# Title 51 — Sales and Exchanges

## Chapter 51-07 — Miscellaneous Provisions

### § 51-07-00.1. Definitions.

As used in sections 51-07-01, 51-07-02.1, 51-07-02.2, 51-07-02.3, 51-07-02.4, and
1. "Contract" means any written franchise agreement, sales agreement, dealer
agreement, or security agreement, or other form of agreement or arrangement of like
effect.
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
items.
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
distributor.
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.

15. "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
dealer.
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
merchandise.
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.

### § 51-07-01.1. Termination of retail contract to be done in good faith - Definition of good

cause.
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
faith.
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.

1. Notwithstanding the terms of any contract, 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:
a. Require or attempt to require a farm equipment dealer to accept delivery of farm
equipment, parts, or accessories that the farm equipment dealer has not
voluntarily ordered or require the farm equipment dealer to maintain or stock a
level of equipment, parts, or accessories except as provided in subdivision b.
b. Condition or attempt to condition the sale of farm equipment, parts, or
accessories on a requirement that the farm equipment dealer also purchase other
goods or services, or purchase a minimum quantity of farm equipment as a
condition of filling an order for farm equipment, except 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
equipment manufacturer.
c. Require or attempt to require a farm equipment dealer into a refusal to purchase
farm equipment manufactured by another farm equipment manufacturer.
d. Require a farm equipment dealer to separate the line-makes operating within the
dealer's facility by requiring the separation of personnel, inventory, service areas,
display space, or otherwise dictate the method, manner, number of units, or the
location of farm equipment displays at the dealer's facility. This subdivision does
not prevent a farm equipment dealer and manufacturer from agreeing to those
terms if the agreement was supported by separate and valuable consideration.
The issuance, reissuance, or extension of a dealership contract alone is not
separate and valuable consideration.

e. Require a farm equipment dealer to either establish or maintain exclusive
facilities, personnel, or display space or to abandon an existing relationship with
another manufacturer in order to continue, renew, reinstate, or enter a dealer
agreement or to participate in any program discount, credit, rebate, or sales
incentive. This subdivision does not prevent a farm equipment dealer and
manufacturer from agreeing to establish or maintain exclusive facilities for
separate and valuable consideration. The issuance, reissuance, or extension of a
dealership contract alone is not separate and valuable consideration.
f. Discriminate in the prices charged for farm equipment of similar grade and quality
sold by the farm equipment manufacturer to similarly situated farm equipment
dealers. This subdivision 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 subdivision 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.
g. 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 substantially comply with the material
terms of the written contract between the parties or if the attempt or threat is
based on the results of a circumstance beyond the farm equipment dealer's
control, including a sustained drought or other natural disaster in the dealership
market area or a labor dispute. A substantial change in the competitive
circumstances includes the removal of authorization to operate at a location from
where the dealer is currently operating or the unreasonable removal of a product
line or segment.
h. Require a farm equipment dealer to unreasonably remodel, renovate, or
recondition the dealer's facilities, change the location of the facilities, or make
unreasonable alterations to the dealership premises. A request for a dealer to
remodel, renovate, or recondition the dealer's facilities, change the location of the
facilities, or make alterations to the dealership premises must be considered in
light of current and reasonably foreseeable projections of economic conditions,
financial expectations, and the dealer's market for the sale of farm equipment. A
facility modification request is unreasonable if the request is within seven years of
a farm equipment dealer's most recent facility remodel, renovation, or
reconditioning.
i. 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. Failure
to deny the request within sixty days is deemed an approval.
j. Conduct a warranty or incentive audit or seek a chargeback on a warranty or
incentive payment more than one year after the date of the warranty or incentive
payment. 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. The audit and
chargeback provisions in this subdivision apply to all incentive and
reimbursement programs that are subject to audit by a manufacturer. Before
imposing a chargeback, a manufacturer shall identify each claim at issue and
provide the dealer with written explanation for the proposed chargeback for each
claim. The cumulative value of any chargeback, fees, penalties, or adverse action
for an individual claim may not exceed the total direct compensation received by
the dealer for the claim at issue. Thereafter, the manufacturer shall provide the

dealer a reasonable time, no less than forty-five days, to present additional
information regarding a claim at issue.
k. Use an unreasonable, arbitrary, or unfair sales, service, or other performance
standard in determining a farm equipment dealer's compliance with a contract or
program. Before applying any sales, service, or other performance standard to a
farm equipment dealer, a manufacturer shall communicate the performance
standard in writing in a clear and concise manner, including a detailed
explanation of the criteria, calculations, methodology, and data used to establish
the standard.
l. Require a farm equipment dealer in this state to enter an agreement with the
manufacturer or any other party which requires:
(1) The law of another jurisdiction to apply to a dispute between the dealer and
manufacturer;
(2) The dealer to bring an action against the manufacturer in a venue outside of
this state;
(3) The dealer waive the right to have all of this state's statutory and common
law apply;
(4) Reducing, modifying, or eliminating the dealer's right to resolve a dispute in
a state or federal court in this state; or
(5) The dealer to agree to arbitration or waive their rights to bring a cause of
action against the manufacturer, 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. Renewal, reinstatement, or continuation of a
dealer agreement alone is not separate and valuable consideration.
2. As used in this section "farm equipment" and "farm implements" means all vehicular
implements and attachment units, designed and used primarily for planting, cultivating,
or harvesting farm products or used primarily in connection with the production of
agricultural produce or products, livestock, or poultry on farms, and which are
operated, drawn, or propelled by motor or animal power.
### § 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

requirements.
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.

1. A dealer of automobiles or trucks, farm equipment, or parts for automobiles, trucks, or
farm equipment may not transfer, assign, or sell a dealer agreement to another person
unless the dealer first provides written notice to the manufacturer or distributor of the
intended action. Within sixty days of receiving the notice, the manufacturer or
distributor must approve or deny the action. If the manufacturer or distributor denies
the action, the manufacturer or distributor shall provide material reasons for the denial
to the dealer. If the manufacturer or distributor does not respond within the sixty-day
period, the action is deemed approved.
2. A denial by the manufacturer or distributor to accept a proposed transferee who meets
the written, reasonable, and uniformly applied standards of qualifications of the
manufacturer or distributor relating to the financial qualifications of the transferee and
business experience of the transferee is presumed to be unreasonable. If an action is
denied by the manufacturer or distributor, the dealer may file an action for
determination of a violation of this subsection. The dealer may pursue the dealer's
remedy under the contract or the remedy provided in this subsection. The
manufacturer or distributor has the burden of proof regarding all issues raised in the
action. The court shall approve the transfer unless the manufacturer or distributor can
prove the proposed transferee does not meet the written, reasonable, and uniformly
applied standards regarding financial qualifications and business experience.
3. As used in this section, "farm equipment" has the same meaning as in section
51-07-01.2.
### § 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
dealership premises.
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.
12. 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
consideration.
13. 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
valuable consideration.
### § 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.
### § 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
number; or
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
number; and
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

accrued prohibited.
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
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.
2. 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.
3. Any person failing to comply with the provisions of this chapter is guilty of a class B
misdemeanor.
### § 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
misdemeanor.

### § 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
infraction.
### § 51-07-16. Definitions.

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
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;
b. The freight cost, if applicable;
c. The cost for dealer or manufacturer installed accessories, if applicable; and
d. 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.
3. 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.
4. 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.
### § 51-07-19. Presumptions.

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
date.
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
consumer.
### § 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
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
buyer.
3. 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

dealership.
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.
3. 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
the succession.
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
manufacturer's line.
### § 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
accident.
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
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
not disclosed.
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.
3. "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.
4. 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.
5. 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.
6. 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
assessment.
### § 51-07-28.1. Tracking devices on motor vehicles - Disclosure - Removal - Penalty.

1. A lender may not require a person to install or maintain a global tracking or positioning
system or device on a motor vehicle for the purpose of locating or tracking the vehicle
to repossess the vehicle in case of loan default, unless:
a. The lender includes within the financing contract, in a clear and conspicuous
manner, information on the installation or placement of the system or device;
b. The system or device is installed at no cost to the buyer; and
c. The system or device is removed within sixty days of the loan for the motor
vehicle being paid in full at:
(1) The expense of the seller or lender; and
(2) A location agreed upon by the seller or lender and buyer.
2. A lender that violates this section is subject to a fine of not more than five hundred
dollars. In the case of a second or subsequent violation of this section, the lender is
subject to a fine of not less than one thousand dollars nor more than two thousand
dollars.
### § 51-07-29. Warranty work compensation.

1. a. A motor vehicle manufacturer or distributor shall reasonably compensate its
dealers for labor and parts provided by the dealer in connection with the following
manufacturer or distributor sponsored, issued, or required items:
(1) Predelivery preparation.
(2) Installation of accessories or components required by the manufacturer or
distributor to be installed before the sale of a vehicle to a consumer.
(3) Diagnostic work.
(4) Maintenance programs.
(5) Extended warranty.
(6) Certified preowned warranty.
(7) Service contracts.
(8) Parts exchange programs.
(9) Recall, goodwill, and warranty work performed by the dealer.
b. Reasonable compensation for labor for the services identified in subdivision a
may not be less than the average retail rate charged by the dealer as provided
under subsection 5 multiplied by the time guide used by the dealer for
nonwarranty customer-paid service repair orders. To establish a time guide, a
dealer shall provide written notice to the manufacturer or distributor with the name
of the time guide the dealer uses. The manufacturer or distributor may not require
the dealer to provide any other information to establish the time guide the dealer
uses. If no time guide exists for a warranty repair, compensation for warranty
labor must equal the dealer's average retail rate multiplied by the time spent to
complete the repair, and may not be less than the time charged to a retail
customer for the same or similar work provided. A dealer shall use time

allowances for the diagnosis and performance of work and service which are
reasonable and adequate for a qualified technician to perform the work or
services. Reasonable compensation for parts for the services identified in
subdivision a may not be less than the average retail rate customarily charged by
the dealer for these parts as provided under subsection 4.
2. A dealer shall submit a claim for reimbursement for services within ninety days from
the completion of the services identified in subdivision a of subsection 1. A motor
vehicle manufacturer or distributor 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 or
distributor shall either approve or disapprove a claim within thirty days after the claim
is submitted to the manufacturer or distributor. The manufacturer or distributor may
prescribe the manner in which and the forms on which the dealer must present the
claim. A claim not specifically disapproved in writing within thirty days after the
manufacturer or distributor receives the claim must be construed to be approved and
the manufacturer or distributor shall pay the claim within thirty days. If a manufacturer
or distributor disapproves a claim in writing within thirty days, the manufacturer or
distributor shall contemporaneously provide the dealer with a detailed written
explanation of the reason the claim was disapproved. The dealer has thirty days from
the receipt of the disapproval to resubmit a corrected claim.
3. A motor vehicle manufacturer or distributor shall fully compensate its motor vehicle
dealers licensed in this state for parts and labor specified in this section. Failure to fully
compensate includes a reduction in the amount due under this section to the dealer or
imposing a separate charge, surcharge, or other imposition by which the motor vehicle
manufacturer or distributor seeks to recover the costs of complying with this section
from the dealer.
4. 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
markup.
5. 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.
6. In calculating the retail rate customarily charged by the dealer for parts and labor as
provided in subsections 4 and 5, 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. Parts or labor used in manufacturer or distributor sponsored programs that
restrict the pricing for repairs;
d. Routine maintenance not covered under any retail customer warranty, including
fluids, filters, and belts not provided in the course of repairs;
e. Nuts, bolts, fasteners, and similar items that do not have an individual part
number;
f. Replacement or work on tires, including wheel or tire rotations or balancing, or
replacements of brakes, including brake drums, rotors, shoes, or pads;
g. Vehicle reconditioning;
h. Alignments, unless necessary as part of a mechanical repair;
i. Batteries, other than electric vehicle or hybrid vehicle propulsion batteries;
j. Repairs of a motor vehicle owned by the dealer or an employee of the dealer;

k. Installation of accessories;
l. Repairs to or with aftermarket parts; and
m. Repairs performed on motor vehicles of a line make other than that for which the
dealer is franchised by the motor vehicle manufacturer.
7. a. The average of the parts markup rates and labor rate calculated under
subsections 4 through 6 is presumed to be fair and reasonable and must go into
effect thirty days following the manufacturer's receipt of the submission subject to
the manufacturer or distributor's ability to contest the rate as provided in this
subsection. The motor vehicle manufacturer or distributor may not issue more
than one notice to the dealer contesting any declared labor rate or parts markup,
and may not add to, expand, supplement, or otherwise modify any reason for
contesting the declared rate or parts markup. A manufacturer or distributor may
contest the material accuracy of the rate calculated under this section by
providing a written objection to the dealer within thirty days after receiving the
dealer's submission, and shall:
(1) Provide the dealer with a copy of all calculations used by the motor vehicle
manufacturer or distributor to make the determination of the dealer's labor
rate or parts markup, a written explanation of the basis for any inaccuracy
alleged by the motor vehicle manufacturer or distributor, and evidence
substantiating any written explanation.
(2) Provide a proposed adjustment of the dealer's labor rate or parts markup
based solely upon the information provided by paragraph 1.
(3) Commence paying the dealer at the proposed adjusted labor rate or parts
markup determined by the motor vehicle manufacturer or distributor as
provided in this section. This section applies to all proposed adjusted labor
rates or parts markups, even if the motor vehicle manufacturer's or
distributor's determination of the labor rate or parts markup is different from
the labor rate or parts markup provided in the dealer's submission.
b. If a motor vehicle manufacturer or distributor fails to comply with the requirements
of subdivision a within thirty days of receipt of submission, the submission is
approved.
c. If a dealer agrees with the conclusions of the motor vehicle manufacturer or
distributor and any corresponding adjustment to the labor rate or parts markup
contained within the written objection, no further action is required. The new
adjusted rate is effective thirty days after the dealer's submission is received by
the manufacturer or distributor.
d. If a motor vehicle manufacturer or distributor provides a written objection that
complies with the requirements under subdivision a, and the dealer does not
agree with the proposed adjusted labor rate or parts markup contained within the
written objection, or if the dealer disputes the motor vehicle manufacturer or
distributor complied with the provisions of subdivision a, the dealer may bring an
action in a court of competent jurisdiction. In such proceeding:
(1) The motor vehicle manufacturer or distributor has the burden of proof by a
preponderance of the evidence, and must show:
(a) The manufacturer or distributor complied with subdivision a;
(b) The dealer's submitted labor rate or parts markup was materially
inaccurate; and
(c) The manufacturer's or distributor's proposed adjustment to the
dealer's submitted labor rate or parts markup was materially accurate.
(2) If the dealer prevails in the action, the dealer's labor rate or parts markup is
retroactive to the date thirty days following the motor vehicle manufacturer's
or distributor's receipt of the submission, and the dealer shall recover all
expenses in bringing and maintaining the action, including reasonable
attorney fees. If a court finds the motor vehicle manufacturer or distributor
willfully violated this section, the dealer is entitled to recover three times the
amount of the retroactive labor rate or parts markup.

8. In establishing a rate under this section, the dealer's labor rate or parts markup must
be calculated using the method prescribed in subsections 4 though 6.
9. A dealer, manufacturer, or distributor 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 or distributor,
the dealer shall determine the repair orders to be included in the calculation under
subsections 4 and 5.
10. a. If a motor vehicle manufacturer or distributor furnishes, or causes to be furnished,
a part to a dealer at no cost or at a reduced cost for use in performing the
services identified in subdivision a of subsection 1, the motor vehicle
manufacturer or distributor shall compensate the dealer in the same manner as
parts compensation under this section by paying the dealer for the dealer's cost
of the part, if any, plus an amount equal to the dealer's parts markup, multiplied
by the wholesale value of the part. The wholesale value of the part must be the
greater of:
(1) The amount the dealer paid for the part or a substantially identical part if
already owned by the dealer;
(2) The cost of the part shown in a current, or prior, motor vehicle
manufacturer's, distributor's, or furnishing party's established price schedule;
and
(3) The cost of a substantially identical part shown in a current, or prior, motor
vehicle manufacturer's, distributor's, or furnishing party's established price
schedule.
b. A motor vehicle manufacturer or distributor may not establish or implement a
special part number for any part used in the services identified in subdivision a of
subsection 1 if it results in lower compensation to the dealer than as calculated
under this section.
11. A motor vehicle manufacturer or distributor may not:
a. Require or influence or attempt to influence a dealer to implement or change the
prices for which it sells parts or labor in retail repairs.
b. Implement or continue a policy, procedure, or program to any of its dealers in this
state for compensation under this section which is inconsistent with this section
unless otherwise agreed by the dealer and the manufacturer or distributor.
c. Take, or threaten to take, adverse action against a dealer that seeks to obtain
compensation under this section, including:
(1) Creating or implementing an obstacle or process that is inconsistent with the
motor vehicle manufacturer's obligations to the dealer under this chapter;
(2) Acting in bad faith; or
(3) Hindering, delaying, or rejecting the proper and timely payment of
compensation due to a dealer under this section, provided nothing in this
paragraph may restrict or impair audits or chargebacks conducted in
accordance with section 51-07-02.4.
12. This section applies to all manufacturers and distributors as defined by section
51-07-00.1, and any other person that supplies a component or part installed on a new
motor vehicle for which the warranty of the component or part is warrantied by another
person that is not the manufacturer.
### § 51-07-30. Customer contract clauses - Billing examples - Enforcement - Penalty.

1. As used in this section:
a. "Customer" means a person that borrows, buys, leases, or obtains services or
property under a service contract. The term does not include a government entity.

b. "Service contract" means a written agreement between a customer and a party
acting in the usual course of business in which a customer borrows, buys, leases,
or obtains personal property, real property, or services for valuable consideration.
c. "Terms and conditions" means general and special arrangements, provisions,
requirements, rules, specifications, and standards that form an integral part of an
agreement or contract.
2. If a service contract contains terms and conditions clauses, the service contract must
be accepted by the customer for the service contract to be enforceable.
3. If a service contract contains a liquidated damages clause, the clause must provide
specific examples of how any fees or charges will be calculated.
4. The attorney general may enforce this section. The attorney general, in enforcing this
section, has the powers provided in chapter 51-15 and may seek the remedies in
chapter 51-15. Each act in violation of this section constitutes a separate violation of
chapter 51-15. The remedies, duties, prohibitions, and penalties of this section are not
exclusive and are in addition to all other causes of action, remedies, and penalties in
chapter 51-15, or otherwise provided by law.
### § 51-07-31. Parts, equipment, and accessory dealers reimbursed for warranty repair.

1. As used in this section:
a. "Commercial distributor" means any person that offers for sale, sells, or
distributes to a dealer parts for any new commercial motor vehicle, truck, or
semitrailer, or vehicular implements, commercial equipment, or accessories, or
attachment units, designed and used primarily for transporting commodities,
merchandise, or commercial cargo.
b. "Commercial equipment dealer" means a person that engages in the business of:
(1) Selling, at retail, parts for any new or used commercial motor vehicle, truck,
or semitrailer, or vehicular implements, commercial equipment, or
accessories, or attachment units, designed and used primarily for
transporting commodities, merchandise, or commercial cargo; or
(2) Repairing new or used commercial motor vehicle, truck, or semitrailer parts,
or vehicular implements, commercial equipment or, accessories, or
attachment units, designed and used primarily for transporting commodities,
merchandise, or commercial cargo.
c. "Commercial manufacturer" means any person engaged in the business of
manufacturing or assembling parts for any new commercial motor vehicle, truck,
or semitrailer, or vehicular implements, commercial equipment, or accessories, or
attachment units, designed and used primarily for transporting commodities,
merchandise, or commercial cargo.
d. "Parts" includes essential and nonessential commercial motor vehicle, truck, or
semitrailer components.
2. A commercial manufacturer shall include reasonable compensation for diagnostic
work, as well as repair service, parts, and labor, in warranty work compensation. In
addition, a commercial 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 commercial manufacturer to the commercial equipment
dealer for warranty services may not be less than the average rate charged by the
commercial equipment dealer for like service to nonwarranty customers for
nonwarranty service. A commercial manufacturer may not reimburse a commercial
equipment dealer for parts used in the performance of warranty repair at a lower rate
than the average retail rate customarily charged by the commercial equipment dealer
for these parts as provided under subsection 5.
3. A commercial manufacturer shall pay a commercial equipment dealer on a claim made
by a commercial equipment dealer under this section within thirty days of the approval
of the claim. The commercial manufacturer either shall approve or disapprove a claim
within thirty days after the claim is submitted to the commercial manufacturer. The
commercial manufacturer may prescribe the manner in which and the forms on which

the commercial equipment dealer must present the claim. A claim not specifically
disapproved in writing within thirty days after the commercial manufacturer receives
the claim must be construed to be approved and the manufacturer shall pay the claim
within thirty days.
4. A commercial manufacturer, commercial distributor, or commercial distributor branch
shall compensate fully its commercial equipment 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 commercial equipment dealer or
imposing a separate charge, surcharge, or other imposition by which the commercial
manufacturer seeks to recover the costs of complying with this section from the
commercial equipment dealer.
5. The retail rate customarily charged by the commercial equipment dealer for parts is
established by the commercial equipment dealer submitting to the commercial
manufacturer or commercial 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 markup.
6. The retail rate customarily charged by the commercial equipment dealer for labor must
be established using the same process as provided under subsection 5 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
commercial equipment dealer, the commercial equipment dealer may use the same
repair orders to complete each calculation as provided under subsection 5.
7. In calculating the retail rate customarily charged by the commercial equipment dealer
for parts and labor, the following work may not be included in the calculation:
a. Repairs for commercial manufacturer or commercial distributor special events,
specials, or promotional discounts for retail customer repairs;
b. Parts sold at wholesale; and
c. Nuts, bolts, fasteners, and similar items that do not have an individual part
number.
8. The average of the parts markup rates and labor rate is presumed to be fair and
reasonable and must become effective thirty days following the commercial
manufacturer's approval. Not later than thirty days after submission, a commercial
manufacturer or commercial distributor may rebut the presumption by reasonably
substantiating that a rate is unreasonable in light of the practices of all other
commercial equipment dealers in an economically similar area of the state offering the
commercial equipment dealer's declaration of the same part, or vehicular implement,
equipment, accessory, or attachment unit. If the average parts markup rate or average
labor rate, or both are rebutted, the commercial manufacturer or commercial distributor
shall propose an adjustment of the average percentage markup based on that rebuttal
not later than thirty days after submission.
9. Each commercial manufacturer, in establishing a schedule of compensation for
warranty work, shall rely on the commercial equipment dealer's written schedule of
hourly labor rates and parts and may not obligate any commercial equipment dealer to
engage in unduly burdensome or time-consuming documentation of rates or parts,
including obligating commercial equipment dealers to engage in transaction-
by-transaction or part-by-part calculations.
10. A commercial dealer or commercial manufacturer may demand the average parts
markup or average labor rate be calculated using the process provided under
subsections 5 and 6; 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 commercial equipment

dealer or commercial manufacturer, the commercial equipment dealer shall determine
the repair orders to be included in the calculation under subsections 5 and 6.
### § 51-07-32. Liability for publishing or distributing sexual material harmful to minors -

Age verification requirement - Damages.
1. As used in this section:
a. "Commercial entity" includes a corporation, limited liability company, partnership,
limited partnership, sole proprietorship, or other legally recognized business
entity.
b. "Distribute" means to issue, sell, give, provide, deliver, transfer, transmute,
circulate, or disseminate by any means.
c. "Minor" means an individual under eighteen years of age.
d. "News-gathering organization" means an employee of a:
(1) Newspaper, news publication, or news source, printed or on an online or
mobile platform, of current news and public interest, who is acting within the
scope of employment and can provide documentation of employment with
the newspaper, news publication, or news source; or
(2) Radio broadcast station, television broadcast station, cable television
operator, or wire service, who is acting within the scope of employment and
can provide documentation of employment with the radio broadcast station,
television broadcast station, cable television operator, or wire service.
e. "Publish" means to communicate or make information available to another person
on a publicly available internet website.
f. "Reasonable age verification methods" includes verifying the individual seeking to
access the material is eighteen years of age or older by using:
(1) A digitized identification card; or
(2) Requiring the individual attempting to access the material to comply with a
commercial age verification system including the use of:
(a) Government-issued identification;
(b) A commercially available database regularly used by a business or
government entity for the purpose of age and identity verification; or
(c) Any commercially reasonable method that relies on public or private
transactional data to verify the age of the individual attempting to
access the information is eighteen years of age or older.
g. "Sexual material harmful to a minor" includes material that:
(1) The average individual applying contemporary community standards would
find, taking the material as a whole and with respect to a minor, is designed
to appeal to or pander to the prurient interest;
(2) In a manner patently offensive with respect to a minor, exploits, is devoted
to, or principally consists of descriptions of actual, simulated, or animated
displays or depictions of:
(a) An individual's pubic hair, anus, genitals, or the nipple of the female
breast;
(b) Touching, caressing, or fondling of nipples, breasts, buttocks, anuses,
or genitals; or
(c) Sexual intercourse, masturbation, sodomy, bestiality, oral copulation,
flagellation, excretory functions, exhibitions, or any other sexual act;
and
(3) Taken as a whole, lacks serious literary, artistic, political, or scientific value
for a minor.
h. "Substantial portion" means if more than thirty-three and one-third percent of total
material on a website is sexual material harmful to a minor.
i. "Transactional data" means a sequence of information that documents an
exchange, agreement, or transfer between an individual, commercial entity, or
third party used for the purpose of satisfying a request or event. The term
includes records from mortgage, education, and employment entities.

2. A commercial entity that knowingly publishes or distributes sexual material harmful to a
minor on the internet from a website that contains a substantial portion of the material
must be held liable if the entity fails to perform reasonable age verification methods to
verify the age of an individual attempting to access the material.
3. A commercial entity or third party that performs the required age verification may not
retain any identifying information of the individual after access has been granted to the
material.
4. A commercial entity found to have violated subsection 2 or 3 is liable for damages.
5. A civil action may be brought against any commercial entity, or third party that
performs the required age verification on behalf of the commercial entity, by:
a. A parent or guardian whose minor child was allowed access to the material in
violation of subsection 2; or
b. An individual whose identifying information is retained in violation of subsection 3.
6. An individual authorized to bring a civil action under subsection 5 may seek and the
court may award:
a. An injunction to enjoin continued violation of this section;
b. Compensatory and exemplary damages; and
c. Costs and fees, including reasonable attorney fees.
7. This section does not apply to any bona fide news or public interest broadcast, website
video, report, or event, and may not be construed to affect the rights of any news-
gathering organization.
8. An internet service provider or its affiliates or subsidiaries, a search engine, a cloud
service provider, or an application store, may not be held to have violated this section
solely for providing access or connection to or from a website or other information or
content on the internet or a facility, system, or network not under the provider's control,
including transmission, downloading, intermediate storage, access software, or other
forms of access or storage to the extent the provider is not responsible for the creation
of the content of the communication that constitutes sexual material harmful to a
minor.
