Pub. 7 2017 Issue 4

9 Disclosure of Non-OEM Products If a dealer utilizes a non-OEM part or accessory, the dealer may be required to notify customers that the part is non-OEM and not covered by the manufacturer warranty. A recent example of one manufacturer’s notice requirement includes a disclosure and customer acknowledgment form that states: “Non-[OEM] parts and accessories are not covered under the [Manufacturer] New Vehicle Limited Warranty. They may also damage the vehicle, compromise its compliance with safety standards or void the [Manufacturer] Warranty on the vehicle itself. [Manufacturer] is not responsible for the consequences of installing any non-[OEM] equipment, parts or accessories on the vehicle. A list of non-[OEM] parts used is available on request.” Failure to comply with the foregoing requirement could subject the dealer to a per incident surcharge, among other con- sequences. Where neither the franchise agreement nor manu- facturer policy require customer notification of non-OEM parts, it may be prudent practice to do so anyway to avoid claims of misrepresentation, breach of contract or fraud. Other issues relating to the manufacturer’s indemnification obligation, or the dealership’s own insurance company, in the instance a non-OEM part allegedly results in a product or injury claim, can be significantly impacted. Dealers should be certain to do their due diligence before undertaking modifications using non-OEM parts or accessories.  Julie A. Cardosi is Principal of the private firm, Law Office of Julie A. Cardosi, P.C., of Springfield, Illinois. She has practiced law for over 30 years, and represents the business interests of franchised motor vehicle dealers throughout Illinois. Formerly the first in-house staff legal counsel for the Illinois Automobile Dealers Association, she concentrates her practice in the areas of dealership compliance matters, transfers of ownership, mergers and acquisitions, franchise law, commercial real estate transfers, and other areas impacting day-to-day dealership operations. She has also served as former Illinois Assistant Attorney General and Deputy Chief of the Consumer Fraud Bureau of the Attorney General’s Office. The material discussed in this article is for general information only and is not intended as legal advice and should not be acted upon as such. Dealers should consult their own private legal counsel for application to their specific circumstances. For more information, Julie can be reached at jcardosi@autocounsel. com, or at 217-787-9782, ext. 1. Where neither the franchise agreement nor manufacturer policy require customer notification of non-OEM parts, it may be prudent practice to do so anyway to avoid claims of misrepresentation, breach of contract or fraud.