News & Analysis as of

Contract Terms Car Dealerships

Holland & Knight LLP

Deals on Wheels: Legal Pitfalls and Protections in Automotive Property Sales

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Automotive real estate (such as automobile dealerships, agricultural equipment dealers and service centers) straddles retail and industrial uses. This unique characteristic means that buyers and sellers of automotive real...more

Lathrop GPM

Second Circuit Affirms Dismissal of New York Dealer Act Claims

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The Second Circuit recently affirmed the dismissal of claims under the New York Franchised Motor Vehicle Dealer Act and various contract claims. Garrand Bros. LLC v. Am. Honda Motor Co., 2024 WL 4691004 (2d Cir. Nov. 6,...more

Hudson Cook, LLP

When Is a Sale Final? Not Always as Early as You'd Like It to Be

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One of the first things I learned in my first-year contracts class in law school was the Uniform Commercial Code. Specifically, the class covered Article 2 of the UCC, which governs sales of goods, including motor vehicles. ...more

Miller Canfield

Michigan Court of Appeals Enforces Arbitration Provision in Auto Lease

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In a rare published decision, the Michigan Court of Appeals enforced a provision in an auto lease that allowed either party to demand arbitration, even though the dealer had assigned the lease to a finance company and no...more

Morgan Lewis

FTC’s Final ‘Cars Rule’ on Dealer Sales Practices: Implications for Banks, Auto Finance, and ‘captives’

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The Federal Trade Commission recently issued a final rule that is squarely aimed at changing the way dealers interact with customers in the financing process. The final rule takes effect on July 30, 2024....more

Fox Rothschild LLP

Avoiding the ‘Highest and Worst’ Deal

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The term “Highest and Best” deal has been well-known in the bankruptcy field for many years. In a bankruptcy auction of a business or real property, the judges, trustees and creditors recognize that the better deal is not...more

Hudson Cook, LLP

Check, Please!

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A typical car has around 30,000 parts precisely fitted together. Each part serves a unique role in the operation of the vehicle, and the result is a machine capable of traveling at speeds, in some cases, in the hundreds of...more

Hudson Cook, LLP

FTC Staff Report on Buying and Financing Cars: Part 2

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In July 2020, the Federal Trade Commission (“FTC”) issued its “Staff Report on Buying and Financing Cars.” The Staff Report consisted of two separate reports – a report from the FTC’s Bureau of Consumer Protection (“BCP”)...more

Hudson Cook, LLP

Dealership's Finance Manager Had Duty to Inform Buyer of Inconspicuous Arbitration Clause in Purchase Agreement Due to False...

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The buyer and a dealership signed a purchase agreement containing a dispute resolution clause ("DRC"). The DRC, in the middle of the purchase agreement, was the only provision in red ink, was in a smaller font and called for...more

Hudson Cook, LLP

FTC Staff Report on Buying and Financing Cars: Part I

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In July 2020, the Federal Trade Commission (“FTC”) issued its “Staff Report on Buying and Financing Cars.” The Staff Report consisted of two separate reports – a report from the FTC’s Bureau of Consumer Protection (“BCP”)...more

McGlinchey Stafford

FTC report highlights concerns with dealer advertising and add-on products

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On July 30, 2020, the Federal Trade Commission (FTC) issued a Bureau of Consumer Protection Staff report titled Buckle Up: Navigating Auto Sales and Financing. The report includes findings from the FTC’s April 2017 study and...more

Seyfarth Shaw LLP

California DMV Finds “Care by Volvo” Subscription Service Violates State Law

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The California Department of Motor Vehicles (“DMV”) recently disclosed the results of its investigation of the “Care by Volvo” car subscription service (“CbV”) that was challenged as unlawful competition by the California New...more

Snell & Wilmer

Service Contracts Are Not Express Warranties Under the Song-Beverly Consumer Warranty Act

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In Gavaldon v. DaimlerChrysler Corp. (2004) 32 Cal. 4th 1246, the California Supreme Court found that service contracts are not express warranties under the Song-Beverly Consumer Warranty Act and the Act did not otherwise...more

Genova Burns LLC

N.J. Supreme Court Sends Auto Dealer Disputes to Arbitration

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On Wednesday, June 5, the New Jersey Supreme Court ruled in favor of enforcing arbitration agreements in car purchase agreements. The case, Goffe v. Foulke Mgmt. Corp., reverses the New Jersey Court’s recent trend of setting...more

Polsinelli

Texas Supreme Court Closes the Door to Transactional Fraud Claims Based on False Representations That Conflict With an Agreement’s...

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A recent decision from the Texas Supreme Court has closed the door for good on certain fraud and fraudulent inducement claims based on false representations that are contradicted by the parties’ agreement. In Mercedes-Benz,...more

Gray Reed

What Does a Car Dealer Case Have to do With Oil and Gas?

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In Mercedes-Benz USA, LLC, et al v. Carduco, Inc. dealership franchisee Carduco sued franchisor Mercedes Benz for fraudulent inducement and negligent misrepresentation. ...more

Carlton Fields

Third Circuit Refuses To Compel Arbitration In Light Of Alleged Fraudulent Inducement To Sign Arbitration Agreement

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The Third Circuit recently affirmed a lower court’s decision refusing car dealership defendants’ motion to compel arbitration pursuant to an arbitration agreement the plaintiffs were allegedly induced to sign. First, the...more

Carlton Fields

Circuit Court Finds Putative Class Affidavits, Combined With Other Records, May Satisfy Ascertainability Requirement

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Defendants BMW and Creditsmarts were parties to a marketing agreement through which BMW offered its direct automotive “up2drive” loans to borrowers at participating independent car dealers through Creditsmarts’ internet-based...more

Foley & Lardner LLP

Commercial Contract Risk in 2017

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Coming off a record year in car sales, it’s expected that warranty and recall costs will continue to be on the rise. With that in mind, it’s vital that OEMs and suppliers have both their foreign and domestic contracts in...more

Blake, Cassels & Graydon LLP

Bhasin Anniversary: You Gotta Have Faith?

It has been almost a year since the Supreme Court of Canada’s unanimous decision in Bhasin v. Hrynew, which was the subject of great attention and some alarm when released. What did it mean to have “good faith as an...more

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