2022 Code of Alabama
Title 8 - Commercial Law and Consumer Protection.
Chapter 20 - Dealings by Motor Vehicle Manufacturers, Wholesalers, etc., With Motor Vehicle Dealers.
Section 8-20-3 - Definitions.

Universal Citation: AL Code § 8-20-3 (2022)

Section 8-20-3


For the purpose of this chapter, the following terms shall have the meanings respectively ascribed to them in this section, except where the context clearly indicates a different meaning:

(1) COERCE. The failure to act in good faith in performing or complying with any term or provision of the franchise or dealer agreement, except that recommendation, persuasion, urging, or argument shall not be deemed to constitute a lack of good faith.

(2) DEALER AGREEMENT or FRANCHISE. The written contract between any new motor vehicle manufacturer and any new motor vehicle dealer which purports to fix the legal rights and liabilities of the parties to such agreement or contract, and pursuant to which the dealer purchases and resells the franchise product or leases or rents the dealership premises.

(3) DISTRIBUTOR or WHOLESALER. A person, whether a resident or a nonresident, other than a manufacturer, who sells or distributes motor vehicles to motor vehicle dealers or who maintains distributor representatives within the state.

(4) DISTRIBUTOR BRANCH. A branch office maintained by a distributor or wholesaler.

(5) DISTRIBUTOR REPRESENTATIVE. A representative employed by a distributor or wholesaler for the purpose of making or promoting the sale of the distributor's or wholesaler's new motor vehicles to motor vehicle dealers or for supervising or contracting the motor vehicle dealers or prospective motor vehicle dealers.

(6) FACTORY BRANCH. A branch office maintained by a manufacturer in order to direct and supervise the representatives of the manufacturer.

(7) FACTORY REPRESENTATIVE. A person employed by a manufacturer for the purpose of making or promoting the sale of the manufacturer's new motor vehicles to motor vehicle dealers or distributors or for supervising or contacting the motor vehicle dealers or prospective motor vehicle dealers.

(8) GOOD FAITH. Honesty in fact and the observation of reasonable commercial standards of fair dealing in the trade as is defined and interpreted in paragraph (1)(b) of Section 7-2-103.

(9) LINE MAKE. A collection of models, series, or groups of motor vehicles manufactured by or for a particular manufacturer, distributor, or importer offered for sale, lease, or distribution pursuant to a common brand name or mark; provided, however:

1. Multiple brand names or marks may constitute a single line make, but only when included in a common dealer agreement and the manufacturer, distributor, or importer offers such vehicles bearing the multiple names or marks together only, and not separately, to its authorized dealers; and

2. Motor vehicles bearing a common brand name or mark may constitute separate line makes when pertaining to motor vehicles subject to separate dealer agreements or when such vehicles are intended for different types of use.

(10) MANUFACTURER. Any person engaged in the manufacturing or assembling of new motor vehicles as a regular business or any person who is controlled by the manufacturer.

(11) MOTOR VEHICLE. Every vehicle intended primarily for use and operation on the public highways which is self-propelled.

(12) MOTOR VEHICLE DEALER. A person operating under a dealer agreement from a manufacturer or distributor and who is engaged regularly in the business of buying, selling, or exchanging motor vehicles in this state and who has in this state an established place of business.

(13) NET COST. The price the dealer pays for new motor vehicles, supplies, parts, equipment, signs, furnishings, and special tools, including the freight costs to the dealer's location, minus any applicable discounts obtained by the dealer.

(14) NEW MOTOR VEHICLE. A vehicle which has been sold to a new motor vehicle dealer and which has not been used for other than demonstration purposes and on which the original title has not been issued from the new motor vehicle dealer. A new motor vehicle shall also mean an engine, transmission, or rear axle manufactured for installation in a vehicle having as its primary purpose the transport of a person or persons or property on a public highway and having a gross vehicle weight rating of more than 16,000 pounds, whether or not attached to a vehicle chassis.

(15) PERSON. An individual, firm, partnership, association, joint stock company, corporation, or other legal entity or a combination of legal entities.

(16) RELEVANT MARKET AREA. The area within a radius of 20 miles around an existing dealer or the area of responsibility defined in the franchise, whichever is greater; except that, where a manufacturer is seeking to establish an additional new motor vehicle dealer and there are one or more existing new motor vehicle dealers of the same line make within a 10-mile radius of the proposed dealer site, the relevant market area shall in all instances be the area within a radius of 10 miles around an existing dealer.

(Acts 1981, No. 81-390, p. 596, §3; Acts 1981, No. 81-776, p. 1338, §16; Act 2010-198, p. 300, §1.)

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