Unreasonable Conduct Under Pa. Vehicle Franchise Laws

Pennsylvania has elected to follow many other states in enacting vehicle dealer franchise laws as part of the Pennsylvania Vehicle Manufacturers, Dealers and Salespersons Act, 63 P.S. §818.1. In addition to providing licensing requirements and consumer protections, these statutes also attempt to protect the rights of Pennsylvania dealers and consumers by establishing laws to govern certain aspects of the relationships between vehicle manufacturers/distributors and their new vehicle dealers. To the extent applicable, these statutory provisions override and transcend contrary terms contained in the parties’ dealer franchise agreements that are typically drafted by the manufacturers.

In reviewing these statutes, the terms "reasonable" and "unreasonable" are used throughout the act. For example, Section 12(b)(3) of the act makes it unlawful for a manufacturer to unreasonably withhold consent to the sale or transfer of a dealership franchise to a qualified buyer who meets the manufacturer’s reasonable requirements for appointment as a dealer. Similarly, Section 12(b)(4) of the act makes it unlawful for a manufacturer to unreasonably withhold consent to the proposed relocation of an existing dealer provided that the proposed relocation is not within a statutorily defined distance of an existing same line-make dealer.