GENERAL ASSEMBLY OF NORTH CAROLINA
1995 SESSION
CHAPTER 156
The General Assembly of North Carolina enacts:
Section 1. G.S. 20-305.1(b) reads as rewritten:
"(b) Notwithstanding the terms of any franchise
agreement, it is unlawful for any motor vehicle manufacturer, factory branch,
distributor, or distributor branch to fail to perform any of its warranty
obligations with respect to a motor vehicle, to fail to compensate its motor
vehicle dealers licensed in this State for warranty parts other than parts used
to repair the living facilities of recreational vehicles, at the prevailing
retail rate according to the factors in subsection (a) of this section, or, in
service in accordance with the schedule of compensation provided the dealer
pursuant to subsection (a) above, and to fail to indemnify and hold harmless
its franchised dealers licensed in this State against any judgment for damages
or settlements agreed to by the manufacturer, including, but not limited to,
court costs and reasonable attorneys' fees of the motor vehicle dealer, arising
out of complaints, claims or lawsuits including, but not limited to, strict
liability, negligence, misrepresentation, express or implied warranty, or
recision or revocation of acceptance of the sale of a motor vehicle as defined
in G.S. 25-2-608, to the extent that the judgment or settlement relates to the
alleged defective negligent manufacture, assembly or design of new motor
vehicles, parts or accessories or other functions by the manufacturer, factory
branch, distributor or distributor branch, beyond the control of the dealer.
Any audit for warranty parts or service compensation, service incentives,
rebates, or other forms of sales incentive compensation shall only be for
the 24-month 12-month period immediately following the date of
the claim. payment of the claim by the manufacturer, factory branch,
distributor, or distributor branch. Any audit for sales incentives, service
incentives, rebates, or other forms of incentive compensation shall only be for
the 24-month period immediately following the date of the payment of the claim
by the manufacturer, factory branch, distributor, or distributor branch. Provided,
however, these limitations shall not be effective in the case of fraudulent
claims."
Sec. 2. This act becomes effective October 1, 1995.
In the General Assembly read three times and ratified this the 1st day of June, 1995.
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Dennis A. Wicker
President of the Senate
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Harold J. Brubaker
Speaker of the House of Representatives