                                 CODE OF VIRGINIA

WARRANTY OBLIGATIONS (§ 59.1-352.8)

A. Whenever a supplier and a dealer enter into an agreement, the supplier shall
pay any warranty claim made by the dealer for warranty parts or service within
thirty days after its approval. The supplier shall approve or disapprove a
warranty claim within thirty days after its receipt. If a claim is disapproved,
the manufacturer, wholesaler, or distributor shall notify the dealer within
thirty days stating the specific grounds upon which the disapproval is based. If
a claim is not specifically disapproved in writing within thirty days after its
receipt, it is approved and payment must follow within thirty days.

B. Whenever a supplier and a dealer enter into an agreement, the supplier shall
indemnify and hold harmless the dealer against any judgment for damages or any
settlement agreed to by the supplier, including court costs and a reasonable
attorney&#8217;s fee, arising out of a complaint, claim, or lawsuit including
negligence, strict liability, misrepresentation, breach of warranty, or
rescission of the sale, to the extent the judgment or settlement relates to the
manufacture, assembly, or design of inventory, or other conduct of the supplier
beyond the dealer&#8217;s control.

C. If, after termination of an agreement, the dealer submits a claim to the
manufacturer, wholesaler, or distributor for warranty work performed prior to
the effective date of the termination, the manufacturer, wholesaler, or
distributor shall accept or reject the claim within thirty days of receipt.

D. If a claim is not paid within the time allowed under this section, interest
shall accrue at the maximum lawful interest rate.

E. Warranty work performed by the dealer shall be compensated in accordance with
the reasonable and customary amount of time required to complete the work,
expressed in hours and fractions thereof. The cost of the work shall be computed
by multiplying the time required to complete the work by the dealer&#8217;s
established customer hourly retail labor rate. The dealer shall inform the
manufacturer, wholesaler, or distributor for whom the dealer is performing
warranty work of the dealer&#8217;s established customer hourly retail labor
rate before the dealer performs any work.

F. Expenses expressly excluded under the warranty of the manufacturer,
wholesaler, or distributor to the customer shall neither be included nor
required to be paid for warranty work performed, even if the dealer requests
compensation for the work performed.

G. The dealer shall be paid for all parts used by the dealer in performing
warranty work. Payment shall be in an amount equal to the dealer&#8217;s net
price for the parts, plus a minimum of fifteen percent.

H. The manufacturer, wholesaler, or distributor has a right to adjust
compensation for errors discovered during an audit and, if necessary, to adjust
claims paid in error.

I. The dealer shall have the right to accept the reimbursement terms and
conditions of the manufacturer, wholesaler, or distributor in lieu of the terms
and conditions of this section.

HISTORY: 2002, c. 898.