ARKANSAS MOTOR VEHICLE COMMISSION ACT parts, or accessories which are already installed on the car when received by the dealer; (2) To represent and sell as a new motor vehicle any motor vehicle that is a used motor vehicle; or (3) To resort to or use any false or misleading advertisement in connection with his or her business as a motor vehicle dealer or motor vehicle salesperson. History. Acts 1975, No. 388, § 5; A.S.A. 1947, § 75-2305; Acts 2001, No. 1053, § 15; 2021, No. 1077, § 7. 23-112-403. Manufacturers, distributors, second-stage manufacturers, importers or converters. (a) It shall be unlawful: (1) For a manufacturer, distributor, second-stage manufacturer, importer, converter, distributor branch or division, or factory branch or division, or an officer, agent, or other representative thereof, to coerce or attempt to coerce any motor vehicle dealer: (A) To order or accept delivery of any motor vehicles, appliances, equipment, parts, or accessories therefore or any other commodities which shall not have been voluntarily ordered by the motor vehicle dealer; (B) To order or accept delivery of any motor vehicle with special features, appliances, accessories, or equipment not included in the list price of the motor vehicle as publicly advertised by the manufacturer thereof; (C) To order for any person any parts, accessories, equipment, machinery, tools, appliances, or any commodity whatsoever; (D) To contribute or pay money or anything of value into any cooperative or other advertising program or fund; or (E) To file for or to use a legal or “d/b/a” name or identification other than a name of choice by the dealer; (2) For a manufacturer, distributor, distributor branch or division, or factory branch or division, or an officer, agent, or other representative thereof: (A) (i) To fail or refuse to: (a) Deliver, in reasonable quantities and within a reasonable time after receipt of a dealer’s order to any licensed motor vehicle dealer having a franchise or contractual arrangement for the retail sale of new motor vehicles sold or distributed by the manufacturer, distributor, distributor branch or division, or factory branch or division, any motor vehicles that are covered by the franchise or contract specifically publicly advertised by the manufacturer, distributor, distributor branch or division, or factory branch or division to be available for immediate delivery; (b) Make available to each motor vehicle dealer an adequate supply of motor vehicles by series, product line, and model in a fair, reasonable, and equitable manner subject to subdivision (a)(2)(L) of this section; (c) Apply fair, reasonable, and equitable performance standards that take into consideration the number of motor vehicles allocated to a motor vehicle dealer when measuring the motor vehicle dealer’s sales or service performance under the terms of the franchise agreement; (d) Apply its allocation process equitably and not discriminate among motor vehicle dealers; and (e) Disclose in writing upon request by a motor vehicle dealer the allocation process or system used by the manufacturer, distributor, distributor branch or division, or factory branch or division. (ii) However, the failure to deliver any motor vehicle shall not be considered a violation of this chapter if the failure is due to forces of nature, work stoppages or delays due to strikes or labor difficulties, freight, embargoes, or other causes over which the manufacturer or distributor, or any agent thereof, has no control; (B) (i) To engage in any of the following: (a) To coerce or attempt to coerce any motor vehicle dealer to enter into any agreement with the manufacturer, distributor, distributor branch or division, factory branch or division, or officer, agent, or other representative thereof; or (b) To do any other act prejudicial to the motor vehicle dealer by threatening to cancel any franchise or any contractual agreement existing between the manufacturer, distributor, distributor branch or division, or factory branch or division and the motor vehicle dealer. (c) To do an act prejudicial to the motor vehicle dealer by threatening to cancel a franchise or a contractual agreement existing between the manufacturer, distributor, distributor branch or division, or factory branch or division and the motor vehicle dealer. (ii) However, good faith notice to any motor vehicle dealer of the dealer’s violation of any terms or provisions of the franchise or contractual agreement shall not constitute a violation of this chapter; (C) (i) (a) To terminate or cancel the franchise or selling agreement of any dealer without due cause. (b) The non renewal of a franchise or selling agreement without due cause shall constitute an unfair termination or cancellation, regardless of the terms or provisions of the franchise or selling agreement. (c) As used in this subchapter, tests for determining what constitutes due cause for a manufacturer or distributor to terminate a franchise or sales and service agreement include whether the motor vehicle dealer: (1) Has transferred a majority ownership interest in the dealership without the manufacturer’s or distributor’s consent; (2) Has made a material misrepresentation or committed a fraudulent act, or both, in applying for or in acting under the franchise agreement; (3) Has filed a voluntary petition in bankruptcy or has had an involuntary petition in bankruptcy filed against him or her that has not been discharged within sixty (60) days after the filing, is in default under a security agreement in effect with the manufacturer or distributor, or is in receivership; (4) Has engaged in unfair business or trade practices; (5) Has failed to fulfill the warranty obligations of the manufacturer or distributor required to be performed by the motor vehicle dealer; (6) Has inadequate motor vehicle sales and service facilities, equipment, vehicle parts, and unqualified service personnel to provide for the needs of the consumers for the motor vehicles handled by the franchisee and is rendering inadequate service to the public; (7) Has failed to comply with an applicable federal, state, or local licensing law; (8) Has been convicted of a crime, the effect of which would be detrimental to the manufacturer, distributor, or dealership; (9) Has failed to operate in the normal course of business for ten (10) consecutive business days or has terminated his or her business; (10) Has relocated his or her place of business without the manufacturer’s or distributor’s consent; or (11) Has failed to comply with the terms of the franchise, the reasonableness and fairness of the franchise terms, and the extent and materiality of the franchisee’s failure to comply. (d) A manufacturer, distributor, second-stage manufacturer, importer, converter, manufacturer branch or division, or distributor branch or division shall have the burden of proving whether there is due cause to terminate a franchise or sales and service agreement. (ii) (a) The manufacturer, distributor, distributor branch or division, factory branch or division, or officer, agent, or other representative thereof shall notify a motor vehicle dealer in writing and forward a copy of the Arkansas Automobile Dealers Association | 35
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