2016 North Dakota Century Code
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As used in sections 51-07-01, 51-07-02.1, 51-07-02.2, 51-07-02.3, 51-07-02.4, and
51-07-03 unless the context or subject matter otherwise requires:
1. "Contract" means any written franchise agreement, sales agreement, dealer
agreement, or security agreement, or other form of agreement or arrangement of like
2. "Dealer" means a person that engages in the business of selling, at retail, new motor
vehicles or trucks or new and used motor vehicles or trucks and possesses a current
new motor vehicle dealer license as defined in section 39-22-16.
3. "Distributor" means any person who in whole or in part offers for sale, sells, or
distributes any new motor vehicle to a new motor vehicle dealer, and any person that
in whole or in part offers for sale, sells, or distributes any farm implement, machinery,
or attachment or part for the same; or lawn and garden equipment, or part for the
same; or semitrailer, or part for the same, to any person that retails all or any of these
4. "Franchise" or "franchise agreement" means any contract or addendum to a contract
between a dealer and a manufacturer or distributor that authorizes the dealer to
engage in the business of selling or purchasing any particular make of new motor
vehicles or motor vehicle parts manufactured or distributed by the manufacturer or
5. "Franchisor" means a person that manufactures, imports, or distributes new motor
vehicles and which may enter a franchise agreement.
6. "Good cause" means failure by a new motor vehicle dealer to substantially comply with
material and reasonable requirements imposed upon the new motor vehicle dealer by
the franchise agreement if the requirements are not unreasonable when compared to
those requirements imposed on other similarly situated new motor vehicle dealers.
7. "Good faith" means honesty in fact and the observance of commercially reasonable,
nondiscriminatory standards of fair dealing.
8. "Manufacturer" means any person that is engaged in the business of manufacturing or
assembling new motor vehicles or any person that in whole or in part offers for sale,
sells, or distributes any new motor vehicle to a new motor vehicle dealer.
9. "Merchandise" means farm implements, machinery, attachments, and parts for the
same; lawn and garden equipment and parts for the same; and automobiles, trucks,
and semitrailers and parts for the same.
10. "New motor vehicle" means a motor vehicle that has not been subject to a retail sale,
the registration provisions of chapter 39-04, the title registration provisions of chapter
39-05, or the motor vehicle excise tax provisions of chapter 57-40.3.
11. "Owner" means a person, other than a lienholder, having the property in or title to a
vehicle. The term includes a person entitled to the use and possession of a vehicle
subject to a security interest in another person, but excludes a lessee under a lease
not intended as security.
12. "Semitrailer" includes every vehicle of the trailer type so designed and used in
conjunction with a truck that some part of its own weight and that of its own load rests
upon or is carried by a truck, except that it does not include a mobile home.
13. "Successor" means the individual who, in the case of the owner's death, is entitled to
inherit the ownership interest in the new motor vehicle dealership or who, in the case
of an incapacitated owner of a new motor vehicle dealer, has been appointed by a
court as the legal representative of the new motor vehicle dealer's property subject to
sections 51-07-26 and 51-07-26.1.
14. "Truck" includes every motor vehicle designed, used, or maintained primarily for
transportation of property or designed and used primarily for drawing other vehicles
and not so constructed as to carry a load other than a part of the weight of the vehicle
and load so drawn.
Page No. 1
"Used motor vehicle" means a motor vehicle that has been subject to a retail sale, the
registration provisions of chapter 39-04, the title registration provisions of
chapter 39-05, or the motor vehicle excise tax provisions of chapter 57-40.3.
51-07-01. Retail farm implement; lawn and garden equipment; or vehicle dealer may
recover price of merchandise upon discontinuance of contract by wholesaler or retail
1. If a person engaged in the business of retailing farm implements, machinery, or
attachments, or parts for the same; lawn and garden equipment, or parts for the same;
or automobiles, trucks, or semitrailers, or parts for the same, enters a contract under
which the retailer agrees to maintain a stock of the merchandise covered under this
section with a wholesaler, manufacturer, or distributor of the covered merchandise and
tools and the wholesaler, manufacturer, or distributor or the retailer desires to cancel or
discontinue the contract, the wholesaler, manufacturer, or distributor shall pay to the
retailer, unless the retailer desires to keep the merchandise, a sum equal to:
a. One hundred percent of the net cost of all current unused complete farm
implements, machinery, and attachments; lawn and garden equipment; and
automobiles, trucks, and semitrailers.
b. One hundred percent of the actual merchandise and tool transportation charges
that have been paid by the retailer.
c. Ninety percent of the net prices on parts, including superseded parts, as shown in
the manufacturer's, wholesaler's, or distributor's current price lists or catalogs in
effect at the time the contract is canceled, discontinued, or not renewed. These
parts must have previously been purchased from the wholesaler, manufacturer, or
distributor, and must have been either held by the retailer on the date of the
cancellation of, discontinuance of, or failure to renew the contract or received by
the retailer from the wholesaler, manufacturer, or distributor after the date of the
cancellation, discontinuance, or failure to renew.
d. Fifty percent of the net cost of all complete specialized tools for the covered
e. Five percent of the current net price of all parts returned for the handling, packing,
and loading of the parts back to the wholesaler, manufacturer, or distributor.
2. Upon the payment of the amounts under subsection 1, the retailer shall pass the title
to the covered merchandise and tools to the manufacturer, wholesaler, or distributor
making the payment, and the manufacturer, wholesaler, or distributor is entitled to the
possession of the covered merchandise and tools. All payments required to be made
under this section must be made within thirty days after the final settlement between
the retailer and the wholesaler, manufacturer, or distributor.
3. The provisions of this section are supplemental to any agreement between the retailer
and the manufacturer, wholesaler, or distributor covering the return of any
merchandise and tools covered under this section. The retailer can elect to pursue
either the retailer's contract remedy or the remedy provided in this section. An election
by the retailer to pursue the retailer's contract remedy does not bar the retailer's right
to the remedy provided in this section as to any merchandise and tools covered under
this section which is not affected by the contract remedy.
4. The obligations of any wholesaler, manufacturer, or distributor under this section and
sections 51-07-01.1 and 51-07-03 apply to any successor in interest or assignee of
that wholesaler, manufacturer, or distributor. A successor in interest includes any
purchaser of assets or stock, any surviving corporation or limited liability company
resulting from a merger or liquidation, any receiver, or any trustee of the original
wholesaler, manufacturer, or distributor.
5. The provisions of this section apply to all contracts now in effect which have no
expiration date and are a continuing contract, and all other contracts entered or
renewed after July 31, 2003. Any contract in force and effect on August 1, 2003, which
by its own terms will terminate on a date subsequent thereto is governed by the law as
it existed before August 1, 2003.
Page No. 2
51-07-01.1. Termination of retail contract to be done in good faith - Definition of good
1. Any manufacturer, wholesaler, or distributor of merchandise and tools covered under
section 51-07-01, excluding automobile dealers, truck dealers, or parts dealers of the
automobiles or trucks, that enters a contract with any person engaged in the business
of retailing the covered merchandise by which the retailer agrees to maintain a stock of
the covered merchandise may not terminate, cancel, or fail to renew the contract with
the retailer without good cause.
2. For the purpose of this section, good cause for terminating, canceling, or failing to
renew a contract is limited to failure by the retailer to substantially comply with those
essential and reasonable requirements imposed by the contract between the parties if
the requirements are not different from those requirements imposed on other similarly
situated retailers. The determination by the manufacturer, wholesaler, or distributor of
good cause for the termination, cancellation, or failure to renew must be made in good
3. In any action against a manufacturer, wholesaler, or distributor for violation of this
section, the manufacturer, wholesaler, or distributor shall establish that the termination,
cancellation, or failure to renew was made in good faith for good cause. If a notice of
termination is issued and the dealer challenges the notice by filing an action, there is
an automatic stay during the pendency of the action. If the manufacturer, wholesaler,
or distributor fails to establish good cause for its action, the manufacturer, wholesaler,
or distributor is liable for all special and general damages sustained by the plaintiff,
including the costs of the litigation and reasonable attorney's fees for prosecuting the
action and the plaintiff, if appropriate, is entitled to injunctive relief. This section applies
to all contracts now in effect which have no expiration date and are continuing
contracts and all other contracts entered, amended, or renewed after July 31, 2003.
Any contract in force and effect on August 1, 2003, which by its terms will terminate on
a date subsequent thereto is governed by the law as it existed before August 1, 2003.
51-07-01.2. Prohibited practices under farm equipment dealership contracts.
A manufacturer, wholesaler, or distributor of farm implements, machinery, or repair parts
who enters into a contract with any person engaged in the business of selling and retailing farm
implements and repair parts for farm implements may not:
1. Coerce or attempt to coerce the farm equipment dealer to accept delivery of farm
equipment, parts, or accessories that the farm equipment dealer has not voluntarily
2. Condition or attempt to condition the sale of farm equipment on a requirement that the
farm equipment dealer also purchase other goods or services, except that a farm
equipment manufacturer may require the dealer to purchase all parts reasonably
necessary to maintain the quality of operation in the field of any farm equipment used
in the trade area and telecommunication necessary to communicate with the farm
3. Coerce or attempt to coerce a farm equipment dealer into a refusal to purchase farm
equipment manufactured by another farm equipment manufacturer.
4. Discriminate in the prices charged for farm equipment of like grade and quality sold by
the farm equipment manufacturer to similarly situated farm equipment dealers. This
subsection does not prevent the use of differentials that make only due allowance for
differences in the cost of manufacture, sale, or delivery or for the differing methods or
quantities in which the farm equipment is sold or delivered by the farm equipment
manufacturer. This section does not diminish the manufacturer's, wholesaler's, or
distributor's ability to provide volume discounts, bonuses, or special machine ordering
programs commonly used in the industry.
5. Attempt or threaten to terminate, cancel, fail to renew, or substantially change the
competitive circumstances of the dealership contract for any reason other than failure
of the farm equipment dealer to comply with the terms of the written contract between
the parties or if the attempt or threat is based on the results of a circumstance beyond
Page No. 3
the farm equipment dealer's control, including a sustained drought or other natural
disaster in the dealership market area or a labor dispute.
51-07-02. Prices of implements, machinery, automobiles, and parts - How determined.
Repealed by S.L. 2003, ch. 435, § 4.
51-07-02.1. Change in automobile or truck franchise agreement - Notification
1. At least ninety days before any change in or from an existing contract which will
substantially impair the sales, the service obligations, or investment of a retailer of
automobiles or trucks, or parts of the automobiles or trucks, the manufacturer,
wholesaler, or distributor that is a party to the contract shall give notice by certified mail
to the retailer of the intended change and the specific grounds for the change.
2. If the manufacturer, wholesaler, or distributor fails to give the proper notice under
subsection 1, the change is voidable at the option of the retailer.
3. A contract between a manufacturer, wholesaler, or distributor and a retailer of
automobiles or trucks, or parts of the automobiles or trucks, is offered for automatic
renewal under the same terms unless notice is provided under subsection 1.
4. A retailer may file an action against the manufacturer, wholesaler, or distributor for
violation of this section or for a determination of whether the action proposed by the
manufacturer, wholesaler, or distributor is an unfair or a prohibited change in or from
the contract. Contracts and certificates of appointment continue in effect until final
determination of the issues in the action.
5. A change in or from a contract is unfair and prohibited if the change is not clearly
permitted by the agreement; is not taken in good faith; is not taken for good cause; is
based on an alleged breach of the agreement which is not in fact a material and
substantial breach; or, if the grounds relied on for the change have not been applied in
a uniform and consistent manner by the manufacturer, wholesaler, or distributor. Good
faith means honesty in fact and fair dealing. The manufacturer, wholesaler, or
distributor shall have the burden of proof that any action taken by the manufacturer,
wholesaler, or distributor is fair and not prohibited. A manufacturer, wholesaler, or
distributor that fails to carry the burden of proof is liable for all special and general
damages sustained by the retailer, including the costs of litigation and reasonable
attorney's fees. If appropriate, the retailer is entitled to injunctive relief.
51-07-02.2. Dealership transfers.
A retailer of automobiles or trucks, or parts for the automobiles or trucks, may not transfer,
assign, or sell a franchise agreement to another person unless the retailer first provides written
notice to the franchisor of the intended action. Within sixty days of receiving the notice, the
franchisor must approve or deny the action. If the franchisor denies the action, the franchisor
shall provide material reasons for the denial to the franchisee. If the franchisor does not respond
within the sixty-day period, the action is deemed approved. The refusal by the franchisor to
accept a proposed transferee who meets the written, reasonable, and uniformly applied
standards of qualifications of the franchisor relating to the financial qualifications of the
transferee and business experience of the transferee is presumed to be unreasonable. If an
action is rejected by the franchisor, the franchisee may file an action for determination of a
violation of this section. The retailer may elect to pursue either the retailer's remedy under the
contract or the remedy provided in this section. The franchisor has the burden of proof with
respect to all issues raised in the action. The court shall approve the transfer unless the
franchisor can prove the proposed transferee does not meet the written, reasonable, and
uniformly applied standards regarding financial qualifications and business experience.
Page No. 4
51-07-02.3. Prohibited acts.
A manufacturer, wholesaler, or distributor of automobiles or trucks, or parts of the
automobiles or trucks, that enters a contract with any person engaged in the business of selling
or retailing automobiles, trucks, or parts for the automobiles or trucks, may not:
1. Coerce or attempt to coerce the retailer into accepting delivery of automobiles, trucks,
parts, or accessories that the retailer has not ordered voluntarily.
2. Condition or attempt to condition the sale of automobiles or trucks on a requirement
that the automobile or truck retailer purchase other goods or services, except that the
manufacturer, wholesaler, or distributor may require a retailer to purchase all parts
reasonably necessary to maintain the quality of operation and telecommunications
necessary to communicate with the manufacturer, wholesaler, or distributor.
3. Implement or establish a system of motor vehicle allocation or distribution to one or
more of its dealers that is unfair, inequitable, or unreasonably discriminatory. As used
in this subsection, "unfair" includes requiring a dealer to accept new vehicles not
ordered by the dealer or the refusal or failure to offer to any dealer all models offered
to any of its other same line-make dealers in this state. The failure to deliver any motor
vehicle is not a violation of this section if failure is due to any cause over which the
manufacturer does not have control.
4. Require a dealer to pay all or any part of the cost of an advertising campaign or
contest or purchase any promotional material, showroom, or other display decoration
or material at the expense of the dealer.
5. Coerce or attempt to coerce an automobile or truck retailer into not carrying dual lines
or into maintaining separate facilities as long as the retailer's facilities otherwise satisfy
the reasonable requirements of the manufacturer, wholesaler, or distributor.
6. Require a retailer to either establish or maintain exclusive facilities, personnel, or
display space or to abandon an existing franchise relationship with another
manufacturer in order to continue, renew, reinstate, or enter a franchise agreement or
to participate in any program discount, credit, rebate, or sales incentive. This
subsection does not apply to a program that is in effect with more than one dealer in
this state on April 20, 2011, or to a renewal or modification of the program.
7. Unreasonably prevent or refuse to approve the relocation of a dealership to another
site within the dealer's relevant market area. The dealer shall provide the manufacturer
or distributor with notice of the proposed address and a reasonable site plan of the
proposed location. The manufacturer or distributor shall approve or deny the request in
writing within sixty days after receipt of the request, and failure to deny the request
within sixty days is deemed approval.
8. Require the retailer to unreasonably remodel, renovate, or recondition the retailer's
facilities, change the location of the facilities, or make unreasonable alterations to the
9. Discriminate in the prices charged for automobiles or trucks of like grade and quality
sold by automobile or truck manufacturers to similarly situated automobile or truck
retailers. This prohibition does not prevent the use of differentials that solely make due
allowance for differences in the cost of manufacture, sale, or delivery or for differing
methods or quantities in which the automobiles or trucks are sold or delivered by the
manufacturer, wholesaler, or distributor.
10. Refuse or fail to offer any incentive program, bonus payment, holdback margin, or any
other mechanism that effectively lowers the net cost of a vehicle to any franchised
dealer in this state if the incentive, bonus, or holdback is available or made to one or
more same line-make dealers in this state.
11. Attempt or threaten to terminate, cancel, or fail to renew, or substantially change the
competitive circumstances of the dealership contracts for any reason other than the
failure of the automobile or truck retailer to comply with the terms of the contract
between the parties, if the attempt or threat is based on the results of a circumstance
beyond the retailer's control, including a natural disaster in the dealership market area
or a labor dispute.
Page No. 5
Require a dealer in this state to enter any agreement to assent to a release,
assignment, novation, waiver, or estoppel in which a dealer relinquishes any rights
under this state's law, or which would relieve any person from liability imposed by this
state's law unless done in connection with a settlement agreement to resolve a matter
between a manufacturer and the dealer. The settlement agreement must be entered
voluntarily for separate and valuable consideration, and the renewal, reinstatement, or
continuation of a franchise agreement alone does not constitute separate and valuable
Require any dealer in this state to enter any agreement with the manufacturer or any
other party which requires the law of another jurisdiction to apply to any dispute
between the dealer and manufacturer, requires that the dealer bring an action against
the manufacturer in a venue outside of this state, in any way purports to waive any
dealer's right to have all of this state's statutory and common law apply, shortens or
otherwise modifies or eliminates any dealer's right to resolve any dispute with a
manufacturer in a state or federal court in this state, or requires the dealer to agree to
arbitration or waive its rights to bring a cause of action against the manufacturer,
unless done in connection with a settlement agreement to resolve a matter or pending
dispute between a manufacturer and the dealer. This settlement agreement must be
entered voluntarily for separate and valuable consideration and renewal,
reinstatement, or continuation of a franchise agreement alone is not separate and
51-07-02.4. Warranty and incentive claims.
1. A manufacturer may not conduct a warranty or incentive audit or seek a chargeback
on a warranty or incentive payment more than one year after the date of that warranty
or incentive payment.
2. A manufacturer may not charge back a dealer for an incentive or warranty payment
unless the manufacturer can satisfy its burden of proof that the dealer's claim was
false, fraudulent, or the dealer did not substantially comply with the reasonable written
procedures of the manufacturer.
3. The audit and chargeback provisions of this section apply to all other incentive and
reimbursement programs that are subject to audit by the manufacturer. This section
does not apply to fraudulent claims.
51-07-03. Failure to pay sum specified on cancellation of contract - Liability.
If a manufacturer, wholesaler, or distributor of merchandise and tools covered under
section 51-07-01, upon cancellation of a contract by either a retailer or a manufacturer,
wholesaler, or distributor, fails or refuses to make payment to the retailer as is required by
section 51-07-01, or refuses to supply covered merchandise or tools to any retailer of the
merchandise, who may have a retail sales contract dated after July 31, 2003, or a contract with
no expiration date or a continuing contract in force or effect on August 1, 2003, with the
manufacturer, wholesaler, or distributor, the manufacturer, wholesaler, or distributor is liable in a
civil action to be brought by the retailer for the amounts provided under subsection 1 of
section 51-07-01. The obligations of any wholesaler, manufacturer, or distributor apply to any
successor in interest or assignee of that wholesaler, manufacturer, or distributor. A successor in
interest includes any purchaser of assets or stock, any surviving corporation or limited liability
company resulting from a merger or liquidation, any receiver, or any trustee of the original
wholesaler, manufacturer, or distributor.
51-07-04. Selling goods bearing counterfeit trademark - Penalty.
Every person who, with intent to represent such goods as the genuine goods of another,
sells or keeps for sale any goods upon which any counterfeit trademark has been affixed,
knowing the same to be counterfeited, is guilty of a class A misdemeanor. The word "goods" as
used in this section includes every kind of goods, wares, merchandise, compound, or
preparation, which may be kept or offered for sale lawfully.
Page No. 6
51-07-04.1. Defacing, destroying, or altering serial numbers on farm machinery Penalty.
It is unlawful for any person to willfully:
1. a. Deface, destroy, alter, or remove the serial number on any tractor, combine,
cornpicker, or any other heavy farm machinery that carries a factory serial
b. Place or stamp other than the original serial number upon any tractor, combine,
cornpicker, or any other heavy farm machinery that carries a factory serial
2. Sell or offer for sale any such heavy farm machinery bearing an altered or defaced
serial number other than the original.
Any person who violates this section is guilty of a class C felony.
51-07-05. Goods defined.
Repealed by omission from this code.
51-07-06. Money warranted genuine on exchange of money.
Repealed by omission from this code.
51-07-07. Reasonable time to discover defects in engine or machinery - Rescinding
contract - When contract void.
Repealed by S.L. 2001, ch. 447, § 7.
51-07-08. Manufacturers of tractors, engines, farm machinery, and automobiles,
firefighting equipment and fire extinguishers, to maintain supply depot in state - Penalty.
Repealed by S.L. 1975, ch. 106, § 673.
51-07-09. Waiving, releasing, or barring of claim for relief before it actually has
A claim for relief arising out of the sale of personal property cannot be waived, released, or
barred before the claim for relief actually has accrued, notwithstanding any terms or provisions
of any contract or other written instrument to the contrary.
51-07-10. Conditional sales must be in writing and filed.
Repealed by S.L. 1965, ch. 296, § 32.
51-07-11. Property sold under conditional sale contract not attached, repossessed, or
acquired until taxes paid.
When personal property has been sold under a conditional sale contract and such contract
has been canceled or foreclosed, the owner, holder, or assignee of such contract may not
attach, repossess, or acquire by bill of sale the property sold under the contract until the taxes
levied upon such property have been paid as follows:
1. For property other than mobile homes subject to tax under chapter 57-55, all taxes
levied upon the property must be paid in full.
2. For mobile homes subject to tax under chapter 57-55, the tax levied upon the property
for the current year and the most recent preceding year must be paid in full.
51-07-12. Automobile sales finance contracts - Information of insurance protection to
be given - Warning required - Penalty.
1. Purchasers of automobiles under sales finance contracts, when required by a dealer,
bank, or other finance agency or company, to furnish insurance on any motor vehicle,
in connection with the financing of such motor vehicle, must be furnished by the seller
evidence of the insurance protection. Such insurance evidence must be in the form of
a regular insurance binder or policy or certificate of insurance. The original policy or
certificate of insurance clearly stating the coverage afforded by the policy must be
Page No. 7
delivered to the purchaser within a reasonable time after execution of the insurance
order. The certificate must display the premium charged for each coverage afforded.
If the insurance required by any dealer, bank, or other finance agency or company
does not provide insurance for bodily injury liability or property damage liability, then
the insurance policy or the certificate of insurance, if the policy is filed with the payee,
must have imprinted or stamped on the policy or certificate a notice that the policy
does not include bodily injury liability or property damage liability insurance. The
imprinting or stamping of such notice must be in the manner or form as may be
approved by the insurance commissioner.
Any person failing to comply with the provisions of this chapter is guilty of a class B
51-07-13. Labeling imported meats sold - Penalty.
1. No person may knowingly sell or offer for sale in the state of North Dakota any meat,
whether fresh, frozen, cured, or processed, which is imported from outside the
boundaries of the United States or any meat product containing in whole or in part
such imported meat, if this fact is not shown by labels or printing on each quarter, half,
or whole carcass of such meat, or on each case, package, can, tray, or display
containing such imported meat.
2. Any person who violates any of the provisions of this section is guilty of a class B
51-07-14. Maximum amount of service charge which wholesalers and manufacturers
may charge on overdue accounts.
Wholesalers and manufacturers, when selling to retailers or other persons, may charge a
service charge of up to one and one-half percent per month on the remaining balance of all
overdue accounts, provided the parties have entered into a written agreement prior to the
transaction setting forth the amount of service charge, computed on the basis of simple interest
per annum. The wholesaler or manufacturer shall inform the purchaser in writing at the time of
the purchase of the service charge which will be charged if the account becomes overdue. The
service charge allowed in this section is allowed on any such purchase on or after July 1, 1971.
51-07-15. Use of electronic or magnetic scanners in retail foodstores - Item pricing
required - Exceptions - Penalty.
Except as otherwise provided in this section, every retail foodstore which uses electronic or
magnetic scanners to read prices shall clearly post the selling price of each item in Arabic
numerals, by stamp, tag, label, or other conspicuous marking device. If a product is packaged
for sale in quantities of more than one, the total price must be posted. The posting must be by a
label securely affixed on each item or by a label posted on the shelf edge immediately below or
above the item. Compliance with this section is not required for items not marked in accordance
with a uniform products code or any similar marking system designed to be scanned by
electronic or magnetic checkout equipment. Any person who violates this section is guilty of an
As used in sections 51-07-16 through 51-07-22, and unless the context otherwise requires:
1. "Consumer" means the purchaser or lessee, other than for purposes of resale or
lease, of a passenger motor vehicle normally used for personal, family, or household
purposes. The term includes any person to whom the passenger motor vehicle is
transferred for the same purposes during the duration of an express warranty
applicable to that passenger motor vehicle, and any other person entitled by the terms
of the warranty to enforce the obligations of the warranty.
2. "Passenger motor vehicle" means a passenger motor vehicle as defined in section
39-01-01 or a truck with registered gross weight of ten thousand pounds [4536
Page No. 8
kilograms] or less which is sold or leased in this state. The term does not include a
house car, as defined in section 39-01-01.
51-07-17. Duty of manufacturer to repair defective passenger motor vehicles.
If a new passenger motor vehicle does not conform to all applicable express warranties,
and the consumer reports the nonconformity to the manufacturer, its agent, or its authorized
dealer during the term of the express warranties or during the period of one year following the
date of original delivery of the passenger motor vehicle to a consumer, whichever is the earlier
date, the manufacturer, its agent, or its authorized dealer shall make the repairs necessary to
conform the passenger motor vehicle to the express warranties, notwithstanding the fact that
the repairs might be made after the expiration of the warranty or one-year period.
51-07-18. Duty to replace defective passenger motor vehicle or refund price Prerequisite of using available informal dispute settlement process.
1. If the manufacturer, its agent, or its authorized dealer is unable to make the passenger
motor vehicle conform to any applicable express warranty by repairing or correcting
any defect or condition that substantially impairs the use and market value of the
passenger motor vehicle, after a reasonable number of attempts, the manufacturer
shall replace that passenger motor vehicle with a comparable passenger motor vehicle
or accept return of the passenger motor vehicle from the consumer, and refund to the
consumer the full purchase price, including all collateral charges, less a reasonable
allowance for the consumer's use of the vehicle not exceeding ten cents per mile [1.61
kilometers] driven or ten percent of the purchase price, whichever is less. Refunds
must be made to the consumer, the lessor, and the lienholder, if any, as their interests
may appear. A reasonable allowance for use is the amount directly attributable to use
by the consumer before the consumer's first report of the nonconformity to the
manufacturer, agent, or dealer, and during any subsequent period when the vehicle is
not out of service for repair.
2. It is an affirmative defense to any claim under sections 51-07-16 through 51-07-22:
a. That an alleged nonconformity does not substantially impair the use and market
value of the passenger motor vehicle; or
b. That a nonconformity is the result of abuse, neglect, or unauthorized
modifications or alterations of the passenger motor vehicle by a consumer.
3. If a manufacturer has established or participates in an informal dispute settlement
procedure that substantially complies with the substantive rules of the federal trade
commission, 16 CFR 703, or if the manufacturer participates in a consumer and
industry appeals, arbitration, or mediation appeals board whose decisions are binding
on the manufacturer, the remedy under subsection 1 is not available to a consumer
who has not first resorted to that procedure. If the consumer requests an oral
presentation before the board or dispute settlement mechanism, the hearing must take
place in the state in which the consumer resides. The attorney general shall, on
application, issue a determination of whether an informal dispute resolution
mechanism qualifies under this subsection.
51-07-18.1. Refunds for leased passenger motor vehicles.
In any case in which a refund is tendered by a manufacturer for a leased motor vehicle
under section 51-07-18, the refund and rights of the motor vehicle lessor, lessee, and
manufacturer are as follows:
1. The manufacturer shall provide to the lessee the sum of all payments previously paid
to the motor vehicle lessor by the lessee less a reasonable allowance for the
consumer's use of the vehicle. Payments include all cash payments, security deposits,
and trade-in allowance, if any, tendered by the lessee to the motor vehicle lessor under
the lease agreement.
2. The manufacturer shall provide to the motor vehicle lessor the sum of the following:
a. The lessor's actual purchase cost, less payments made by the lessee;
Page No. 9
The freight cost, if applicable;
The cost for dealer or manufacturer installed accessories, if applicable; and
An amount equal to five percent of the lessor's actual purchase cost as provided
in subdivision a. The amount in this subdivision is in lieu of any early termination
costs or penalties described in the lease agreement.
Upon return of the passenger motor vehicle, the consumer's lease agreement with the
lessor is terminated and no penalty for early termination may be assessed.
Any refund to be paid to the motor vehicle lessor must be made to the lessor and
lienholder, if any, as their interests may appear.
1. It is presumed that a reasonable number of attempts have been undertaken to make a
passenger motor vehicle conform to the applicable express warranties, if:
a. The same nonconformity has continued to exist, despite having been subject to
repair more than three times by the manufacturer, its agent, or its authorized
dealer, within the express warranty term or within one year of the date of original
delivery of the passenger motor vehicle to a consumer, whichever is the earlier
b. The passenger motor vehicle is out of service for repair for a cumulative total of at
least thirty business days during the warranty term or in a year, whichever is less.
2. The term of an express warranty, the one-year period and the thirty-day period, are
extended by any period during which repair services are not available to the consumer
because of war, invasion, strike, fire, flood, or other natural disaster.
3. The presumption does not apply against a manufacturer unless the manufacturer has
received prior direct notification from or on behalf of the consumer and an opportunity
to cure the alleged defect.
51-07-20. Exclusive remedy.
A consumer who elects to proceed under sections 51-07-16 through 51-07-22 is foreclosed
from pursuing any other remedy arising out of the facts and circumstances which gave rise to
the claim under sections 51-07-16 through 51-07-22.
51-07-21. Limitation of actions.
An action brought under sections 51-07-16 through 51-07-22 must be commenced within
six months after the earlier of:
1. Expiration of the express warranty term; or
2. Eighteen months after the date of original delivery of the passenger motor vehicle to a
51-07-22. Resale of returned passenger motor vehicles - Penalty.
1. A person may not sell or lease in this state a passenger motor vehicle that was
returned to the manufacturer in accordance with sections 51-07-16 through 51-07-22,
unless the manufacturer provides:
a. The same express warranty it provided to the original purchaser, except the term
of the warranty must be for at least twelve thousand miles or twelve months after
the date of resale, whichever is earlier; and
b. The purchaser a statement on a separate document that must be signed by the
manufacturer and the purchaser and must be in ten-point, capitalized type, in
substantially the following form: "IMPORTANT: THIS VEHICLE WAS RETURNED
TO THE MANUFACTURER BECAUSE DEFECTS COVERED BY THE
MANUFACTURER'S EXPRESSED WARRANTY WERE NOT REPAIRED
WITHIN A REASONABLE TIME AS PROVIDED BY NORTH DAKOTA LAW".
2. A person may not ship or deliver for resale or lease in another state a passenger motor
vehicle returned to the manufacturer in accordance with sections 51-07-16 through
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51-07-22 unless full disclosure of the reasons for return is made to any prospective
Violation of this section is a class B misdemeanor.
51-07-23. Unsolicited telefacsimile advertising.
It is unlawful for any person to initiate the unsolicited transmission of a telefacsimile
message promoting a good or service for purchase by the recipient of the message. The term
"telefacsimile" as used in this section means any process in which an electronic signal is
transmitted by telephone line for conversion into written text. This section does not apply to a
telefacsimile message sent to a recipient with whom the initiator has had a prior contractual or
business relationship, nor does it apply to transmissions not exceeding two pages which are
transmitted between the hours of nine p.m. and six a.m. Notwithstanding the above, it is
unlawful to initiate a telefacsimile message to a recipient who has previously sent a written or
telefacsimile message to the initiator clearly indicating that the recipient does not want to
receive any telefacsimile from the initiator. A person who transmits an unsolicited telefacsimile
message in violation of this section is liable to the recipient of that message for fifty dollars per
month for each month in which the recipient receives the unsolicited message.
51-07-24. Insurance claims for excessive charges - Penalty.
1. A person who sells goods or services paid for by the consumer from proceeds of an
insurance policy that provides coverage for physical damage to automobiles may not:
a. Advertise or promise to provide a good or service as an incentive, pay or waive
all or part of any applicable insurance deductible, or pay a rebate in an amount
equal to all or part of any applicable insurance deductible; or
b. Knowingly charge an amount for the good or service that exceeds the usual and
customary charge by that person for the good or service by an amount equal to or
greater than all or part of the applicable insurance deductible paid by that person
on behalf of an insured or remitted to an insured by that person as a rebate.
2. A person who is insured under an insurance policy that provides coverage for physical
damage to automobiles may not knowingly submit a claim under the policy based on
charges that are in violation of subsection 1 or may not knowingly allow a claim in
violation of subsection 1 to be submitted, unless the person promptly notifies the
insurer of the excessive charges.
3. A violation of this section is a class B misdemeanor.
51-07-25. Motor vehicle fuel franchise agreements.
A motor vehicle fuel franchise agreement may not require a security deposit except for the
purpose of securing against loss of or damage to property. The dealer may satisfy any security
deposit required by depositing cash or pledging a savings account or its equivalent in a financial
institution in this state. Earnings accruing on a savings account or its equivalent are the property
of the dealer and the dealer may withdraw the earnings annually from the account.
51-07-26. Succession to ownership of an automobile, truck, or farm equipment
1. The owner of an automobile, truck, or farm equipment dealership may appoint by trust,
will, or any other valid written instrument a successor to the owner's dealership interest
upon the owner's death or incapacity.
2. Unless the manufacturer, wholesaler, or distributor has good cause to refuse to honor
the succession, the successor may succeed to the ownership of the dealership under
the existing franchise if:
a. Within ninety days of the owner's death or incapacity, the successor gives written
notice of the successor's intent to succeed to ownership of the dealership; and
b. The successor agrees to be bound by all the terms and conditions of the
franchise agreement with the prior owner.
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Upon request, the successor shall promptly provide the manufacturer, wholesaler, or
distributor evidence of the successorship appointment, as well as personal and
financial information reasonably necessary to determine whether the succession
should be honored by the manufacturer, wholesaler, or distributor.
51-07-26.1. Refusal to honor succession.
1. If a manufacturer, wholesaler, or distributor believes that good cause exists to refuse to
honor the intended succession under section 51-07-26, then the manufacturer,
wholesaler, or distributor shall serve the named successor written notice of refusal to
honor the intended succession within sixty days of its receipt of the notice of the
intended succession. The notice must contain specific grounds for the refusal to honor
2. If notice of refusal to honor the intended succession is not timely served upon the
intended successor, the successor may continue the franchise subject only to
termination as permitted otherwise in this chapter.
3. In determining whether good cause exists for the refusal to honor the intended
succession, the manufacturer, wholesaler, or distributor has the burden of proving that
the intended successor is not a person of good moral character or does not meet the
franchisor's existing and reasonable standards. Good cause for refusal to honor
succession does not include the owner's dealership being dualed with another
51-07-27. Restrictions on electronically printed credit card receipts - Penalty.
Except as otherwise provided under this section, a person that accepts credit cards for the
transaction of business and also electronically prints receipts for these credit card transactions
may not print on the receipt provided to the customer more than the last five digits of the credit
card account number nor print on the receipt provided to the customer the expiration date of the
credit card. This section does not apply to a credit card transaction in which the sole means of
recording the customer's credit card number is by handwriting or by an imprint or copy of the
credit card. This section becomes operative on January 1, 2004, with respect to any cash
register or other machine or device that electronically prints receipts for credit card transactions
which is first put into use after December 31, 2003. This section becomes operative on
January 1, 2007, with respect to any cash register or other machine or device that electronically
prints receipts for credit card transactions which is first put into use before January 1, 2004. A
person who violates this section is guilty of a class B misdemeanor.
51-07-28. Recording devices on motor vehicles - Disclosure - Removal.
1. A manufacturer of a new motor vehicle sold or leased in this state which is equipped
with a recording device commonly referred to as an event data recorder shall disclose
by model year 2007 the presence, capacity, and capabilities of the event data recorder
in the owner's manual for the vehicle. A motor vehicle dealer shall include within the
purchase contract in a clear and conspicuous manner information on the possibility of
a recording device. As used in this section, an event data recorder means a feature
that is installed by the manufacturer of the vehicle and does any of the following for the
purpose of retrieving data:
a. Records the speed of the vehicle and the direction the motor vehicle is traveling.
b. Records vehicle location data.
c. Records steering performance.
d. Records brake performance, including whether brakes were applied before an
e. Records the driver's safety belt status.
f. Has the ability to transmit information concerning an accident in which the vehicle
has been involved to a central communications system when an accident occurs.
2. Data recorded on an event data recorder may not be downloaded or otherwise
retrieved by a person other than the owner of the motor vehicle at the time the data is
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recorded, or through consent by the owner's agent or legal representative, except
under any of the following circumstances:
a. The data is retrieved for the purpose of improving motor vehicle safety, including
for medical research of the human body's reaction to motor vehicle accidents,
and the identity of the registered owner or driver is not disclosed in connection
with that retrieved data. The disclosure of the vehicle identification number, with
the last four digits deleted, for the purpose of improving vehicle safety, including
for medical research of the human body's reaction to motor vehicle accidents,
does not constitute the disclosure of the identity of the registered owner or driver.
A person authorized to download or otherwise retrieve data from a recording
device under this subdivision may not release that data, except to share the data
among the motor vehicle safety and medical research communities to advance
motor vehicle safety, and only if the identity of the registered owner or driver is
b. The data is retrieved by a licensed motor vehicle dealer or by an automotive
technician for the purpose of diagnosing, servicing, or repairing the motor vehicle.
c. By stipulation of the parties to the proceeding or by order of the court.
"Owner" means a person having all the incidents of ownership, including the legal title
of a vehicle regardless of whether the person lends, rents, or creates a security
interest in the vehicle; a person entitled to the possession of a vehicle as the
purchaser under a security agreement; or the person entitled to possession of the
vehicle as lessee pursuant to a written lease agreement, if the agreement at inception
is for a period in excess of three months.
A person, including a service or data processor operating on behalf of the person,
authorized to download or otherwise retrieve data from an event data recorder
pursuant to subdivision a of subsection 2 may not release that data except for the
purposes of motor vehicle safety and medical communities to advance motor vehicle
safety, security, or traffic management; or to a data processor solely for the purposes
permitted by this subsection and only if the identity of the owner or driver of the vehicle
is not disclosed.
If a motor vehicle is equipped with a recording device that is capable of recording or
transmitting information relating to vehicle location data or concerning an accident to a
central communications system and that capability is part of a subscription service, the
fact that the information may be recorded or transmitted must be disclosed in the
terms and conditions of the subscription service. Subsection 2 does not apply to a
subscription service that meets the requirements of this subsection.
An insurer may not require as a condition of insurability consent of the owner for
access to data that may be stored within an event data recorder and may not use data
retrieved with the owner's consent before or after an accident for the purpose of rate
51-07-29. Warranty work compensation.
1. A motor vehicle manufacturer shall include reasonable compensation for diagnostic
work, as well as repair service, parts, and labor, in warranty work compensation. In
addition, a motor vehicle manufacturer shall provide adequate time allowances for
diagnosis and performance of warranty work and service for the work performed. The
hourly labor rate paid by a motor vehicle manufacturer to the dealer for warranty
services may not be less than the average rate charged by the dealer for like service
to nonwarranty customers for nonwarranty service as provided under subsection 5. A
motor vehicle manufacturer may not reimburse a dealer for parts used in the
performance of warranty repair at a lower rate than the average retail rate customarily
charged by the dealer for these parts as provided under subsection 4.
2. A motor vehicle manufacturer shall pay a dealer on a claim made by a dealer under
this section within thirty days of the approval of the claim. The manufacturer shall
either approve or disapprove a claim within thirty days after the claim is submitted to
the manufacturer. The manufacturer may prescribe the manner in which and the forms
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on which the dealer must present the claim. A claim not specifically disapproved in
writing within thirty days after the manufacturer receives the claim must be construed
to be approved and the manufacturer shall pay the claim within thirty days.
A motor vehicle manufacturer, factory branch, distributor, or distributor branch shall
fully compensate its motor vehicle dealers licensed in this state for warranty parts,
work, and service specified in this section. Failure to fully compensate includes a
reduction in the amount due to the dealer or imposing a separate charge, surcharge,
or other imposition by which the motor vehicle manufacturer, factory branch,
distributor, or distributor branch seeks to recover the costs of complying with this
section from the dealer.
The retail rate customarily charged by the dealer for parts is established by the dealer
submitting to the manufacturer or distributor one hundred sequential nonwarranty
customer-paid service repair orders that contain warranty-like parts or ninety
consecutive days of nonwarranty customer-paid service repair orders that contain
warranty-like parts, whichever is less, covering repairs made no more than one
hundred eighty days before the submission and declaring the average percentage
The retail rate customarily charged by the dealer for labor must be established using
the same process as provided under subsection 4 and declaring the average labor
rate. The average labor rate must be determined by dividing the amount of the dealer's
total labor sales by the number of total hours that generated those sales. If a labor rate
and parts markup rate are simultaneously declared by the dealer, the dealer may use
the same repair orders to complete each calculation as provided under subsection 4.
In calculating the retail rate customarily charged by the dealer for parts and labor, the
following work may not be included in the calculation:
a. Repairs for manufacturer or distributor special events, specials, or promotional
discounts for retail customer repairs;
b. Parts sold at wholesale;
c. Routine maintenance not covered under any retail customer warranty, including
fluids, filters, and belts not provided in the course of repairs;
d. Nuts, bolts, fasteners, and similar items that do not have an individual part
e. Tires; and
f. Vehicle reconditioning.
The average of the parts markup rates and labor rate is presumed to be fair and
reasonable and must go into effect thirty days following the manufacturer's approval. A
manufacturer or distributor may rebut the presumption by reasonably substantiating
that a rate is unreasonable in light of the practices of all other franchised motor vehicle
dealers in an economically similar area of the state offering the dealer's declaration of
the same line-make vehicles, not later than thirty days after submission. If the average
parts markup rate or average labor rate is rebutted, or both, the manufacturer or
distributor shall propose an adjustment of the average percentage markup based on
that rebuttal not later than thirty days after submission.
Each manufacturer, in establishing a schedule of compensation for warranty work,
shall rely on the vehicle dealer's written schedule of hourly labor rates and parts and
may not obligate any vehicle dealer to engage in unduly burdensome or
time-consuming documentation of rates or parts, including obligating vehicle dealers to
engage in transaction-by-transaction or part-by-part calculations.
A dealer or manufacturer may demand that the average parts markup or average labor
rate be calculated using the process provided under subsections 4 and 5; however, the
demand for the average parts markup may not be made within twelve months of the
last parts markup declaration and the demand for the average labor rate may not be
made within twelve months of the last labor rate declaration. If a parts markup or labor
rate is demanded by the dealer or manufacturer, the dealer shall determine the repair
orders to be included in the calculation under subsections 4 and 5.
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Title 51 Sales and Exchanges
Chapter 51-07 Miscellaneous Provisions
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