§ 23-112-310 — Delivery, preparation, and warranty obligations

(a) (1) Every licensed motor vehicle manufacturer, distributor, second-stage manufacturer, importer, or converter shall file with the Arkansas Motor Vehicle Commission with its initial application for a license: (A) A copy of the documents stating the delivery, preparation, and warranty obligations of its motor vehicle dealers; and (B) A schedule of the compensation to be paid to its motor vehicle dealers for the work and services they shall be required to perform in connection with the delivery, preparation, and warranty obligations. (2) The documents shall constitute the dealer's only responsibility for product liability as between the dealer and the manufacturer or distributor. (3) Any revisions to the delivery, preparation, and warranty obligations or to the schedule of compensation shall be filed no later than September 15 of each calendar year. (b) Any mechanical, body, or parts defects arising from any express or implied warranties of any manufacturer shall constitute the manufacturer's product or warranty liability. (c) Notwithstanding the terms of a franchise agreement or provision of law in conflict with this subsection, the dealer's delivery, preparation, and warranty obligations as filed with the commission shall constitute the dealer's sole responsibility for product liability as between the dealer and the manufacturer or distributor, and, except for a loss caused by the dealer's negligence or intentional misconduct or a loss caused by the dealer's modification of a product without manufacturer authorization, the manufacturer or distributor shall reimburse the dealer for all losses incurred by the dealer, including legal fees, court costs, and damages, as a result of the dealer's having been named a party in a product liability action. (d) (1) (A) A manufacturer, distributor, distributor branch or division, or factory or division branch shall not pay to any of its motor vehicle dealers a labor rate per hour or parts rate for warranty work that is less than that charged by the dealer to its retail customers, provided the rate is reasonable compared to other same line-make dealers in the dealer's relevant market area or the dealer's competitive market area. (B) Conversely, a dealer shall not charge to its manufacturer, distributor, distributor branch or division, or factory branch or division a labor rate per hour or parts rate in excess of the rate charged to its retail customers. (C) A manufacturer, distributor, distributor branch or division, or factory branch or division of new motorcycles, motorized cycles, and all-terrain vehicles shall not pay to any new motor vehicle dealers of motorcycles, motorized cycles, and all-terrain vehicles a labor rate per hour or parts rate for warranty work that is less than that charged by the new motor vehicle dealer to its retail customers, provided that the rate is reasonable compared to other same line make motor vehicle dealers in the new motor vehicle dealer's relevant market area or the new motor vehicle dealer's competitive market area. (D) (i) A motor vehicle dealer may request a change in the labor rate per hour for warranty work or parts markup for warranty work, and the manufacturer, distributor, distributor branch or division, or factory or division branch shall approve or disapprove the request within forty-five (45) days from the date the request is received. (ii) A request submitted under subdivision (d)(1)(D)(i) of this section is approved if a manufacturer, distributor, distributor branch or division, or factory or division branch fails to approve or disapprove the request within forty-five (45) days from the date the request for a change in the labor rate per hour for warranty work or parts markup for warranty work is received. (iii) If the manufacturer or distributor determines, from any set of repair orders submitted under subdivision (d)(1)(D)(i) of this section, that the labor rate per hour for warranty work or the parts markup for warranty work is substantially higher or lower than the rate currently on record with the manufacturer or distributor, then the manufacturer or distributor may request additional documentation for a period of either forty-five (45) days prior or forty-five (45) days subsequent to the time period for which the repair orders were submitted. (2) (A) All claims made by motor vehicle dealers for the labor, parts, or incidental expenses shall be paid within thirty (30) days following their approval. (B) All claims shall be either approved or disapproved within thirty (30) days after their receipt, and when any claim is disapproved, the motor vehicle dealer who submits it shall be notified in writing of its disapproval within the period, and each notice shall state the specific grounds upon which the disapproval is based. (3) A manufacturer, distributor, distributor branch or division, or factory or division branch shall pay a motor vehicle dealer for warranty work, as long as the work in question was properly performed in accordance with requirements of the manufacturer, distributor, distributor branch or division, or factory or division branch.

Legislative History

Amended by Act 2021, No. 1077,§ 4, eff. 7/28/2021. Amended by Act 2019, No. 924,§ 2, eff. 7/24/2019. Amended by Act 2015, No. 1055,§ 3, eff. 7/22/2015. Amended by Act 2013, No. 1043,§ 4, eff. 1/1/2014. Acts 1975, No. 388, §§ 5, 6; 1985, No. 1032, §§ 3, 5; 1985, No. 1058, §§ 3, 5; A.S.A. 1947, §§ 75-2305, 75-2306; Acts 1991, No. 411, § 2; 1997, No. 1154, § 11; 1999, No. 1042, § 5; 2001, No. 1053, § 11; 2009, No. 756, § 10; 2011, No. 1005, § 7.