Warranty obligation

  1. Law
  2. Arkansas Code
  3. Public Utilities and Regulated Industries
  4. Miscellaneous Regulated Industries
  5. Arkansas Motor Vehicle Commission Act
  6. Recreational Vehicle Franchise Act
  7. Warranty obligation

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  1. (a) Each warrantor shall:

    1. (1) Specify in writing to each of its dealers the obligations for preparation, delivery, and warranty service on its products;

    2. (2) Compensate the dealer for warranty service required of the dealer by the warrantor;

    3. (3)

      1. (A) Provide the dealer:

        1. (i) The schedule of compensation to be paid; and

        2. (ii) The time allowances for the performance of any work or service.

      2. (B) The schedule of compensation shall include:

        1. (i) Reasonable compensation for diagnostic work as well as warranty labor; and

        2. (ii) Reasonable time allowances in the schedule for the diagnosis and performance of warranty labor.

      3. (C) In the determination of what constitutes reasonable compensation under this section, the principal factors to be given consideration are:

        1. (i) The actual wage rates being paid by the dealer; and

        2. (ii) The actual retail labor rate being charged by the recreational vehicle dealers in the community in which the dealer is doing business;

    4. (4) Compensate a dealer for warranty labor not less than the lowest retail labor rates actually charged by the dealer for like nonwarranty labor as long as such rates are reasonable;

    5. (5) For individual warranty parts, reimburse the dealer at actual wholesale cost plus a minimum handling charge of thirty percent (30%) and the cost, if any, of freight to return warranty parts to the warrantor;

    6. (6) For complete components or accessories, provide the dealer with the new complete component or accessory plus the cost, if any, of freight to return the defective complete component or accessory to the warrantor; and

    7. (7)

      1. (A) Approve or disapprove warranty claims in writing within thirty (30) days after the date of submission by the dealer in the manner and form prescribed by the warrantor.

      2. (B) Claims not specifically disapproved in writing within thirty (30) days shall be considered to be approved.

      3. (C) A claim that is approved or considered to be approved under this section shall be paid within sixty (60) days of submission.

  2. (b)

    1. (1) Warranty audits of dealer records may be conducted by the warrantor on a reasonable basis.

    2. (2) Dealer claims for warranty compensation shall not be denied except for cause, including without limitation:

      1. (A) Performance of nonwarranty repairs;

      2. (B) Material noncompliance with the warrantor's published policies and procedures;

      3. (C) Lack of material documentation;

      4. (D) Fraud; or

      5. (E) Misrepresentation.

  3. (c) A dealer shall:

    1. (1) Submit warranty claims within thirty (30) days after completing work; and

    2. (2) Notify the warrantor in writing if the dealer is unable to perform any warranty repairs within ten (10) days of receipt of a written complaint from a consumer.

  4. (d)

    1. (1) A warrantor shall not:

      1. (A) Fail to perform any of its warranty obligations with respect to its warranted products;

      2. (B)

        1. (i) Fail to include, in written notices of factory campaigns to recreational vehicle owners and dealers, the expected date by which necessary parts and equipment, including tires and chassis or chassis parts, will be available to dealers to perform the factory campaign work.

        2. (ii) The warrantor may ship parts to the dealer to effect the factory campaign work, and if the parts are in excess of the dealer's requirements, the dealer may return unused undamaged parts to the warrantor for credit after completion of the factory campaign;

      3. (C) Fail to compensate any of its dealers for authorized repairs effected by the dealer of merchandise damaged in manufacture or transit to the dealer, if the carrier is designated by the warrantor, factory branch, or distributor;

      4. (D) Fail to compensate any of its dealers in accordance with the schedule of compensation provided to the dealer under this section if performed in a timely and competent manner;

      5. (E) Intentionally misrepresent in any way to purchasers of recreational vehicles that warranties with respect to the manufacture, performance, or design of the vehicle are made by the dealer as warrantor or co-warrantor; or

      6. (F) Require the dealer to make warranties to customers in any manner related to the manufacture of the recreational vehicle.

    2. (2)

      1. (A) Notwithstanding the terms of any dealer agreement, it is a violation of this subchapter for a warrantor to fail to indemnify and hold harmless its new recreational vehicle dealer against any losses or damages to the extent that the losses or damages are caused by the negligence or willful misconduct of the warrantor.

      2. (B) A new recreational vehicle dealer shall not be denied indemnification for failing to discover, disclose, or remedy a defect in the design or manufacturing of a new recreational vehicle.

      3. (C) A new recreational vehicle dealer may be denied indemnification if the new recreational vehicle dealer fails to remedy a known and announced defect in accordance with the written instructions of a warrantor for whom the new recreational vehicle dealer is obligated to perform warranty service.

      4. (D)

        1. (i) A new recreational vehicle dealer shall provide to a warrantor written notice of a pending lawsuit in which allegations are made that are covered by this subchapter within ten (10) business days after the dealer receives written notice of the lawsuit.

        2. (ii) Written notice to the warrantor shall be by any method that provides a receipt for delivery.

      5. (E) Subdivision (d)(2) of this section applies even after the new recreational vehicle is titled.

  5. (e)

    1. (1) It is a violation of this subchapter for any dealer to:

      1. (A) Fail to perform predelivery inspection functions, as specified by the warrantor, in a competent and timely manner;

      2. (B) Fail to perform warranty service work authorized by the warrantor in a competent and reasonably timely manner on a transient customer's vehicle of a line-make sold and serviced or serviced by that dealer;

      3. (C) Fail to accurately document the:

        1. (i) Time spent completing each repair;

        2. (ii) Total number of repair attempts conducted on a single unit; and

        3. (iii) Total number of repair attempts for the same repair conducted on a single vehicle;

      4. (D) Fail to maintain written records, including a consumer's signature, regarding the amount of time a unit is stored for the consumer's convenience during a repair;

      5. (E) Make fraudulent warranty claims; or

      6. (F) Misrepresent the terms of a warranty.

    2. (2)

      1. (A) Notwithstanding the terms of any dealer agreement, it is a violation of this subchapter for a new recreational vehicle dealer to fail to indemnify and hold harmless its warrantor against any losses or damages to the extent that the losses or damages are caused by the negligence or willful misconduct of the new recreational vehicle dealer.

      2. (B) A warrantor shall provide to a new recreational vehicle dealer a copy of any pending lawsuit or similar proceeding in which allegations are made that come within the provisions of this subsection within ten (10) days after receiving such suit.

      3. (C) This subdivision (e)(2) applies even after the new recreational vehicle is titled.


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