Louisiana changes manufacturer/dealer contract law

BATON ROUGE, La. – Louisiana has enacted a new law, effective Aug. 15, designed to create a more favorable business environment between boat manufacturers, dealers and regulators, and to give consumers a better buying experience, the National Marine Manufacturers Association reported in a release yesterday.

Governor Kathleen Beaux Blanco signed HB1354 into law with the support of a coalition of marine manufacturers, dealers, state regulators and the NMMA, which said it approves of the new measures.

“The enactment of this law is a good example of boat manufacturers, dealers and regulators working together to improve competition and the experience of boaters,” said Monita W. Fontaine, NMMA vice president of Government Relations. “These changes to the law will likely benefit boat owners and buyers by giving them better selection, competition and dealer locations.”

The legislation makes the following key changes, according to the NMMA:

Area of Responsibility: New requirements will allow marine manufacturers to expand their dealer networks in the state. Manufacturers will be able to define new territories for existing and additional dealers using market research information from credible industry sources. New dealerships can be located closer than the previous restrictions of 15 miles in urban areas and 30 miles in rural areas.

Should the existing dealer contest the new territorial boundaries, the Louisiana Used Motor Vehicle and Parts Commission will rule on the appropriateness of the data. If the data supports the new territories, the commission will be required to support the changes.

If not, the dealer’s protected territory will revert to the 15-and 30-mile restrictions. The Commission’s ruling can be appealed in court.

Succession: Successors to marine dealerships will be required to apply to the manufacturer for permission to take over the existing dealer contracts, with the successor bearing the responsibility for meeting the manufacturer’s guidelines for signing new dealers.

Previous law placed the burden upon the manufacturer for proving that a successor did not meet its criteria.

Mandatory Buy-Back: While manufacturers will remain responsible for buying back current and previous year models of vessels and engines, the price paid for buyback may be determined by an independent marine surveyor who will determine a fair price based on damage or neglect to the vessel. This provision replaces a mandatory buy-back of 100 percent of dealer invoice.

Boat Package Definition: New language was enacted that defines the brand of a boat package as being the brand of the vessel, not the brand of an engine installed by the manufacturer. This clarifies ambiguous language in previous law.

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