Oregon Statutes - Chapter 650 - Franchise Transactions - Section 650.390 - Dealer compensation for warranty service; disapproval of warranty service claims; recall notice requirements.

(1) A warrantor shall, for a warranty provided by the warrantor:

(a) Provide reasonable compensation to a dealer for diagnostic and repair services;

(b) Allow a dealer reasonable periods for completing diagnostic and repair services;

(c) Inform a dealer in writing of:

(A) The compensation that the warrantor will pay the dealer to perform warranty service; and

(B) The time period that the warrantor will allow the dealer to perform warranty service;

(d) Reimburse the dealer in an amount equal to 130 percent of the dealerís cost of warranty parts, plus the dealerís shipping expense to return warranty parts to the supplier of the parts, where ďwarranty partsĒ includes parts for which a parts supplier provides a separate warranty directly to a consumer and where ďcostĒ means not less than the same price a dealer pays to a warrantor or supplier for the same part when purchased for a nonwarranty repair;

(e) Approve or disapprove a dealerís warranty service claim within 30 days of the dealerís submission of the claim to the warrantor; and

(f) Fulfill all warranty obligations.

(2) In determining the dealerís compensation for warranty service, the warrantor shall:

(a) Consider the prevailing rate for labor charged by other dealers in the communities served by the dealerís area of sales responsibility; and

(b) Pay the dealer a rate for labor that is not less than the reasonable rate the dealer charges to consumers for nonwarranty service.

(3) A dealer shall submit a warranty service claim to the warrantor within 30 days of the dealerís completion of the warranty service.

(4) A dealer shall notify the warrantor if the dealer is unable to perform a warranty service.

(5) If the warrantor approves a dealerís warranty service claim or fails to disapprove the claim within 30 days after submission, the warrantor shall pay the warranty service claim within 45 days of the submission of the claim.

(6) A warrantor may not disapprove a dealerís warranty service claim without good cause.

(7) A warrantor may disapprove a dealerís warranty service claim if the dealer:

(a) Failed to comply in a material respect with the warrantorís written policies and procedures for the performance of warranty service;

(b) Failed to properly account for the dealerís warranty service; or

(c) Misrepresented warranty service performed or parts used.

(8) If a warrantor disapproves a dealerís claim for a defective part on the basis that the part is not defective, the warrantor may:

(a) Return the part to the dealer at the warrantorís expense; or

(b) Pay the dealer not less than the same price the dealer pays to a warrantor or supplier for the part when purchased for a nonwarranty repair.

(9) A warrantor that issues a recall shall include in a recall notice to dealers and owners of new recreational vehicles the date by which the warrantor expects to make available to dealers parts and equipment necessary to correct the defects for which the warrantor issued the recall. The warrantor shall compensate dealers for repairs that dealers make to correct the defects.

(10) A grantor or warrantor may not:

(a) Misrepresent a dealerís obligation to perform or pay for warranty service; or

(b) Require a dealer to provide a warranty to a consumer for a recreational vehicle or other product.

(11) A warrantor may audit a dealerís records of a claim for warranty service for a period of one year from the date the dealer submitted the claim. If, during an audit, the warrantor discovers a fraudulent claim, the warrantor may extend the audit period for up to one additional year. [2003 c.377 §10; 2007 c.653 §2]

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Last modified: August 7, 2008