The Dealers and Dealer Group personnel reading this article are inundated with correspondence and documents from the OEMs on a daily basis. These materials may come by mail, email, web portal, or hand-delivery. Some documents may be of little use or import, while others are crucially important, impacting the legal rights of the Dealership and, ultimately, your bottom line.
Examples of the more significant documents are those that relate to market studies, additional competitors, breaches of the dealer agreement, warranty rates, incentive audits and chargebacks, ownership transfers, territory (PMA) changes, and dealer agreement renewals or modifications. In many instances, these sorts of documents trigger your legal deadlines (sometimes as short as 2 weeks) to assert applicable motor vehicle franchise protections. For this reason, it is crucial that you share these documents with competent legal counsel so you don’t waive rights by missing a deadline. We have seen instances where dealers mistakenly underestimate the importance of a letter received from the OEM only to later learn they waived protections. This is always difficult news to deliver and in some instances is catastrophic. Fortunately, this scenario can be avoided by asking legal counsel to quickly review notices received from the OEM. The best practice on this would be to routinely forward documents from the OEM which relate to the list of topics above and any other topics that you suspect may weigh on your legal rights.