Sales Requirements

Scope: 940 CMR 5.04 et seq. pertaining to sales requirements shall apply only to sales of motor vehicles which are purchased primarily for personal, family or household purposes. (1) It is an unfair or deceptive act or practice for a dealer to fail to prepare a written contract for a sale of each motor vehicle and to provide a copy of such contract to the purchaser at the time the purchaser signs the contract in the form and manner prescribed in 940 CMR 5.04(2). (2) It is an unfair or deceptive act or practice for a dealer to use any written or printed contract, form or agreement to evidence the sale of a motor vehicle which is not clearly entitled "MOTOR VEHICLE PURCHASE CONTRACT" and which does not state: (a) The name and address of the dealer and the purchaser; (b) The make, model, year and identification or serial numbers of both the vehicle purchased and any trade-in vehicle; (c) A designation of the purchased vehicle as either "new" or "used"; and a further designation as a "police car", taxicab", "demonstrator", "former leased car", "former daily rental" or a rebuilt vehicle which was previously declared a total loss by an insurance company, if the dealer knows or, in the exercise of reasonable care, should know of the applicability of any such designation; (d) The total contract price, including an itemized list of any charges for vehicle repair or preparation, optional accessories and documentary preparation which are not already included in the purchase price; (e) If there are any conditions precedent to the dealer's acceptance of the contract (for example, if the contract must be counter-signed by an authorized dealer representative or if a trade-in vehicle must be inspected and meet certain standards, etc.), the following statement, set forth in a clear and conspicuous manner, with the conditions inserted in the blank spaces: "This contract is not binding upon either the dealer or the purchaser until the following conditions are met: PURCHASER MAY CANCEL THIS CONTRACT AND RECEIVE A FULL REFUND AT ANY TIME UNTIL S/HE RECEIVES A COPY OF THIS CONTRACT SIGNED BY AN AUTHORIZED DEALER REPRESENTATIVE. PURCHASER MUST GIVE WRITTEN NOTICE OF CANCELLATION TO THE DEALER." For purposes of 940 CMR 5.00, if a controversy arises concerning the date or time of receipt of any notice or document, the time and date of the postmark will be determinative unless the notice or document was hand-delivered, in which case the actual time of delivery will govern; (f) If the vehicle carries an express warranty, the following statement: "This vehicle carries an express warranty. You may obtain a written copy of such warranty from the dealer upon request." (g) The following statement, in either form appearing herein, set forth in a clear and conspicuous manner: "ATTENTION PURCHASER: All vehicles are WARRANTED as a matter of state law. They must be fit to be driven safely on the roads and must remain in good running condition for a reasonable period of time. If you have significant problems with this vehicle or if it will not pass a Massachusetts inspection, you should notify the dealer immediately. He may be required to fix the car or refund your money. THIS WARRANTY IS IN ADDITION TO ANY OTHER WARRANTY GIVEN BY THE DEALER." or "ATTENTION PURCHASER: If you have mechanical or operating problems or if this vehicle does not pass a Massachusetts safety inspection within seven days of purchase, you should notify the dealer immediately. He may be required to fix the vehicle or refund your money. This vehicle is covered by the implied warranties of merchantability and fitness for a particular purpose. THESE IMPLIED WARRANTIES ARE IN ADDITION TO ANY OTHER WARRANTIES GIVEN BY THE DEALER." (h) The provisions of 940 CMR 5.04(2) shall not apply to a retail installment sale agreement, or security agreement, or any other document given or taken in connection with the sale of a motor vehicle, so long as a motor vehicle purchase contract in the form specified in 940 CMR 5.00 has been properly executed. (3) It is an unfair or deceptive act or practice for a dealer to fail to provide to any person, upon request, a written statement of the terms and conditions of any express warranty applicable to motor vehicles offered for sale by such dealer. (4) It is an unfair or deceptive act or practice for a dealer to fail to provide to a purchaser, without additional charge, an exact copy of any document signed by such purchaser (other than the purchaser's transfer or assignment of title to the dealer) at the time the purchaser signs such document. (5) It is an unfair or deceptive act or practice for a dealer to make any changes or additions to a document signed by a purchaser unless such purchaser consents to the changes or additions in writing and the dealer immediately provides to the purchaser, without additional charge, an exact copy of the document with the changes or additions. (6) It is an unfair or deceptive act or practice for a dealer to fail to display the following statement in a clear and conspicuous manner on the left front window of each used motor vehicle it delivers to a purchaser. FIGURE 1. "REFUND RIGHTS ATTENTION PURCHASER: For your own protection, if you have purchased this vehicle for personal or family use, you should have the vehicle inspected within 7 days after purchase, even if it already has an inspection sticker on it. If the vehicle fails a Massachusetts safety inspection, you may return it to the dealer and receive a full refund of the purchase price, pursuant to M.G.L. c. 90, § 7N, if: (1) The car is inspected within seven days after purchase at an authorized Massachusetts inspection station; (2) The estimated cost of repairs necessary for the car to pass inspection is more than 10% of the purchase price of the car; (3) The defects which cause the vehicle to fail inspection were not caused by the abusive or negligent operation of the vehicle or by damage resulting from an accident occurring after the date of the sale; (4) You obtain from the inspection station a signed, written statement of the reasons why the car failed inspection and an estimate of the cost of repairs necessary for it to pass inspection; and (5) You return the car to the dealer within ten days from the date of purchase and give him a copy of the statement and estimate prepared by the inspection station." (7) It is an unfair or deceptive act or practice for a dealer to use a liquidated damage clause, or any clause requiring the forfeiture of a purchaser's deposit, trade-in vehicle or other property in the event the purchaser cancels or breaches the contract, in any motor vehicle purchase contract unless: (a) The clause contains a specific dollar amount which is to be retained by the dealer as liquidated damage; (b) The clause is clearly and conspicuously disclosed on the motor vehicle contract; and (c) The purchaser indicates his or her assent to the inclusion of such clause in the contract by initialing it. (8) It is an unfair or deceptive act or practice for a dealer to represent that a motor vehicle offered for sale can or will be delivered on or about a specified date or within a specified time period when the dealer knows or should know that the vehicle cannot be delivered on such date or within such time or when the dealer has no information upon which such a representation could be reasonably based. (9) It is an unfair or deceptive act or practice for a dealer to fail to refund the full amount of a purchaser's deposit promptly when: (a) The purchaser cancels the motor vehicle purchase contract before it has been accepted by an authorized dealer representative; (b) The dealer and the purchaser have agreed to make the contract subject to the purchaser's ability to obtain financing of his or her choice and the purchaser cannot obtain such financing after exerting reasonable efforts to do so; (c) The dealer does not accept the contract; (d) The dealer fails to deliver a motor vehicle to the purchaser which conforms to the terms of the contract; or (e) The purchaser cancels the contract because the dealer has failed to deliver the vehicle to the purchaser within the time period specified in the contract, or, if no time period is specified, within eight weeks after the date of the contract, unless the delay is caused by acts beyond the control of the dealer and manufacturer. (10) It is an unfair or deceptive act or practice for a dealer to increase the price of a motor vehicle after the dealer has accepted an offer to purchase it, except: (a) The price of a new vehicle may be increased in an amount equal to any price increase imposed by the manufacturer which is the result of a law or regulation of the United States or the Commonwealth of Massachusetts which either requires the addition of new equipment to certain vehicles or changes approved transportation costs or existing tax rates, or in the case of foreign made vehicles, is due to a revaluation of the United States dollar; and (b) A trade-in vehicle may be reappraised if the dealer has reason to believe that the vehicle has suffered any damage or serious mechanical deterioration prior to its delivery to the dealer or if parts or accessories, including tires, have been removed from the vehicle or replaced with parts or accessories of inferior quality. (11) It is an unfair or deceptive act or practice for any person who sells a motor vehicle to fail to execute an assignment and warranty of title for such vehicle in the space provided on the title certificate or on such other form as may be prescribed by the Registrar of Motor Vehicles and to mail or deliver such assignment to either the purchaser, the registrar or the secured party, as the case may be, on the day the vehicle is delivered to the purchaser. (12) It is an unfair or deceptive act or practice for a dealer who sells a used motor vehicle to fail to remove from such vehicle, before delivering it to the purchaser, all state safety inspection stickers which were affixed to the vehicle prior to its registration in the name of such purchaser. (13) It is an unfair or deceptive act or practice for a dealer to fail: (a) To acknowledge in writing, within three business days after being so notified, a purchaser's rejection of a motor vehicle made pursuant to M.G.L. c. 106, §§ 2-601; and, (b) If the dealer has no reasonable basis in fact to believe that the purchaser is not entitled to reject the motor vehicle, to promptly refund any and all amounts paid on account of the purchase price thereof, including the trade-in vehicle or its value as stated on the sales contract, upon receipt of documents of title properly executed or otherwise endorsed; and, 1. A clear and marketable title to the vehicle, including all requisite instruments of transfer; or 2. A title which is clear and marketable except for liens which the purchaser has agreed may be discharged by an application of his refund. (14) It is an unfair or deceptive act of practice for a dealer to fail: (a) To acknowledge in writing, within three business days after being so notified, a purchaser's revocation of his or her acceptance of a motor vehicle made pursuant to M.G.L. c. 106, §§ 2-608; and, (b) If the dealer has no reasonable basis in fact to believe that the purchaser is not entitled to revoke such acceptance, to promptly refund any and all amounts paid on account of the purchase price thereof, including the trade-in vehicle or its value as stated on the sales contract, provided that: 1. The vehicle has not been substantially altered from the condition it was in when the purchaser took possession of it excepting any alteration resulting from the condition for which acceptance of the automobile is being revoked and/or solely from normal use; 2. No accessory, component or item of equipment (including tires) has been removed or substituted for by any item of inferior quality than what was originally supplied or which results in a substantial impairment of the obligation of the manufacturer under an express warranty covering the vehicle; 3. All documents of title have been properly executed or otherwise endorsed; and, 4. The purchaser has delivered a clear and marketable title of the vehicle including all requisite instruments of transfer or a title which is clear and marketable except for liens which the purchaser has agreed may be discharged by an application of his refund. The rights provided in 940 CMR 5.04(14) shall be in addition to and not exclusive of any rights of remedies available under applicable law. (15) It is an unfair or deceptive act or practice for a dealer to use any words or phrases in connection with the retail sale of motor vehicles purchased primarily for personal, family or household purposes, which limit or imply a limitation on the implied warranties of merchantability and fitness for a particular purpose, including such phrases as "as is," "with all faults," and "50/50 warranty." (16) It is an unfair or deceptive act or practice for a dealer who receives a written notice from the manufacturer of the existence of a defect in certain motor vehicles to fail to notify persons who purchased such vehicles from it about the information contained in the notice, unless those persons have already been notified by the manufacturer. (17) It is an unfair or deceptive act or practice for a dealer, distributor, zone office or other authorized representative of a manufacturer who receives a written notice from the manufacturer of the existence of a defect in certain motor vehicles, to fail to inform any person who inquires about the defect of the information contained in the notice. (18) It is an unfair or deceptive act or practice for a dealer to fail to inform a purchaser on request of the name and address of the prior owner of the vehicle. (19) It is an unfair or deceptive act or practice for a motor vehicle manufacturer or dealer or other person engaged in trade or commerce to fail to do the following: (a) display the RESALE VEHICLE NOTICE set forth below in a clear and conspicuous manner on the right front window of each vehicle which is offered for sale or distribution at retail or otherwise after having been returned to its manufacturer pursuant to M.G.L. c. 90, § 7N½; (b) obtain on a copy of such Resale Vehicle Notice the signature, and printed name and address of each purchaser of such motor vehicle; (c) provide each such purchaser with a legible copy of the Resale Vehicle Notice the purchaser signs, at the time s/he signs it, and with a copy of all such Resale Vehicle Notices previously executed by prior purchasers of that vehicle; and (d) retain a copy of all such Resale Vehicle Notices for four years from the date of execution of each. (20) The Resale Vehicle Notice shall read as follows: RESALE VEHICLE NOTICE This is a used vehicle. It was originally sold on [Here insert the month, day, and year of sale.] The original owner returned this vehicle to the manufacturer because it contained one or more defects which the manufacturer was unable to repair adequately. This vehicle is now being resold. Massachusetts law (M.G.L. c. 90, § 7N½) allows a consumer who buys a new motor vehicle to return the vehicle to its manufacturer if the vehicle has a defect which substantially impairs its use, market value or safety and which is not repaired after a reasonable number of attempts or within a certain period of time. The original owner returned this vehicle to its manufacturer under this law, complaining of the following defects: 1. 2. 3. 4. 5. Of the defects listed above, the following have been repaired: 1. 2. 3. 4. 5. Massachusetts law entitles you to the name and address of the original owner of this vehicle. You can obtain this information from the seller on request. Note - If less than one year has expired since the date this vehicle was originally sold, and if it has traveled less than 15,000 miles, you as a buyer have warranty and repair rights, also required by M.G.L. c. 90, § 7N½. You should contact the Massachusetts Executive Office of Consumer Affairs and Business Regulation for detailed information on your rights under this law. I ACKNOWLEDGE RECEIPT OF THIS NOTICE. DATE: (Buyer's Signature) PRINT OR TYPE THE INFORMATION BELOW (Buyer's Name) (Street and No.) (City or Town) This notice is required by M.G.L. c. 90, § 7N½. (21) A dealer, manufacturer or other person engaged in trade or commerce who purchases or acquires a motor vehicle previously purchased by a consumer pursuant to 940 CMR 5.04(19) and (20), shall no longer be subject to those sections unless he knows, or in the absence of negligence should know, that such motor vehicle was returned to its manufacturer pursuant to M.G.L. c. 90, § 7N½.