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92nd General Assembly

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Public Act 92-0758

SB1851 Enrolled                                LRB9215626DHmg

    AN ACT in relation to business transactions.

    Be it enacted by the People of  the  State  of  Illinois,
represented in the General Assembly:

    Section 5.  The Motor Vehicle Franchise Act is amended by
changing Section 5 as follows:

    (815 ILCS 710/5) (from Ch. 121 1/2, par. 755)
    Sec.  5.  Delivery  and  preparation  obligations; damage
disclosures.  Every manufacturer shall specify in writing  to
the  dealer  the  delivery and preparation obligations of its
motor vehicle dealers prior to delivery of new motor vehicles
to retail buyers.  A copy of  the  delivery  and  preparation
obligations  of  its  motor vehicle dealers and a schedule of
the compensation to be paid to its motor vehicle dealers  for
the  work  and  services they shall be required to perform in
connection with such  delivery  and  preparation  obligations
shall   be  presented  to  the  dealer  and  the  obligations
specified therein shall  constitute any  such  dealer's  only
predelivery  obligations  as  between  such  dealer  and such
manufacturer.  The compensation as set forth on said schedule
shall be reasonable.
    A manufacturer, factory branch, distributor,  distributor
branch,   or   wholesaler  of  new  motor  vehicles  sold  or
transferred to a motor vehicle dealer  in  this  State  shall
disclose  to  the  motor  vehicle  dealer, in writing, before
delivery of  a  vehicle  to  the  motor  vehicle  dealer  all
in-transit,  post-manufacture, or other damage to the vehicle
that was sustained or incurred by the motor  vehicle  at  any
time  after the manufacturing process was complete but before
delivery of the vehicle to the dealer.   This  disclosure  is
not  required  when  the cost to repair does not exceed 6% of
the manufacturer's suggested  retail  price  of  the  vehicle
based  upon the dealer's actual retail repair cost, including
labor, parts, and materials if  the  damage  is  repaired  or
retail estimate to repair if the vehicle is not repaired. New
motor vehicles that are repaired may be sold as new and shall
be fully warranted by the manufacturer.
    For  purposes  of this Section, "manufacturer's suggested
retail price" means the retail price of the new motor vehicle
suggested by the manufacturer including the retail  delivered
price  suggested  by  the  manufacturer  for  each separately
priced accessory or item  of  optional  equipment  physically
attached to the new motor vehicle at the time of delivery.
    Whenever  a  new  motor  vehicle  sustains  or incurs any
in-transit, post-manufacture, or other  damage  at  any  time
after  the  manufacturing  process  is  complete,  but before
delivery of the vehicle to  the  motor  vehicle  dealer,  the
dealer  may within a reasonable period of time after delivery
of the motor vehicle notify the manufacturer  or  distributor
of that damage and either:
         (1)  revoke  acceptance  of  the delivery of the new
    motor vehicle whereby  ownership  of  the  motor  vehicle
    shall  revert  to  the manufacturer, and the dealer shall
    incur no obligations, financial, or  otherwise  for  that
    new motor vehicle; or
         (2)  request  authorization from the manufacturer to
    repair the damage sustained or incurred by the new  motor
    vehicle.    If  the  manufacturer  refuses  or  fails  to
    authorize repair of the  damage  within  3  days  of  the
    request  by  the  dealer,  the  dealer  may  then  revoke
    acceptance  of  the  delivery  of  the new motor vehicle;
    ownership shall  revert  to  the  manufacturer;  and  the
    dealer   shall   incur   no  obligations,  financial,  or
    otherwise for that new motor vehicle.
    A motor vehicle dealer shall disclose  to  the  purchaser
before  delivery  of  the  new motor vehicle, in writing, any
damage that the dealer has actual knowledge was sustained  or
incurred   by  the  motor  vehicle  at  any  time  after  the
manufacturing process was complete but before delivery of the
vehicle to the purchaser.  This disclosure  is  not  required
when   the   cost  to  repair  does  not  exceed  6%  of  the
manufacturer's suggested retail price of  the  vehicle  based
upon the dealer's actual retail repair cost, including labor,
parts,  and materials if the damage is repaired or the retail
estimate to repair the vehicle if it is not repaired.
    Damage to glass, tires,  bumpers,  video  and  telephonic
components,   and  in-dash  audio  equipment  is  not  to  be
considered in determining the cost of repair if replaced with
the manufacturer's original equipment.
    If disclosure is  not  required  under  this  Section,  a
purchaser  may  not revoke or rescind a sales contract due to
the fact the new vehicle  was  damaged  and  repaired  before
completion  of  the sale. In that circumstance, nondisclosure
does not constitute a misrepresentation or omission of fact.
    A manufacturer, factory branch, distributor,  distributor
branch,   or   wholesaler   of   new  motor  vehicles  shall,
notwithstanding  the  terms  of  any   franchise   agreement,
indemnify   and   hold  harmless  the  motor  vehicle  dealer
obtaining a new motor vehicle from the manufacturer,  factory
branch,  distributor,  distributor branch, or wholesaler from
and against any liability,  including  reasonable  attorney's
fees,  expert  witness  fees, court costs, and other expenses
incurred in the litigation, so long as such  fees  and  costs
are   reasonable,  that  the  motor  vehicle  dealer  may  be
subjected to by the  purchaser  of  the  vehicle  because  of
damage  to the motor vehicle that occurred before delivery of
the vehicle to the dealer  and  that  was  not  disclosed  in
writing to the dealer prior to delivery of the vehicle.  This
indemnity  obligation  of  the  manufacturer, factory branch,
distributor,  distributor  branch,  or   wholesaler   applies
regardless of whether the damage falls below the 6% threshold
under this Section.  The failure of the manufacturer, factory
branch,  distributor,  distributor  branch,  or wholesaler to
indemnify and hold harmless the motor  vehicle  dealer  is  a
violation of this Section.
(Source: P.A. 91-485, eff. 1-1-00.)
    Passed in the General Assembly May 08, 2002.
    Approved August 02, 2002.
    Effective January 01, 2003.

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