§ 51-19-12 — Civil liability

North Dakota § 51-19-12

• Jurisdiction: North Dakota
• Title 51: Sales and Exchanges
• Ch. 51-19: Franchise Investment Law

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1. Any person who violates any provision of this chapter or any rule or order issued by
the commissioner thereunder is liable to the franchisee or subfranchisor who may
bring an action for damages, for rescission, or for such other relief as the court may
deem appropriate.
2. Every person who directly or indirectly controls a person liable under subsection 1,
every partner in a firm so liable, every principal executive officer or director of a
corporation so liable, every president or governor of a limited liability company so
liable, every person occupying a similar status or performing similar functions, and
every employee of a person so liable who materially aids in the act or transaction
constituting the violation is also liable jointly and severally with and to the same extent
as such person, unless the other person who is so liable had no knowledge of or
reasonable grounds to believe in the existence of the facts by reason of which the
liability is alleged to exist.
3. In any action under this section, the franchisee or subfranchisor, if successful, is also
entitled to costs and disbursements plus reasonable attorney's fees.
4. No franchisee or subfranchisor may file or maintain an action under this section if the
person received a written offer before the action was commenced and at a time when
the person owned the franchise to refund the consideration paid together with interest
at the rate of seven percent per annum from the date of purchase, less the amount of
income received on the franchise, conditioned only upon tender by the franchisee or
subfranchisor of all items received by the person for the consideration and not sold,
and failed to accept the offer within thirty days of its receipt or if the franchisee
received the offer before the action was commenced and at a time when the person
did not own the franchise, unless the person rejected the offer in writing within thirty
days of its receipt; provided, that in either instance the offering documents and
rescission prospectus must be submitted to the commissioner for approval at least
fifteen days prior to submission to the franchisee or subfranchisor. The rescission offer
must recite the provisions of this section. If the franchise involves a substantial building
or substantial equipment and a significant period of time has elapsed since the sale of
the franchise, the commissioner, in approving a rescission offer, may approve an
equitable offer recognizing depreciation, amortization, and other factors which bear
upon the value of the franchise being returned to the franchisor.
5. No action may be brought under this section after five years from the date that the
aggrieved party knew or reasonably should have known about the facts that are the

basis for the alleged violation. This subsection does not apply to any action under
sections 51-19-09 and 51-19-11.
6. Except as explicitly provided in this section, no civil liability in favor of any private party
may arise against any person by implication from or as a result of the violation of any
provision of this chapter or any rule or order issued by the commissioner thereunder.
Nothing herein limits any liability which may exist by virtue of any other statute or
under common law if this chapter were not in effect.