leasing and/or financing. Notably, dealers generally NEED to provide consumers with a right to opt out of sharing their information with non-affiliated third parties when providing their information for the purposes of requesting financing. To that end, FAQ 12 of the FTC’s “Privacy Rule and Auto Dealers: FAQs | Federal Trade Commission” specifically notes that “A manufacturer is not considered your ‘affiliate’ unless it controls your management or your policies, or you are under common control with the manufacturer,” so unless an exception applies, consumers retain the right to opt out of the dealer sharing their information under federal law regardless of what an agreement between the dealer and manufacturer may say.5 This begs the question, “Am I even permitted to sign such an agreement or is such sharing of customer data a violation of federal or state data privacy laws on its face?” Here again comes the overarching question, “What can I do about it? It is the manufacturer that requires this.” In fact, there is a lot you can do to push back and protect yourself. For example, the New Hampshire Dealer Act includes safeguards to protect dealers from overly burdensome manufacturer contract requirements. In particular, R.S.A. 357-C:3(III)(b) provides that: “It shall be deemed an unfair method of competition and unfair and deceptive practice for any: … “III. Manufacturer; distributor; distributor branch or division; factory branch or division; or any agent thereof to: … “(b) Coerce, or attempt to coerce, any motor vehicle dealer to enter into any agreement with such manufacturer, distributor, distributor branch or division, factory branch or division, or any agent thereof, or do any other act prejudicial to the dealer by threatening to cancel any franchise or any contractual agreement existing between such manufacturer, distributor, distributor branch or division, or factory branch or division, and the dealer provided, however, that notice in good faith to any motor vehicle dealer of that dealer’s violation of any terms or provisions of such franchise or contractual agreement shall not constitute a violation of this chapter …” In this case, if you fight back and refuse to sign such a burdensome agreement presented by the manufacturer, you likely could find protection under the New Hampshire Dealer Act. The New Hampshire Dealer Act was put in place to level the playing field between manufacturers and dealers, and the New Hampshire courts have been supportive of the Act and its goals. In fact, even when dealers have voluntarily agreed to contract provisions that the courts believe run afoul of the Act, the courts have been quick to render such provisions unenforceable.6 However, it is usually much more cost-effective to avoid signing contracts with such onerous terms in the first place rather than fight over the enforceability of such provisions later on in the courts. If you have already signed one of these data-sharing agreements, we recommend that you consult with legal counsel who specializes in data privacy issues to make sure that you have proper privacy disclosures in place at your dealership and on your website. FORUM SELECTION CLAUSES Many contracts include a provision that defines where a lawsuit (or, in some cases, arbitration) must be brought if the parties end up in a dispute.7 Like limitations of liability, such provisions are regularly enforced if they provide for exclusive jurisdiction in a particular forum.8 For many service providers, they seek to select a forum, or location, that best suits them and their needs. However, does it really make sense for you, a New Hampshire dealer, to have to litigate a dispute in Ohio, or better yet, California, if the relationship turns sour? I would hazard to guess that 99% of the time, the answer is no! The majority, if not all, of your witnesses in such a dispute are likely located in New Hampshire. The same likely holds true for the documents and evidence that will be used in such a dispute. In addition, your counsel of choice is likely located and licensed in New Hampshire, not some far flung state that is half-way or entirely across the country. This means that you will then probably engage both your local counsel, with whom you are familiar and comfortable, as well as counsel in the jurisdiction where you have agreed to bring your disputes (unless your counsel has a national presence). All of this means added expense to vindicate your rights. So, what can you do? Next time a service provider presents you with a contract,9 pay particular attention to the forum selection clause. While many businesses feel that they are hamstrung when presented with a contract for services or otherwise by a vendor, they must remember that they, too, can push back and fight for more favorable terms. 28
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