2016 Arkansas Code
Title 4 - Business and Commercial Law
Subtitle 6 - Business Practices
Chapter 72 - Franchises
Subchapter 3 - -- Farm Equipment Retailer Franchise Protection
§ 4-72-311. Warranties

(a) This section applies to a warranty claim submitted by a dealer.

(b) (1) Claims filed for payment under warranty agreements shall either be approved or disapproved within thirty (30) days of receipt by a manufacturer, wholesaler, or distributor.

(2) All claims for payment shall be paid within thirty (30) days of their approval.

(3) (A) If a claim is disapproved, the manufacturer, wholesaler, or distributor shall notify the dealer within thirty (30) days stating the specific grounds upon which the disapproval is based.

(B) If a claim is not specifically disapproved within thirty (30) days of receipt, it shall be deemed approved and payment by the manufacturer, wholesaler, or distributor shall follow within thirty (30) days.

(4) If, after termination of a contract, the dealer submits a claim to the manufacturer, wholesaler, or distributor for warranty work performed prior to the effective date of the termination, the manufacturer, wholesaler, or distributor shall accept or reject the claim within thirty (30) days of receipt.

(5) If a claim is not paid within the time allowed under this subsection, interest shall accrue at the maximum lawful interest rate.

(c) (1) (A) Warranty work performed by the dealer shall be compensated in accordance with the reasonable and customary amount of time required to complete the work, expressed in hours and fractions of hours.

(B) The time shall be multiplied by the dealer's established customer hourly retail labor rate, which shall have previously been made known to the manufacturer, wholesaler, or distributor.

(2) Expenses expressly excluded under the warranty of the manufacturer, wholesaler, or distributor to the customer shall not be included nor required to be paid on requests for compensation from the dealer for warranty work performed.

(3) (A) All parts used by the dealer in performing the warranty work shall be paid to the dealer in the amount equal to the dealer's net price for the parts, plus a minimum of fifteen percent (15%).

(B) The additional amount is to reimburse the dealer for reasonable costs of doing business in performing the warranty service on behalf of the manufacturer, wholesaler, or distributor, including, but not limited to, freight and handling costs incurred.

(4) The manufacturer, wholesaler, or distributor has the right to adjust compensation for errors discovered during audit, and if necessary, to adjust claims paid in error.

(d) The dealer shall have the right to accept the reimbursement terms and conditions of the manufacturer, wholesaler, or distributor in lieu of the terms and conditions of this section.