Section 14-227 - Civil liability. - Maryland Statutes

§ 14-227. Civil liability.
 

(a)  Grounds.-  

(1) A person who sells or grants a franchise is civilly liable to the person who buys or is granted a franchise if the person who sells or grants a franchise offers to sell or sells a franchise: 

(i) without the offer of the franchise being registered under this subtitle; or 

(ii) by means of an untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading, if the person who buys or is granted a franchise does not know of the untruth or omission. 

(2) In determining liability under this subsection, the person who sells or grants a franchise has the burden of proving that the person who sells or grants a franchise did not know and, in the exercise of reasonable care, could not have known of the untruth or omission. 

(b)  Action to recover damages.- The person who buys or is granted a franchise may sue under this section to recover damages sustained by the grant of the franchise. 

(c)  Action by court.- A court may order the person who sells or grants a franchise to: 

(1) rescind the franchise; and 

(2) make restitution to the person who buys or is granted a franchise. 

(d)  Joint and several liability.-  

(1) Joint and several liability under this section extends to: 

(i) each person who directly or indirectly controls a person liable under this section; 

(ii) each partner in a partnership liable under this section; 

(iii) each principal officer or director of a corporation liable under this section; 

(iv) each other person that has a similar status or performs similar functions as a person liable under this section; and 

(v) each employee of a person liable under this section, if the employee materially aids in the act or transaction that is a violation under this subtitle. 

(2) However, liability under this subsection does not extend to a person who did not have knowledge of or reasonable grounds to believe in the existence of the facts by which the liability is alleged to exist. 

(e)  Time limitation.- An action under this section must be brought within 3 years after the grant of the franchise. 
 

[An. Code 1957, art. 56, § 365; 1992, ch. 4, § 2; ch. 26, § 4.]