Rhode Island House Bill H7372

Rhode Island 2022 Regular Session

• Introduced: 2/9/22
• Refer: 2/9/22

Caption

Regulation Of Business Practices Among Motor Vehicle Manufacturers, Distributors, And Dealers

Impact

The enactment of H7372 would notably adjust existing regulations, affording more robust protections to motor vehicle dealers. It stipulates clear conditions under which a manufacturer could terminate or not renew a dealer's franchise, requiring good cause and appropriate notice. This change could significantly affect how motor vehicle dealerships operate by promoting a more stable business environment where dealers have security in their operational agreements. Importantly, it aims to reduce the incidents of predators and discriminatory practices within the industry, ultimately contributing to a more equitable market for all parties involved.

Summary

House Bill H7372 pertains to the regulation of business practices among motor vehicle manufacturers, distributors, and dealers in Rhode Island. The proposed legislation aims to maintain fair competition among dealers and protect both the dealers and consumers from unfair practices. This includes specifying actions deemed violations, such as coercive tactics by manufacturers against dealers concerning inventory, advertising responsibilities, and contract stipulations. The bill introduces mechanisms for accountability and transparency, ensuring that manufacturers cannot unilaterally alter agreements in a way that disadvantages dealers.

Contention

One of the critical contentions surrounding H7372 revolves around the balance of power between manufacturers and dealers. Dealers may argue that the bill doesn’t go far enough to protect their interests against larger manufacturers, who may still find ways to exert pressure. Conversely, manufacturers might express concerns that excessive regulation could limit their ability to manage dealerships effectively. The legislation could also lead to legal disputes over the interpretation of 'good cause,' as both sides may have differing views on what constitutes sufficient justification for franchise termination or non-renewal.