for whom repairs or adjustments are
performed a copy of the repair order reflecting all services performed.
(c). Campaign Inspections and Corrections
Campaign inspections and corrections may be directed
by Division to find and correct suspected unsatisfactory conditions, including
conditions affected by safety, emissions, noise and fuel economy regulations.
Dealer will perform campaign inspections and corrections on Products that
qualify. Dealer will also determine whether campaign inspections and
corrections have been made on used Manufacturer motor vehicles in its inventory
and arrange for their performance, if necessary, prior to resale of the used
vehicle.
Parts and other materials required for product
campaigns may be shipped to Dealer without Dealer's authorization and will be
accepted by Dealer. Upon completion of the campaign, Dealer will receive credit
for any excess Parts and materials so shipped provided they are returned or
disposed of in accordance with Division's instructions.
(d). Other Manufacturer Vehicles
Dealer may provide warranty repairs, special policy
adjustments, and campaign inspections and corrections for Manufacturer motor
vehicles that are not included in Dealer's Motor Vehicle Addendum if
Manufacturer requests Dealer to do so in writing and if Dealer has the
necessary equipment and qualified service personnel.
(2). Payment for Pre-Delivery, Warranty and Campaign
Work
For Dealer's performance of pre-delivery inspections
and adjustments, warranty repairs, special policy adjustments, and campaign
inspections and corrections, Division will either provide or pay Dealer for the
Parts and other materials required and will pay Dealer a fair and adequate
amount for labor. Payment will be made in accordance with the Service Policies
and Procedures Manual and Dealer shall not impose any charge for such service
on retail customers.
Dealer will comply with the disposition instructions
in the Service Policies and Procedures Manual with respect to defective Parts
acquired by Dealer as a result of its performance of warranty repairs, special
policy adjustments and campaign inspections and corrections.
(3). Service Operations of Dealer
(a). Service and Parts Organization
Dealer will
maintain a service and parts organization substantially in accordance with the
recommendations of Division and Manufacturer Parts which will include a
competent, trained service and
parts manager(s), trained service and parts personnel,
and where service volume or other conditions make it advisable, a consumer
relations manager.
(b). Service Equipment and Special and Essential Tools
Dealer will provide adequate service equipment and
such special and essential tools as are required by Dealer to fulfill its
responsibilities for service in accordance with the recommendations of
Division.
(c). Inventory of Parts and Accessories
Dealer will stock sufficient Parts and Accessories to
meet customer demand and to perform warranty repairs and special policy
adjustments.
(d). Representations and Disclosures as to Parts and
Accessories
Dealer and Division recognize that owners and users of
Motor Vehicles may reasonably expect that parts and accessories sold at retail
or used by Dealer in servicing vehicles are Parts and Accessories marketed by
Manufacturer. Dealer will not represent non-Manufacturer parts or accessories
as Parts or Accessories marketed by Manufacturer.
In order to avoid confusion and minimize potential
customer dissatisfaction in any case where parts or accessories that are not
marketed by Manufacturer may be sold or used by Dealer, Dealer will clearly
explain to its customer the extent of the warranty given by the manufacturer of
the parts or accessories and will deliver a copy of the warranty, if in
writing, to the owner or user.
(e). Compliance With Government Regulations
Dealer and Manufacturer will each provide the other
with such information and assistance as may reasonably be requested by the
other to facilitate compliance with government laws, regulations and orders
relating to Products including laws, regulations and orders relating to fuel
economy, safety, emissions, noise and damageability.
(4). Consumer Relations Programs and Procedures
Dealer will endeavor to build and maintain consumer
confidence in Dealer and Manufacturer. Dealer will comply with procedures
developed by Division for the investigation and handling of complaints relating
to Motor Vehicles.
(5). Evaluation of Dealer's Service Performance
Dealer's performance of its responsibilities for
service in areas such as consumer satisfaction, premises, service management
and operating procedures, personnel, new vehicle pre-delivery service, parts
operation, and shop tools and equipment will be evaluated by Manufacturer at
least annually. Service evaluation reports will be furnished to and discussed
with Dealer so that Dealer may take prompt action if necessary to achieve
satisfactory service performance. Any written comments on a report received
from Dealer will become a part of the report.
E. Assistance Provided by Manufacturer
(1). Training
Manufacturer will make available to Dealer general and
specialized sales, service and parts training courses for Dealer personnel.
Dealer agrees to have members of its organization attend such courses according
to their needs. Manufacturer shall not be responsible for any compensation payable
to Dealer's personnel while attending such courses or for related travel and
living costs.
(2). Service and Parts Manuals and Materials
Manufacturer will make copies of its current service
and parts manuals, bulletins, and technical data publications relating to Motor
Vehicles available to Dealer.
(3). Field Personnel
Manufacturer will maintain field personnel to advise
and counsel Dealer personnel on sales, service, parts and accessories and
related subjects, including inventory control, owner complaints, technical
service problems, service and parts merchandising, personnel training, and
service and parts management.
(4). Advertising and Sales Promotion Materials
Manufacturer will conduct general advertising programs
to promote the sale of Motor Vehicles for the mutual benefit of Manufacturer
and authorized dealers.
Manufacturer will make available to Dealer advertising
and sales promotion materials from time to time and will inform Dealer of any
applicable charges.
(5). Facility Planning
Manufacturer representatives will be available to
counsel Dealer on planning and equipping the Dealership Premises and will make
available building layout plans, facility planning recommendations and
recommendations on the location, installation and maintenance of signs.
F. Capital Standards
The Capital Standard Addendum reflects the agreed upon
minimum net working capital necessary to conduct the Dealership Operations
based on Manufacturer guidelines. Dealer and Manufacturer will execute a new
Addendum if changes in operating conditions or Manufacturer guidelines indicate
capital needs have changed materially.
G. Accounts, Records, Estimates and Reports
(1). Uniform Accounting System
Manufacturer utilizes operating information provided
by dealers to develop composite operating statistics useful to dealers and
Manufacturer in business management and to assess the impact of Manufacturer
policies and practices on dealers generally. To assure information provided by
Dealer is accurate and based upon common accounting principles, Dealer will
maintain a uniform accounting system in accordance with the accounting manual
provided by Manufacturer. Dealer will furnish to Manufacturer by the _________
of each month and in a manner established by Manufacturer, complete and
accurate financial and related supporting data.
(2). Management and Ownership Information
Dealer will maintain accurate records reflecting the
owners and managers of Dealer and will provide a new Dealer Statement of
Ownership upon request by Manufacturer. Receipt of such Statement by
Manufacturer shall not constitute approval of any unauthorized change in
ownership that may be reflected in such Statement.
(3). Sales and Service Records
It is the
responsibility of Dealer to maintain complete and up-to-date records covering
its sales and service of Motor Vehicles, including records in support of fleet
and retail orders, applications for any payment or credit by
Manufacturer and transportation claims. Such records
will be prepared and maintained in accordance with Manufacturer policies and
procedures and will be retained for at least _________ years.
(4). Sales Estimates and Reports
Estimates of Dealer's new Motor Vehicle requirements
will be furnished by Dealer for such periods as requested by Manufacturer.
Dealer will also furnish Manufacturer with accurate
information covering Dealer's new Motor Vehicle sales or transfers to other
dealers. The information shall be furnished in a manner prescribed by
Manufacturer and in the form and within the times specified by Manufacturer.
(5). Examination of Accounts and Records
Any designated representative of Manufacturer is
authorized to examine, audit, reproduce and take copies of any of the accounts
and records required to be maintained by Dealer under this Agreement.
Examinations and audits must be conducted during regular business hours. Dealer
will be furnished a list of any reproduced records.
(6). Confidentiality of Dealer Data
Manufacturer will not furnish any data submitted to it
by Dealer to any third party unless authorized by Dealer or required by law or
unless pertinent to judicial or government administrative proceedings or to
proceedings before the Manufacturer Dealer Relations Umpire.
H. Trademarks and Service Marks
(1). Exclusive Ownership
Manufacturer or its affiliated companies are the
exclusive owners of the various trademarks, service marks, names, and designs
(Marks) which they use in connection with Products.
(2). Use by Dealer
Dealer is granted the non-exclusive right of
displaying the foregoing Marks in the conduct of its Dealership Operations,
except that Marks related to used motor vehicle operations can be used only if
Dealer fulfills the requirements of programs relating to them established by
Manufacturer.
The foregoing Marks may be used as part of the name
under which Dealer's business is conducted only with the express written
approval of Manufacturer.
Dealer will change or discontinue the use of any
Manufacturer mark upon request.
No company owned by or affiliated with Dealer or any
of its owners may use any Manufacturer mark or product name without
Manufacturer's written permission.
(3). Discontinuance of Use Upon Termination
Upon termination of this Agreement, Dealer will
immediately discontinue or cause to be discontinued, at its expense, all use of
Marks. Thereafter, Dealer will not use, either directly or indirectly, any
Manufacturer marks or any other confusingly similar marks in a manner likely to
cause confusion or mistake or to deceive the public. Failure of Manufacturer
and Dealer to complete the purchase of signs as provided in this Agreement will
not relieve Dealer of its obligation to discontinue the use of Manufacturer
marks on the signs.
(4). Dealer's Liability for Failure to Discontinue Use
Dealer will reimburse Manufacturer for all legal fees
and other expenses incurred in connection with legal action to require Dealer
to comply with this Section.
I. Establishment of Additional Dealers
Division reserves the right to appoint additional
Motor Vehicle Dealers. This right will not be exercised without making a survey
of marketing factors in the area of a possible new dealership location.
Division will notify Dealer when it undertakes a
survey which may result in the addition of a new Motor Vehicle Dealer within
Dealer's Area of Primary Responsibility and will give Dealer an opportunity to
present information relevant to the survey. If Division tentatively decides
that the results of a survey warrant establishing an additional dealer in such
area, Division will advise Dealer in writing and give Dealer _________ days to
present further relevant information before a final decision is made.
Notwithstanding any other provision of this Agreement,
the final decision whether to establish an additional dealer shall be made by
Division solely pursuant to its own business judgment and nothing in this
Agreement shall be construed to require Dealer's consent to the establishment
of an additional dealer.
ARTICLE
III.
SUCCESSOR
AND REPLACEMENT DEALERS
A. Rights of Manufacturer
(1). Selection of Dealers
The parties recognize that Motor Vehicles are marketed
through a system of authorized dealers developed by Manufacturer and that
customers and authorized dealers, as well as shareholders and employees of
Manufacturer, have a vital interest in the preservation and efficient operation
of the system. Manufacturer has the responsibility of continuing to administer
the system and selecting the most suitable dealer candidate in each
circumstance.
Accordingly, Manufacturer has the right to select each
successor and replacement dealer and to approve its owners and principal
management and the location of its dealership facilities. Manufacturer shall
perform such responsibility as set forth in Paragraph _________ on the basis of
evaluating each candidate's qualifications and proposal for the conduct of
dealership operations against the standards set forth in this Agreement.
(2). Review of Applications
In selecting replacement dealers, Manufacturer may
process applications for a replacement dealer agreement, and may consult with
applicants on any aspect of their proposals or Manufacturer requirements, at
any time after a notice of termination or expiration has been served or Dealer
has proposed a sale of assets or change of ownership or management. Any such
replacement dealer agreement shall not become effective prior to the effective
date of termination or expiration of this Agreement.
B. Succession Rights Upon Death or Incapacity
(1). Manufacturer Obligations
Manufacturer will give first consideration to, and
will not arbitrarily refuse to accept, a proposal to establish a successor
dealer submitted by a proposed dealer operator under this Section B provided:
(a) the proposed successor dealer and the proposed
dealer operator are ready, willing and able to comply at an approved location
with the requirements of a new dealer agreement;
(b) General Motors approves all proposed owners and
principal managers not previously approved in connection with the existing
Dealership Operations;
(c) the proposed dealer operator will own an
unencumbered ownership interest of at least _________ percent in the proposed
dealer and will not actively participate in the management of any other
dealership; and
(d) an agreement(s) acceptable to Manufacturer has
been executed between the proposed dealer operator and all proposed owners
providing that he or she shall have the right to acquire complete ownership of
the proposed dealer within _________ years.
(2). Rights of Remaining Dealer Operators
If this Agreement expires or is terminated because of
death or incapacity and Dealer and Manufacturer have not executed a Successor
Addendum, the remaining Dealer Operator(s) may propose a successor dealer
entity to continue the Dealership Operations at the Dealership Location. The
proposal must be made at least one month prior to the expiration or termination
of this Agreement by submitting a written proposal to Manufacturer naming a
remaining Dealer Operator as the dealer operator.
The proposal will be accepted by Manufacturer if it
does not introduce new owners or if any proposed new owners are acceptable to
Manufacturer.
(3). Rights Under Successor Addendum
Upon request, Manufacturer will execute with Dealer a
Successor Addendum designating proposed dealer operators or owners of a
successor dealer to be established if this Agreement expires or is terminated
because of death or incapacity. The request must be executed by all owners and
Dealer Operators and be submitted on Manufacturer forms prior to such death or
incapacity.
To be named in the Successor Addendum, a proposed
dealer operator must be either a Dealer Operator of Dealer or a person who is
and will continue to be employed on a full time basis by, and is being trained
to assume a management position with, Dealer or a comparable automotive
dealership. Any other proposed owner must be acceptable to Manufacturer.
(4). Term of New Dealer Agreement
The term of the dealer agreement offered a successor
dealer will be _________ years if the dealer operator in the successor dealer
is currently a dealer operator of a Motor Vehicle Dealer.
In all other cases the successor dealer will be
offered a _________ year agreement, and the successor provisions of this
Section B will not apply to that agreement. Manufacturer will notify the
successor dealer in writing at least _________ months prior to the expiration
of the _________ year term whether the successor dealer and its dealer operator
have performed satisfactorily, and, if so, that Manufacturer will offer the successor
dealer a regular dealer agreement.
(5). Limitation on Offers
If Manufacturer plans to relocate Dealer to another
location, Manufacturer may offer a new dealer agreement to the proposed
successor dealer, subject to the condition that its dealership operations will
be relocated within a reasonable time to another dealership location and
acceptable dealership premises as approved by Manufacturer.
Manufacturer offer of a new dealer agreement made
pursuant to this Section B will automatically expire if not accepted by the
successor dealer within _________ month after it receives the offer.
(6). New Successor Addendum
Dealer, but not Manufacturer, may cancel an executed
Successor Addendum. The parties may execute a new and superseding Successor
Addendum by mutual agreement. If Manufacturer notifies Dealer that it does not
plan to continue dealership operations at the Dealership Location, Manufacturer
shall have no obligation to execute a new Successor Addendum. No Successor
Addendum may be canceled, however, after the death of any party named in
Paragraph _________ of this Agreement.
C. Other Changes in Management and Ownership or Sale
of Assets
In order for Manufacturer to effectively perform its
responsibility to administer the authorized dealer system, Dealer agrees in
Paragraph _________ to give Manufacturer prior written notice of any proposed
change in its Dealer Operator(s) or ownership or any proposed disposition of
its principal assets. In turn, Manufacturer agrees to consider Dealer's
proposal under the standards identified in Paragraph _________ and not to
arbitrarily refuse to agree to such proposal. In determining whether the
proposal is acceptable to it, Manufacturer will take into account the
qualifications, personal and business reputation and financial standing of the
proposed dealer operator and owners, as well as Manufacturer interest in
promoting and preserving competition among Manufacturer dealerships, and
between those dealerships and dealerships representing competing motor vehicle
manufacturers.
Dealer shall be notified in writing of Manufacturer
agreement or disagreement to Dealer's proposal within _________ days after
Dealer has furnished all applications and information reasonably requested by
Manufacturer to evaluate such proposals. Manufacturer decision may be reviewed
under the Manufacturer Dealer Relations Umpire Plan. Dealer acknowledges that
the occurrence of any such change or disposition without prior written
agreement by Manufacturer is cause for termination of this Dealer Agreement.
Any material change in Dealer's proposal, including
any change in price or in proposed ownership or management of a replacement
dealer, shall be treated as a new proposal for purposes of this and the
following Section D.
D. Manufacturer's Right of First Refusal or Option to
Purchase
1. Creation and Coverage
If a proposal by Dealer is not accepted by
Manufacturer under Section C, Manufacturer shall have a right of first refusal
or option to purchase the dealership assets under this Section D in addition to
whatever other rights the parties may have under this Agreement. If
Manufacturer chooses to exercise its right or option, it must do so in its
written notice of disagreement with Dealer's proposal. Such exercise shall be
null and void if Dealer withdraws its proposal within _________ days following
its receipt of Manufacturer written notice exercising its right or option.
After being exercised, Manufacturer's right or option may be assigned to any
party Manufacturer selects as a replacement dealer and Manufacturer agrees to
guarantee the full payment of the purchase price by such assignee.
If Dealer has entered into a bona fide written
buy/sell agreement respecting its dealership business or this Agreement,
Manufacturer's right under this Section shall be a right of first refusal,
enabling Manufacturer to assume the buyer's rights and obligations under such
buy/sell agreement. In the absence of a bona fide written buy/sell agreement,
Manufacturer shall have the option under this Section to purchase the principal
assets of Dealer utilized in the Dealership Operations, including real estate
and leasehold interests, and to cancel this agreement and all rights granted
Dealer under this agreement. If the Dealership Premises are leased by Dealer
from an affiliated company, the right to purchase the principal assets of
Dealer shall include the right to lease the Dealership Premises to the extent
such a lease to a third party is contemplated.
2. Purchase Price and Other Terms of Sale
If Dealer
has entered into a bona fide written buy/sell agreement, the purchase price and
other terms of sale shall be those set forth in such agreement and any related
documents. Manufacturer may request and Dealer
agrees to provide all other documents relating to the
proposed transfer, including, but not limited to, those reflecting any other
agreements or understandings between the parties to the buy/sell agreement. If
Dealer refuses either to provide such documentation or to state in writing that
no such documents exist, it shall be presumed that the agreement is not bona
fide.
In the absence of a bona fide written buy/sell
agreement, the purchase price of the dealership assets shall be their fair
market value as a going concern as negotiated by the parties and the other
terms of sale shall be those agreed by the parties or prevailing in the area of
the Dealership Premises. If the parties are unable to reach a negotiated
settlement in a reasonable time, the price and other terms of sale shall be
established by arbitration in accordance with the rules of the American
Arbitration Association.
Dealer shall transfer the affected property by
Warranty Deed conveying marketable title free and clear of liens, claims,
mortgages, encumbrances, tenancies and occupancies. The Warranty Deed shall be
in proper form for recording and Dealer shall deliver complete possession of
the property at the time of delivery of the Deed. Dealer shall also furnish to
Manufacturer copies of any easements, licenses or other documents affecting the
property and shall assign any permits or licenses which are necessary for the
conduct of the Dealership Operations.
Dealer agrees not to complete any proposed change or
sale prior to the expiration of the period for exercise of Manufacturer's right
or option. Manufacturer's rights under this Section shall be binding on and
enforceable against any assignee or successor in interest of Dealer or
purchaser of Dealer's assets.
ARTICLE
IV.
TERMINATION
A. Termination of Agreement
(1). Termination by Dealer
Dealer may terminate this Agreement by written notice
to Manufacturer. Termination will be effective _________ month(s) after
Manufacturer's receipt of the notice unless otherwise mutually agreed in
writing.
(2). Termination Due to Certain Acts or Events
Each of the following represents an act or event that
is within the control of Dealer or originates from action taken by Dealer or
its management or owners and which is so contrary to the spirit and objectives
of this Agreement as to warrant its termination:
(a). The removal, resignation, withdrawal or
elimination from Dealer for any reason of any Dealer Operator or Dealer Owner
without the prior written approval of Manufacturer.
(b). Any misrepresentation to Manufacturer by Dealer
or by any Dealer Operator or owner in applying for this Agreement or as to the
record or beneficial ownership or management of Dealer.
(c). Any attempted or actual sale, transfer or
assignment by Dealer of this Agreement or any of the rights granted Dealer
under this agreement, or any attempted or actual transfer, assignment or
delegation by Dealer of any of the responsibilities assumed by it under this
Agreement without the prior written approval of Manufacturer.
(d). Any change, whether voluntary or involuntary, in
the principal management or in the record or beneficial ownership of Dealer as
set forth in the Dealer Statement of Ownership furnished by Dealer without the
prior written approval of Manufacturer.
(e). Any undertaking by Dealer or any of its owners to
conduct, either directly or indirectly, any of the Dealership Operations at any
unapproved location.
(f). Any sale or other transfer, by operation of law
or otherwise, or any relinquishment or discontinuance of use by Dealer, of any
of the Dealership Premises or other principal assets required in the conduct of
the Dealership Operations, without the prior written approval of Manufacturer.
(g). Any dispute or disagreement between or among the
owners or management personnel of Dealer which, in the opinion of Manufacturer,
may adversely affect the Dealership Operations or the interests of Dealer or
Manufacturer.
(h). Insolvency of Dealer; filing of a voluntary
petition in bankruptcy by Dealer; filing of a petition to have Dealer declared
bankrupt or appointment of a receiver or trustee for Dealer, provided such
filing or appointment is not vacated within _________ month(s); or execution by
Dealer of an assignment for the benefit of creditors or any foreclosure or
other due process of law where a third party acquires rights to the operation,
ownership or assets of Dealer.
(i). Failure of Dealer to conduct its customary sales
and service operations during its customary business hours for _________
consecutive business days.
(j). Conviction in a court of original jurisdiction of
Dealer or any Dealer Operator, principal officer, or owner of Dealer of any
crime which is punishable by imprisonment; or any finding by a government
agency or court of original jurisdiction that Dealer had committed any unfair
business practice which, in the opinion of Manufacturer, may adversely affect
the reputation or interests of Dealer or Manufacturer.
(k). Submission by Dealer of false applications or
claims for any payment, credit, discount or allowance or of false orders for
Products or reports of delivery or transfer of Products if such applications,
claims, orders or reports are fraudulent or part of a pattern of false
applications, claims, orders or reports, whether or not Dealer offers or makes
restitution.
(l). Refusal by Dealer to timely furnish sales or
financial information and related supporting data, or to permit Manufacturer to
make an examination or audit of Dealer's accounts and records, provided such failure
or refusal continues after receipt by Dealer from Manufacturer of a written
request for such information or permission.
(m). Willful failure of Dealer to comply with the
provisions of any laws or regulations relating to the sale or service of Products.
When Manufacturer learns that any of the foregoing
acts or events has occurred, Manufacturer will endeavor to discuss it with
Dealer. Thereafter, Manufacturer may terminate this Agreement by giving Dealer
written notice of termination, such termination to be effective upon receipt by
Dealer of such notice or at such later date as may be specified in the notice.
(2). Termination by Manufacturer for Failure of
Performance by Dealer
If Manufacturer determines that Dealer has failed to
provide adequate premises, or to adequately perform its sales or service
responsibilities, Manufacturer will review such failure with Dealer.
As soon as practicable thereafter, Manufacturer will
notify Dealer in writing of the nature of Dealer's failure of performance and
of the period of time (which shall be not less than _________ months) during
which Dealer will be expected to remedy such failure.
If such failure has not been substantially remedied at
the expiration of the period, Manufacturer may terminate this Agreement by
giving Dealer _________ months advance written notice.
(4). Termination Because of Incapacity of Dealer
Operator
Because of the personal service nature of this
Agreement, Manufacturer may terminate this Agreement by written notice to
Dealer if Dealer Operator is so physically or mentally incapacitated that the
Dealer Operator is unable to actively exercise full managerial authority. The
effective date of termination will be stated in such written notice and will be
not less than _________ months after receipt of such notice.
(5). Termination for Failure to be Licensed
If Manufacturer or Dealer fails to secure or maintain
any license required for the performance of its obligations under this
Agreement, or such license is suspended or revoked, irrespective of the cause,
either party may immediately terminate this Agreement by giving the other party
written notice.
(6). Termination by Agreement
This Agreement may be terminated at any time by
written agreement between Manufacturer and Dealer.
The provisions of Article V relating to Termination
Assistance will be applicable only to the extent set forth in the written
termination agreement.
(7). Reliance on Any Applicable Termination Provision
The terminating party may select the termination
provision under which it elects to terminate without reference in its notice of
termination to any other provision that may also be applicable. The terminating
party may also subsequently assert other grounds for termination.
B. Transactions After Termination
(1). Effect of Termination on Orders
If Dealer and Manufacturer do not enter into a new
Dealer Sales and Service Agreement when this Agreement expires or is
terminated, all of Dealer's outstanding orders for Products will be
automatically canceled except as provided in this Section B.
Termination of this Agreement will not release Dealer
or Manufacturer from the obligation to pay any amounts owing the other, nor
release Dealer from the obligation to pay for Special Vehicles if Manufacturer
has begun processing such orders prior to the effective date of termination.
(2). Termination Deliveries
If this Agreement is voluntarily terminated by Dealer
or expires or is terminated because of the death or incapacity of a Dealer
Operator or death of a Dealer Owner, without a termination or expiration
deferral date, Manufacturer will exert its best efforts consistent with its
distribution procedures to furnish Dealer with Motor Vehicles to fill Dealer's
bona fide retail orders on hand on the effective date of termination or
expiration, not to exceed, however, the total number of Motor Vehicles invoiced
to Dealer for retail sale during the _________ months immediately preceding the
effective date of termination.
(3). Effect of Transactions After Termination
Neither Manufacturer sale of Products to Dealer nor
any other act by Manufacturer or Dealer after termination of this Agreement
will be construed as a waiver of the termination.
ARTICLE
V.
TERMINATION
ASSISTANCE
A. Deferral of Effective Date of Expiration or
Termination
If this Agreement is scheduled to expire or terminate
because of the death or incapacity of a Dealer Operator or the death of a
Dealer Owner and Dealer requests an extension of the effective date of
expiration or termination _________ days prior to such date, Manufacturer will
defer the effective date for up to a total of _________ months after such death
or incapacity occurs in order to assist Dealer in winding up its Dealership
Operations.
B. Purchase of Personal Property
(1). Manufacturer Obligation
If this Agreement expires or is terminated by either
party and Manufacturer does not offer Dealer or any replacement dealer that has
substantially the same ownership (including total family ownership) a new
Dealer Sales and Service Agreement, Manufacturer will purchase the following
items of personal property (Eligible Items) from Dealer at the prices
indicated:
(a). New and unused Motor Vehicles of the current
model year purchased by Dealer from Manufacturer, at a price equal to the net
prices and charges that were paid to Manufacturer.
(b). Any signs owned by Dealer of a type recommended
in writing by Manufacturer and bearing any Manufacturer trademarks or service
marks, at a price agreed upon by Manufacturer and Dealer. If Manufacturer and
Dealer cannot agree on a price, they will select a third party who will set the
price.
(c). Any special tools recommended by Manufacturer and
designed specifically for service of any Motor Vehicles that were offered for
sale by Manufacturer during the _________ years preceding termination, at
prices established in accordance with the applicable pricing formula in the
Service Policies and Procedures Manual.
(d). Unused and undamaged Parts and Accessories that
(i) are still in the original, resalable merchandising packages and in unbroken
lots (in the case of sheet metal, a comparable substitute for the original
package may be used); (ii) are listed for sale in the then current Manufacturer
Parts Dealer Parts and Accessories Price Schedules (except Parts and
Accessories listed there as discontinued or replaced Parts and Accessories);
and (iii) were purchased by Dealer either directly from Manufacturer Parts or
from an outgoing authorized dealer as a part of Dealer's initial Parts and
Accessories inventory. The prices for such Parts and Accessories will be
Manufacturer Parts dealer prices in effect at the time such Parts and
Accessories are received by Manufacturer Parts, less any applicable allowances
whether or not any such allowances were made to Dealer when the Parts and Accessories
were purchased by Dealer, plus _________ percent of dealer price for packing
costs and plus reimbursement for transportation charges to the destination
specified by Manufacturer Parts.
(2). Responsibilities of Dealer
Manufacturer obligation to purchase Eligible Items is
subject to Dealer fulfilling its responsibility under this subsection.
Within _________ days following the effective date of
termination or expiration of this Agreement, Dealer will furnish Manufacturer
with a list of vehicle identification numbers and such other information as
Manufacturer may request pertaining to eligible Motor Vehicles to be purchased
by Manufacturer. Dealer will deliver all such eligible Motor Vehicles to a
destination determined by Manufacturer that will be in a reasonable proximity
to Dealer's premises.
Within _________ months following the effective date
of termination or expiration of this Agreement, Dealer will mail or deliver to
Manufacturer, a complete and separate list of each of the Eligible Items other
than Motor Vehicles. Dealer will retain all such Eligible Items until receipt
of written shipping instructions from Manufacturer. Within _________ month
after receipt of instructions, Dealer will ship such Eligible Items, transportation
charges prepaid, to the destinations specified in the instructions.
Dealer will take such action and execute and deliver
such instruments as may be necessary to (a) convey to Manufacturer good and
marketable title to all Eligible Items to be purchased, (b) comply with the
requirements of any applicable state law relating to bulk sales or transfer,
and (c) satisfy and discharge any liens or encumbrances on Eligible Items prior
to their delivery to Manufacturer.
(3). Payment by Manufacturer
Manufacturer will pay Dealer for the Eligible Items
purchased by it as soon as practicable following delivery to the destinations
specified by Manufacturer. Manufacturer may make any payment for such Eligible
Items directly to anyone claiming a security or ownership interest.
If Manufacturer has not paid Dealer the purchase price
of the Eligible Items within _________ months after delivery, Manufacturer
will, at Dealer's written request, estimate the purchase price of the unpaid
Eligible Items and all other amounts owed Dealer by Manufacturer. After
deducting the amounts estimated to be owing Manufacturer by Dealer,
Manufacturer will advance Dealer _________ percent of the net amount owed
Dealer and will pay the balance, if any, as soon as practicable.
(4). Assignment of Rights
If Manufacturer has decided to appoint a replacement
dealer at Dealer's location, Dealer may sell its Eligible Items and, if
approved in writing by Manufacturer, assign its rights under this Section B to
Manufacturer designated replacement dealer provided the replacement dealer
assumes Dealer's obligations under this Section.
C. Assistance on Dealership Premises
(1). Manufacturer Obligation
Manufacturer agrees to give Dealer the assistance
provided by this Section in disposing of the Dealership Premises if (i) this
Agreement expires for any reason or is terminated by Manufacturer under Section
A(3) or A(4) of Article IV, and (ii) Dealer is not offered a new Dealer Sales
and Service Agreement. Such assistance shall be given only on Dealership Premises
that are described in the Dealership Location and Premises Addendum and only if
they are:
(a) used solely for Dealership Operations (or similar
dealership operations with other Manufacturer car or truck Divisions under
agreements which will be terminated simultaneously with this Agreement); and
(b) not substantially in excess of Manufacturer space
guides.
Any Dealer request for such assistance must be in
writing and received by Manufacturer within _________ month of the expiration
or termination of this Agreement.
Premises that consist of more than one parcel of
property or more than one building, each of which is separately usable,
distinct and apart from the whole or any other part with appropriate ingress or
egress, shall be considered separately under this Section.
(2). Owned Dealership Premises
Manufacturer
will provide assistance on owned Dealership Premises by either (a) locating a
purchaser who will offer to purchase the Dealership Premises at a reasonable
price, or (b) locating a lessee who will offer to lease the premises for a
reasonable term at a reasonable rent. If Manufacturer does not locate a
purchaser or
lessee within a reasonable time, Manufacturer will
itself either purchase or, at its option, lease the Dealership Premises for a
reasonable term at a reasonable rent. If the cause of termination or expiration
is a death or the incapacity of the Dealer Operator, however, Manufacturer may
instead pay Dealer a sum equal to a reasonable rent for a period of _________
months immediately following the effective date of termination of this
Agreement.
(3). Leased Dealership Premises
Manufacturer will provide assistance on leased
Dealership Premises by either:
(a) locating a tenant(s), satisfactory to the lessor,
who will sublet for the balance of the lease or assume it; or
(b) arranging with the lessor for the cancelation of
the lease without penalty to Dealer; or
(c) reimbursing Dealer for the lesser of the rent
specified in the lease or settlement agreement or a reasonable rent for a
period equal to the lesser of _________ months from the effective date of
termination or expiration or the balance of the lease term.
Upon request, Dealer will use its best efforts to
effect a settlement of the lease with the lessor subject to Manufacturer's
prior approval of the terms of such settlement. Manufacturer is not obligated
to reimburse Dealer for rent for any month during which the Dealership Premises
are occupied by Dealer or anyone else after the first month following the
effective date of termination or expiration.
(4). Reasonable Rent and Reasonable Price
Manufacturer and Dealer will fix the amount of a
reasonable rent and a reasonable price for the Dealership Premises by agreement
at the time Dealer requests assistance. The factors to be considered in fixing
those amounts are:
(a) the adequacy and desirability of the Dealership
Premises for an authorized Motor Vehicle dealership operation; and
(b) the fair market value of the Dealership Premises.
If Manufacturer and Dealer cannot agree, the fair market value shall be that
determined by the median appraisal of _________ qualified real estate
appraisers, of whom Dealer and Manufacturer shall each select _________ and the
_________ thus selected shall select the _________. The cost of required
appraisals shall be shared equally by Dealer and Manufacturer.
(5). Limitations on Obligation to Provide Assistance
Manufacturer shall not be obligated to provide
assistance on Dealership Premises if Dealer:
(a) fails to accept a bona fide offer from a
prospective purchaser, sublessee or assignee;
(b) refuses to execute a settlement agreement with the
lessor if such agreement would be without cost to Dealer;
(c) refuses to use its best efforts to effect a
settlement when requested by Manufacturer; or
(d) refuses to permit Manufacturer to examine Dealer's
books and records if necessary to verify claims of Dealer under this Section C.
Any amount payable by Manufacturer as rental
reimbursement or reasonable rent shall be proportionately reduced if the
Dealership Premises are leased or sold to another party during the period for
which such amount is payable. Payment of any such rental reimbursement or
reasonable rent shall be waived by Dealer if it does not file its claim within
_________ months after the expiration of the period covered by the payment.
Upon request, Dealer will support its claim with satisfactory evidence of its
accuracy and reasonableness.
ARTICLE
VI.
MANUFACTURER
DEALER RELATIONS UMPIRE PLAN
Manufacturer
has long recognized that mutual respect, trust and confidence are vital to the
relationship between Manufacturer and each authorized dealer. So that such
respect, trust and confidence can be maintained, and
differences that may develop between a dealer and
Manufacturer may be resolved amicably, Manufacturer has adopted the
Manufacturer Dealer Relations Umpire Plan (Umpire Plan).
The Umpire Plan provides for a final administrative
review by the Division and an impartial review by the Umpire of the Division's
decision affecting Dealer if Dealer believes it will result in unfair
treatment. Dealer has been furnished a copy of the Umpire Plan. Manufacturer
shall furnish Dealer with a copy of each revision or modification that
Manufacturer may make in the Umpire Plan.
ARTICLE
VII.
GENERAL
PROVISIONS
A. No Agent or Legal Representative Status
This Agreement does not make either party the agent or
legal representative of the other for any purpose whatsoever, nor does it grant
either party any authority to assume or to create any obligation on behalf of
or in the name of the other. Neither party owes the other any fiduciary
obligation.
B. Dealer's Responsibility for Its Operations
Except as provided otherwise in this Agreement,
Manufacturer has no liability in connection with the establishment or conduct
of the Dealership Operations, and Dealer will be solely responsible for all
expenditures, liabilities and obligations incurred or assumed by Dealer in
connection with Dealer's responsibilities under this Agreement.
C. Taxes
Dealer will pay all local, state, federal or other
applicable taxes and file required tax returns related to its Dealership
Operations and will hold Manufacturer harmless from any claims or demands made
by any taxing authority with respect to it.
D. Indemnification by Manufacturer
Manufacturer will assume the defense of Dealer and
indemnify Dealer against any judgment for monetary damages, less any offset
recovered by Dealer, in any lawsuit naming Dealer as a defendant relating to
any Product that has not been altered by or for Dealer when the lawsuit
concerns:
(a) Breach of the Manufacturer warranty related to the
Product, bodily injury or property damage claimed to have been caused solely by
a defect in the design, manufacture or assembly of a Product by Manufacturer
(other than a defect which should have been detected by Dealer in a reasonable
inspection of the Product);
(b) Failure of the Product to conform to the
description set forth in advertisements or product brochures distributed by
Manufacturer because of changes in standard equipment or material component
parts unless Dealer received notice of the changes prior to retail delivery of
the affected Product by Dealer; or
(c) Any substantial damage to a Product purchased by
Dealer from Manufacturer which has been repaired by Manufacturer unless Dealer
has been notified of the repair in writing prior to retail delivery of the
affected Product.
If Manufacturer reasonably concludes that allegations
other than those set forth in (a) through (c) above are being pursued in the
lawsuit, Manufacturer shall have the right to decline to accept the defense or
indemnify Dealer or, after accepting the defense, to transfer the defense back
to Dealer and withdraw its agreement to indemnify Dealer.
Procedures for requesting indemnification,
administrative details, and limitations are contained in the Service Policies
and Procedures Manual under "Indemnification." The obligations
assumed by Manufacturer are limited to those specifically described in this
Section and in the Service Policies and Procedures Manual and are conditioned
upon compliance by Dealer with the procedures described in the Manual.
This Section shall not affect any right either party
may have to seek indemnification or contribution under any other contract or by
law and such rights are expressly preserved.
E. Notices
Any notice required to be given by either party to the
other in connection with this Agreement will be in writing and delivered
personally or by mail. Except as otherwise specifically set forth in Section D
above, notices to Dealer will be directed to Dealer or its representatives at
Dealer's principal place of business and notices by Dealer will be directed to
the appropriate Zone Manager of the division(s) of Manufacturer.
F. No Implied Waivers
The failure of either party to require performance by
the other party of any provision here will in no way affect the right to
require such performance at any time thereafter; nor will the waiver by either
party of a breach of any provision here.
G. Assignment of Rights or Delegation of Duties
Except as provided in this Agreement, neither this
Agreement nor the rights or obligations of either party here may be sold,
assigned, delegated or otherwise transferred without the written approval of
the other party.
H. Accounts Payable
In addition to any right of set off provided by law,
all monies or accounts due Dealer shall be considered net of indebtedness of
Dealer to Manufacturer and Manufacturer may deduct any amounts due or to become
due from Dealer to Manufacturer or any amounts held by Manufacturer from any
sums or accounts due or to become due from Manufacturer to Dealer.
I. Applicable Law
This Agreement is governed by the laws of the State of
_________. However, if performance under this Agreement is illegal under a
valid law of any jurisdiction where such performance is to take place, the
performance will be modified to the minimum extent necessary to comply with
such law if it was effective on the date of execution of this Agreement.
J. Sale Agreement of Parties
Except as otherwise provided or referred to here,
Manufacturer has made no promises to Dealer or any Dealer Operator or owner and
there are no other agreements or understandings, either oral or in writing,
between the parties affecting this Agreement or relating to any of the subject
matters covered by this Agreement.
Except as otherwise provided here, this Agreement
cancels and supersedes all previous agreements between the parties that relate
to any matters covered here.
No agreement between Manufacturer and Dealer which
relates to matters covered here, and no change in, addition to (except the
filling in of blank lines) or erasure of any printed portion of this Agreement,
will be binding unless it is approved in a written agreement executed in
accordance with Paragraph _________ of this Agreement.
K. New and Superseding Dealer Agreements
In the event
a new and superseding form of Dealer Agreement is offered by Manufacturer to
authorized Manufacturer dealers generally at any time prior to the expiration
of the term of this Agreement, Manufacturer may terminate this Agreement by
prior written notice to Dealer, provided Manufacturer offers Dealer a new
agreement in the new and superseding form for a term
of not less than the then unexpired term of this Agreement.
Any evaluation of the effectiveness of Dealer's
performance of any of its responsibilities under this Agreement may be
reflected and considered together with any evaluation made of the effectiveness
of Dealer's performance of similar responsibilities under any succeeding or new
and superseding form of Dealer Agreement.
Unless otherwise agreed in writing, the rights and
obligations of Dealer that may otherwise become applicable upon any termination
or expiration of the term of this Agreement shall not be applicable in the
event of the execution by Manufacturer and Dealer of any new or superseding
Dealer Sales and Service Agreement and the matured rights and obligations of
the parties here shall continue under the new agreement.
Dealer's performance under any prior agreement may be
considered in an evaluation of Dealer's performance under this, or any
succeeding, agreement.
GLOSSARY
1. Area of Primary Responsibility —The geographic area
designated by Division from time to time in a Notice of Area of Primary
Responsibility.
2. Dealer —The corporation, partnership or
proprietorship that signs the Dealer Agreement.
3. Dealer Agreement —The Dealer Sales and Service
Agreement, including the Agreement proper that is executed, the Additional
Provisions, all of the related Addenda, and the Terms of Sale Bulletins.
4. Dealer Operator —Principal manager of Dealer
identified in Paragraph _________ upon whose personal service Manufacturer
relies in entering into the Dealer Agreement.
5. Dealer Owner —Owner of Dealer identified in
Paragraph _________ upon whom Manufacturer relies in entering into the Dealer
Agreement.
6. Dealership Location —The location approved by
Manufacturer for the purpose of conducting Dealership Operations.
7. Dealership Operations —All operations contemplated
by the Dealer Agreement. These operations include the sale and service of
Products and any other activities undertaken by Dealer related to Products,
including rental and leasing operations, used car sales and body shop
operations and finance and insurance operations whether conducted directly or
indirectly by Dealer.
8. Dealership Premises —Approved facilities provided
by Dealer at its Dealership Location for the conduct of Dealership Operations.
9. Division —The division of Manufacturer that markets
Motor Vehicles.
10. Eligible Items —Items of personal property
eligible for purchase by Manufacturer under Article V following termination or
expiration of the Dealer Agreement.
11. Manufacturer —Manufacturer Corporation.
12. Marks —The various trademarks, service marks,
names and designs used by Manufacturer and its affiliated companies in
connection with Products.
13. Motor Vehicles —All current model types or series
of new motor vehicles specified in the Motor Vehicle Addendum and all past
Manufacturer motor vehicles marketed through Motor Vehicle Dealers.
14. Motor Vehicle Dealers —Dealers that are a party to
a dealer agreement for the line of products constituting Motor Vehicles.
15. Parts and Accessories —New or remanufactured automotive
parts and accessories marketed by Manufacturer and listed in current Price
Schedules or supplements furnished to Dealer.
16. Products —Motor Vehicles, Parts and Accessories.
17. Released to Production —Status of a vehicle order
that occurs when the order is selected at the assembly plant for production.
18. Special Vehicles —Motor Vehicles that have limited
marketability because they differ from Manufacturer's standard specifications
or incorporate special equipment.
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