§ 66-187. Warranty obligations. - North Carolina Statutes

§ 66‑187.  Warrantyobligations.

(a)        Whenever a supplierand a dealer enter into an agreement, the supplier shall pay any warranty claimmade by the dealer for warranty parts or service within 30 days after itsapproval. The supplier shall approve or disapprove a warranty claim within 30days after its receipt. If a claim is disapproved, the manufacturer,wholesaler, or distributor shall notify the dealer within 30 days stating thespecific grounds upon which the disapproval is based. If a claim is not specificallydisapproved in writing within 30 days after its receipt it is approved andpayment must follow within 30 days.

(b)        Whenever a supplierand a dealer enter into an agreement, the supplier shall indemnify and holdharmless the dealer against any judgment for damages or any settlement agreedto by the supplier, including court costs and a reasonable attorney's fee,arising out of a complaint, claim, or lawsuit including negligence, strictliability, misrepresentation, breach of warranty, or rescission of the sale, tothe extent the judgment or settlement relates to the manufacture, assembly, ordesign of inventory, or other conduct of the supplier beyond the dealer'scontrol.

(c)        If, aftertermination of an agreement, the dealer submits a claim to the manufacturer,wholesaler, or distributor for warranty work performed prior to the effectivedate of the termination, the manufacturer, wholesaler, or distributor shallaccept or reject the claim within 30 days of receipt.

(d)        If a claim is notpaid within the time allowed under this section, interest shall accrue at themaximum lawful interest rate.

(e)        Warranty workperformed by the dealer shall be compensated in accordance with the reasonableand customary amount of time required to complete the work, expressed in hoursand fractions thereof. The cost of the work shall be computed by multiplyingthe time required to complete the work by the dealer's established customerhourly retail labor rate. The dealer shall inform the manufacturer, wholesaler,or distributor for whom the dealer is performing warranty work of the dealer'sestablished customer hourly retail labor rate before the dealer performs anywork.

(f)         Expenses expresslyexcluded under the warranty of the manufacturer, wholesaler, or distributor to thecustomer shall neither be included nor required to be paid for warranty workperformed, even if the dealer requests compensation for the work performed.

(g)        The dealer shall bepaid for all parts used by the dealer in performing warranty work. Payment shallbe in an amount equal to the dealer's net price for the parts, plus a minimumof fifteen percent (15%).

(h)        The manufacturer,wholesaler, or distributor has a right to adjust compensation for errorsdiscovered during an audit and, if necessary, to adjust claims paid in error.

(i)         The dealer shallhave the right to accept the reimbursement terms and conditions of themanufacturer, wholesaler, or distributor in lieu of the terms and conditions ofthis section. (1985,c. 441, s. 1; 2001‑343, s. 1.)