Arbitration and forum selection clauses in the sale of motor vehicles

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  1. (a) Except as provided in subsection (b) of this section, no new or used automobile dealer shall include in the contract for the sale of a motor vehicle a provision requiring the purchaser to submit a disputed matter to:

    1. (1) Binding arbitration; or

    2. (2) A forum outside the county in which the dealer resides or does business.

  2. (b)

    1. (1)

      1. (A) The purchaser of a motor vehicle may knowingly and voluntarily agree to submit to binding arbitration only by signing a separate document entitled in bold print “Waiver of Purchaser's Right to Sue” containing a written waiver specifically acknowledging the purchaser's relinquishment of the right to have any dispute over the sale or operation of the motor vehicle decided by a court of law.

      2. (B) The purchaser of a motor vehicle may knowingly and voluntarily agree to submit to a forum outside the dealer's residence or place of business only by signing a separate document entitled in bold print “Waiver of Purchaser's Choice of Forum” containing a written waiver specifically acknowledging the purchaser's relinquishment of the right to have any dispute over the sale or operation of the motor vehicle decided by a court or arbitrator in the county in which the seller resides or does business.

    2. (2) A waiver described in subdivision (b)(1)(A) or (B) of this section shall not be enforceable unless contained in a separate document.

  3. (c) A purchaser who refuses to sign a waiver described in subsection (b) of this section shall not be denied the right to purchase a motor vehicle at the price agreed upon by the purchaser and the seller.


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