CHAPTER 2352. BOAT MANUFACTURERS, DISTRIBUTORS, AND DEALERS
OCCUPATIONS CODE
TITLE 14. REGULATION OF MOTOR VEHICLES AND TRANSPORTATION
SUBTITLE B. REGULATIONS RELATED TO VESSELS
CHAPTER 2352. BOAT MANUFACTURERS, DISTRIBUTORS, AND DEALERS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 2352.001. DEFINITIONS. In this chapter:
(1) "Agreement" means a written agreement between a manufacturer
or distributor and a dealer for the purchase and sale of new
boats or new outboard motors.
(2) "Boat" means:
(A) a motorboat; or
(B) any other vessel that is more than 14 feet in length and is
designed to be propelled by a sail.
(3) "Dealer" has the meaning assigned by Section 31.003, Parks
and Wildlife Code.
(4) "Distributor" means a person who:
(A) offers for sale, sells, or distributes new boats or new
outboard motors to dealers; or
(B) controls a person described by Subdivision (A).
(5) "Manufacturer" has the meaning assigned by Section 31.003,
Parks and Wildlife Code.
(6) "Motorboat" has the meaning assigned by Section 31. 003,
Parks and Wildlife Code.
(7) "New" has the meaning assigned by Section 31.003, Parks and
Wildlife Code.
(8) "Outboard motor" has the meaning assigned by Section 31.003,
Parks and Wildlife Code.
(9) "Vessel" has the meaning assigned by Section 31.003, Parks
and Wildlife Code.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1,
2003.
SUBCHAPTER B. DEALER AGREEMENTS
Sec. 2352.051. AGREEMENT REQUIRED. A manufacturer or
distributor contracting with a dealer may not sell or offer for
sale, and a dealer may not purchase or offer to purchase, a new
boat or a new outboard motor unless the manufacturer or
distributor and the dealer enter into an agreement that complies
with this chapter.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1,
2003.
Sec. 2352.052. TERMS OF AGREEMENT. (a) An agreement under this
chapter must include:
(1) the dealer's location, territory, or market area;
(2) the length of the agreement;
(3) any performance or marketing standards;
(4) any working capital, inventory, facility, equipment, or tool
standards;
(5) provisions for termination or nonrenewal of the agreement
and the designation of a successor dealer in the event of the
dealer's death or disability;
(6) the obligations of the manufacturer, distributor, and dealer
in the preparation and delivery of and warranty service on new
boats and new outboard motors;
(7) the obligations of the manufacturer, distributor, and dealer
on termination of the agreement, including inventory of new boats
and new outboard motors, parts inventory, equipment, furnishings,
special tools, and required signs; and
(8) dispute resolution procedures.
(b) Notwithstanding the terms of a dealer agreement, a dealer
agreement and any transaction subject to this chapter must comply
with the requirements of this section.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1,
2003.
Sec. 2352.053. TERMINATION OR NONRENEWAL OF AGREEMENT; NOTICE.
(a) A manufacturer or distributor may not terminate an agreement
unless there is good cause for the termination and:
(1) the manufacturer or distributor gives the dealer written
notice of termination in clear and concise terms;
(2) the notice states the reasons for termination; and
(3) the dealer has been given 30 days to make a good faith
effort to cure the reasons for termination stated in the notice.
(b) Good cause is not required for the nonrenewal of an
agreement other than an agreement having an original term of less
than one year.
(c) The fact that a dealer holds an agreement involving another
line, make, or brand of new boat or new outboard motor does not
constitute good cause.
(d) A manufacturer or distributor may terminate an agreement on
written notice if the dealer:
(1) financially defaults to the manufacturer, the distributor,
or a financing source;
(2) becomes subject to an order for relief, as that term is used
in Title 11, United States Code;
(3) engages in fraudulent conduct in:
(A) conducting the dealer's business; or
(B) performing the agreement;
(4) is a corporation that ceases to exist;
(5) becomes insolvent or takes or fails to take any action that
constitutes an admission of inability to pay debts as the debts
mature;
(6) makes a general assignment for the benefit of creditors to
an agent authorized to liquidate any substantial amount of
assets; or
(7) applies to a court for the appointment of a receiver for any
assets or properties.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1,
2003.
SUBCHAPTER C. REGULATION OF MANUFACTURERS, DISTRIBUTORS, AND
DEALERS
Sec. 2352.101. DELIVERY REQUIREMENTS. (a) A manufacturer or
distributor who publicly advertises a new boat, new outboard
motor, or part as available for immediate delivery shall deliver
the boat, outboard motor, or part in reasonable quantities and
within a reasonable time after receipt of an order from a dealer
who has an agreement with the manufacturer or distributor
applicable to the advertised boat, outboard motor, or part.
(b) Subsection (a) does not apply if circumstances beyond the
control of the manufacturer or distributor prevent the delivery.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1,
2003.
Sec. 2352.102. SALE, TRANSFER, OR PASSAGE OF TITLE. A
manufacturer or distributor may not unreasonably withhold
approval of a sale, transfer, or passage of title of a dealer,
agreement, management of the dealer, or designation of a
successor dealer if:
(1) the dealer complies with any provisions in the agreement for
the sale, transfer, or passage of title;
(2) the transferee meets the criteria:
(A) stated in the agreement; or
(B) generally applied by the manufacturer or distributor in
similar situations; and
(3) the transferee agrees to be bound by the terms and
conditions of the manufacturer's or distributor's standard
agreement.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1,
2003.
Sec. 2352.103. FINANCING. (a) A manufacturer or distributor
may not require a dealer to finance through a particular
financing source a new boat or new outboard motor sold by the
dealer.
(b) A manufacturer or distributor may not require a dealer to
act as the manufacturer's or distributor's agent in securing:
(1) a promissory note and security agreement in connection with
the sale or purchase of a new boat or new outboard motor; or
(2) an insurance policy on the operation of a new boat or new
outboard motor.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1,
2003.
Sec. 2352.104. SALE OF PARTS AND ACCESSORIES AFTER TERMINATION
OF AGREEMENT. (a) After a manufacturer or distributor
terminates an agreement, the former dealer may continue to
purchase parts and accessories to service the products covered by
the agreement until the first anniversary of the date of
termination. The manufacturer or distributor shall sell parts and
accessories under this subsection at the same price offered to a
current dealer.
(b) Subsection (a) does not apply if the manufacturer or
distributor terminates the agreement:
(1) based on quality of service; or
(2) for a reason justifying immediate termination under Section
2352.053(d).
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1,
2003.
Sec. 2352.105. COMPENSATION FOR WARRANTY SERVICE. (a) A
manufacturer or distributor shall fairly compensate a dealer for
the work and services the dealer performs and for expenses the
dealer incurs to comply with a manufacturer's or distributor's
warranty.
(b) Except as provided by Subsection (c), a manufacturer or
distributor may not pay a dealer a labor rate for warranty work
that is less than the rate the dealer charges retail customers
for nonwarranty work of the same kind by similar technicians.
(c) A manufacturer or distributor who has a warranty program
that reimburses a dealer at 100 percent of the dealer's retail
labor rate if the dealer complies with reasonable and objective
criteria shall pay the dealer the labor rate provided by the
terms of the program or a rate equal to 80 percent of the
dealer's retail labor rate, whichever rate is higher.
(d) A manufacturer or distributor shall approve or disapprove a
dealer's claim for warranty work within a reasonable time. If the
claim is approved, the manufacturer or distributor shall pay the
claim within a reasonable time. If the claim is disapproved, the
manufacturer or distributor shall notify the dealer of the
grounds for disapproval.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1,
2003.
Sec. 2352.106. REFUNDS, REBATES, AND DISCOUNTS. A dealer may
not pay or assume a part of a refund, rebate, discount, or other
financial adjustment made by the manufacturer or distributor to a
customer or a dealer unless the dealer voluntarily agrees to make
the payment or assumption.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1,
2003.
Sec. 2352.107. REPURCHASE BY MANUFACTURER OR DISTRIBUTOR. (a)
A manufacturer or distributor who terminates an agreement shall
repurchase on demand from the dealer any of the following items,
purchased by the dealer from the manufacturer or distributor,
that are free and clear of a lien or encumbrance:
(1) a new, unsold, retailable, undamaged, and complete boat,
with accessories and packaged trailers sold with the boat, and
any outboard motor that:
(A) is in the dealer's inventory; and
(B) was purchased within one year preceding the date of the
termination; and
(2) any new, current, unsold, undamaged, and unused parts or
accessories for boats or outboard motors in the original
resalable merchandising package.
(b) A demand for repurchase must be made in writing not later
than the 30th day after the date the manufacturer or distributor
terminates the agreement. The dealer must provide the
manufacturer or distributor with a complete list of the items to
be repurchased. The manufacturer or distributor shall complete
the repurchase within a reasonable time.
(c) The manufacturer or distributor shall:
(1) repurchase an item described by Subsection (a)(1) at the
dealer's invoiced cost, less any allowance paid to the dealer;
(2) repurchase an item described by Subsection (a)(2) at the
dealer's invoiced cost; and
(3) pay the cost incurred by the dealer to transport an item
described by Subsection (a) to the manufacturer.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1,
2003.
SUBCHAPTER D. ENFORCEMENT PROVISIONS
Sec. 2352.201. CIVIL LIABILITY. A person who violates this
chapter or an agreement regulated by this chapter is liable to an
injured party for:
(1) the actual damages caused by the violation; and
(2) reasonable legal fees and court costs if litigation is
commenced in connection with the violation.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1,
2003.
Sec. 2352.202. VENUE FOR DISPUTE. Venue for a dispute under an
agreement is in the county of the dealer's principal place of
business as stated in the agreement.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1,
2003.
Sec. 2352.203. ARBITRATION. A dealer may not be required to
submit to arbitration on an issue between the dealer and the
manufacturer or distributor at a location that is out of state or
an unreasonable distance from the dealer's principal place of
business.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1,
2003.