Law:Title 14. Regulation Of Motor Vehicles And Transportation. Subtitle B. Regulations Related To Vessels from Chapter 2352. Boat Manufacturers, Distributors, And Dealers (Texas)

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Subtitle B. Regulations Related To Vessels

Contents

Chapter 2352. Boat Manufacturers, Distributors, And Dealers

Subchapter A. General Provisions

Section  2352.001.  Definitions.

In this chapter:

(1)  "Agreement" means a written agreement between a manufacturer or distributor and a dealer for the purchase and sale of new boats or new outboard motors.

(2)  "Boat" means:

(A)  a motorboat; or

(B)  any other vessel that is more than 14 feet in length and is designed to be propelled by a sail.

(3)  "Dealer" has the meaning assigned by Section 31.003, Parks and Wildlife Code.

(4)  "Distributor" means a person who:

(A)  offers for sale, sells, or distributes new boats or new outboard motors to dealers; or

(B)  controls a person described by Subdivision (A).

(5)  "Manufacturer" has the meaning assigned by Section 31.003, Parks and Wildlife Code.

(6)  "Motorboat" has the meaning assigned by Section 31. 003, Parks and Wildlife Code.

(7)  "New" has the meaning assigned by Section 31.003, Parks and Wildlife Code.

(8)  "Outboard motor" has the meaning assigned by Section 31.003, Parks and Wildlife Code.

(9)  "Vessel" has the meaning assigned by Section 31.003, Parks and Wildlife Code.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.



Subchapter B. Dealer Agreements

Section  2352.051.  Agreement Required.

A manufacturer or distributor contracting with a dealer may not sell or offer for sale, and a dealer may not purchase or offer to purchase, a new boat or a new outboard motor unless the manufacturer or distributor and the dealer enter into an agreement that complies with this chapter.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.



Section  2352.052.  Terms Of Agreement.

(a) An agreement under this chapter must include:

(1)  the dealer's location, territory, or market area;

(2)  the length of the agreement;

(3)  any performance or marketing standards;

(4)  any working capital, inventory, facility, equipment, or tool standards;

(5)  provisions for termination or nonrenewal of the agreement and the designation of a successor dealer in the event of the dealer's death or disability;

(6)  the obligations of the manufacturer, distributor, and dealer in the preparation and delivery of and warranty service on new boats and new outboard motors;

(7)  the obligations of the manufacturer, distributor, and dealer on termination of the agreement, including inventory of new boats and new outboard motors, parts inventory, equipment, furnishings, special tools, and required signs; and

(8)  dispute resolution procedures.

(b)  Notwithstanding the terms of a dealer agreement, a dealer agreement and any transaction subject to this chapter must comply with the requirements of this section.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.



Section  2352.053.  Termination Or Nonrenewal Of Agreement; Notice.

(a) A manufacturer or distributor may not terminate an agreement unless there is good cause for the termination and:

(1)  the manufacturer or distributor gives the dealer written notice of termination in clear and concise terms;

(2)  the notice states the reasons for termination; and

(3)  the dealer has been given 30 days to make a good faith effort to cure the reasons for termination stated in the notice.

(b)  Good cause is not required for the nonrenewal of an agreement other than an agreement having an original term of less than one year.

(c)  The fact that a dealer holds an agreement involving another line, make, or brand of new boat or new outboard motor does not constitute good cause.

(d)  A manufacturer or distributor may terminate an agreement on written notice if the dealer:

(1)  financially defaults to the manufacturer, the distributor, or a financing source;

(2)  becomes subject to an order for relief, as that term is used in Title 11, United States Code;

(3)  engages in fraudulent conduct in:

(A)  conducting the dealer's business; or

(B)  performing the agreement;

(4)  is a corporation that ceases to exist;

(5)  becomes insolvent or takes or fails to take any action that constitutes an admission of inability to pay debts as the debts mature;

(6)  makes a general assignment for the benefit of creditors to an agent authorized to liquidate any substantial amount of assets; or

(7)  applies to a court for the appointment of a receiver for any assets or properties.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.



Subchapter C. Regulation Of Manufacturers, Distributors, And Dealers

Section  2352.101.  Delivery Requirements.

(a) A manufacturer or distributor who publicly advertises a new boat, new outboard motor, or part as available for immediate delivery shall deliver the boat, outboard motor, or part in reasonable quantities and within a reasonable time after receipt of an order from a dealer who has an agreement with the manufacturer or distributor applicable to the advertised boat, outboard motor, or part.

(b)  Subsection (a) does not apply if circumstances beyond the control of the manufacturer or distributor prevent the delivery.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.



Section  2352.102.  Sale, Transfer, Or Passage Of Title.

A manufacturer or distributor may not unreasonably withhold approval of a sale, transfer, or passage of title of a dealer, agreement, management of the dealer, or designation of a successor dealer if:

(1)  the dealer complies with any provisions in the agreement for the sale, transfer, or passage of title;

(2)  the transferee meets the criteria:

(A)  stated in the agreement; or

(B)  generally applied by the manufacturer or distributor in similar situations; and

(3)  the transferee agrees to be bound by the terms and conditions of the manufacturer's or distributor's standard agreement.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.



Section  2352.103.  Financing.

(a) A manufacturer or distributor may not require a dealer to finance through a particular financing source a new boat or new outboard motor sold by the dealer.

(b)  A manufacturer or distributor may not require a dealer to act as the manufacturer's or distributor's agent in securing:

(1)  a promissory note and security agreement in connection with the sale or purchase of a new boat or new outboard motor; or

(2)  an insurance policy on the operation of a new boat or new outboard motor.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.



Section  2352.104.  Sale Of Parts And Accessories After Termination Of Agreement.

(a) After a manufacturer or distributor terminates an agreement, the former dealer may continue to purchase parts and accessories to service the products covered by the agreement until the first anniversary of the date of termination. The manufacturer or distributor shall sell parts and accessories under this subsection at the same price offered to a current dealer.

(b)  Subsection (a) does not apply if the manufacturer or distributor terminates the agreement:

(1)  based on quality of service; or

(2)  for a reason justifying immediate termination under Section 2352.053(d).

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.



Section  2352.105.  Compensation For Warranty Service.

(a) A manufacturer or distributor shall fairly compensate a dealer for the work and services the dealer performs and for expenses the dealer incurs to comply with a manufacturer's or distributor's warranty.

(b)  Except as provided by Subsection (c), a manufacturer or distributor may not pay a dealer a labor rate for warranty work that is less than the rate the dealer charges retail customers for nonwarranty work of the same kind by similar technicians.

(c)  A manufacturer or distributor who has a warranty program that reimburses a dealer at 100 percent of the dealer's retail labor rate if the dealer complies with reasonable and objective criteria shall pay the dealer the labor rate provided by the terms of the program or a rate equal to 80 percent of the dealer's retail labor rate, whichever rate is higher.

(d)  A manufacturer or distributor shall approve or disapprove a dealer's claim for warranty work within a reasonable time. If the claim is approved, the manufacturer or distributor shall pay the claim within a reasonable time. If the claim is disapproved, the manufacturer or distributor shall notify the dealer of the grounds for disapproval.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.



Section  2352.106.  Refunds, Rebates, And Discounts.

A dealer may not pay or assume a part of a refund, rebate, discount, or other financial adjustment made by the manufacturer or distributor to a customer or a dealer unless the dealer voluntarily agrees to make the payment or assumption.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.



Section  2352.107.  Repurchase By Manufacturer Or Distributor.

(a) A manufacturer or distributor who terminates an agreement shall repurchase on demand from the dealer any of the following items, purchased by the dealer from the manufacturer or distributor, that are free and clear of a lien or encumbrance:

(1)  a new, unsold, retailable, undamaged, and complete boat, with accessories and packaged trailers sold with the boat, and any outboard motor that:

(A)  is in the dealer's inventory; and

(B)  was purchased within one year preceding the date of the termination; and

(2)  any new, current, unsold, undamaged, and unused parts or accessories for boats or outboard motors in the original resalable merchandising package.

(b)  A demand for repurchase must be made in writing not later than the 30th day after the date the manufacturer or distributor terminates the agreement. The dealer must provide the manufacturer or distributor with a complete list of the items to be repurchased. The manufacturer or distributor shall complete the repurchase within a reasonable time.

(c)  The manufacturer or distributor shall:

(1)  repurchase an item described by Subsection (a)(1) at the dealer's invoiced cost, less any allowance paid to the dealer;

(2)  repurchase an item described by Subsection (a)(2) at the dealer's invoiced cost; and

(3)  pay the cost incurred by the dealer to transport an item described by Subsection (a) to the manufacturer.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.



Subchapter D. Enforcement Provisions

Section  2352.201.  Civil Liability.

A person who violates this chapter or an agreement regulated by this chapter is liable to an injured party for:

(1)  the actual damages caused by the violation; and

(2)  reasonable legal fees and court costs if litigation is commenced in connection with the violation.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.



Section  2352.202.  Venue For Dispute.

Venue for a dispute under an agreement is in the county of the dealer's principal place of business as stated in the agreement.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.



Section  2352.203.  Arbitration.

A dealer may not be required to submit to arbitration on an issue between the dealer and the manufacturer or distributor at a location that is out of state or an unreasonable distance from the dealer's principal place of business.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003.


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