ORS 650.020
Liability of franchise seller

  • defenses
  • amount of recovery
  • attorney fees
  • joint and several liability
  • limitation on action
  • indemnification of corporation
  • right of contribution

(1)

Any person who sells a franchise is liable as provided in subsection (3) of this section to the franchisee if the seller:

(a)

Employs any device, scheme or artifice to defraud; or

(b)

Makes any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

(2)

It shall be an affirmative defense to any action for legal or equitable remedies brought under subsection (1) of this section if the franchisee knew of the untruth or omission.

(3)

The franchisee may recover any amounts to which the franchisee would be entitled upon an action for a rescission. Except as provided in subsection (4) of this section, the court may award reasonable attorney fees to the prevailing party in an action under this section.

(4)

The court may not award attorney fees to a prevailing defendant under the provisions of subsection (3) of this section if the action under this section is maintained as a class action pursuant to ORCP 32.

(5)

Every person who directly or indirectly controls a franchisor liable under subsection (1) of this section, every partner, officer or director of the franchisor, every person occupying a similar status or performing similar functions, and every person who participates or materially aids in the sale of a franchise is also liable jointly and severally to the same extent as the franchisor, unless the nonseller did not know, and, in the exercise of reasonable care, could not have known, of the existence of the facts on which the liability is based.

(6)

An action may not be commenced under this section more than three years after the sale.

(7)

A corporation which is liable under ORS 650.005 (Definitions for ORS 650.005 to 650.100) to 650.100 (Disposition of civil penalties) shall have a right of indemnification against any of its principal executive officers, directors and controlling persons whose willful violation of any provision of ORS 650.005 (Definitions for ORS 650.005 to 650.100) to 650.100 (Disposition of civil penalties) gave rise to the liability. All persons liable under ORS 650.005 (Definitions for ORS 650.005 to 650.100) to 650.100 (Disposition of civil penalties) shall have a right of contribution against all other persons similarly liable, based upon each person’s proportionate share of the total liability, except:

(a)

A person willfully misrepresenting or failing to disclose shall not have any right of contribution against any other person guilty merely of a negligent violation; and

(b)

A principal executive officer, director, or controlling person shall not have any right of contribution against the corporation to which the person sustains that relationship. [1973 c.509 §4; 1979 c.284 §185; 1995 c.696 §40]

Source: Section 650.020 — Liability of franchise seller; defenses; amount of recovery; attorney fees; joint and several liability; limitation on action; indemnification of corporation; right of contribution, https://www.­oregonlegislature.­gov/bills_laws/ors/ors650.­html.

Notes of Decisions

Although damages are limited to amount that would be recoverable under action for rescission, damages are action at law triable to jury. Goodyear Tire & Rubber Co. v. Tualatin Tire & Auto, 322 Or 406, 908 P2d 300 (1995), modified 325 Or 46, 932 P2d 1141 (1997)

Limitation period for bringing action under this section does not incorporate discovery rule. Towne v. Robbins, 331 F. Supp. 2d 1269 (D. Or. 2004)

650.005
Definitions for ORS 650.005 to 650.100 650.010
Franchise sellers required to maintain books and records 650.015
When franchise sale or offer for sale is made in this state 650.020
Liability of franchise seller 650.050
Rules 650.055
General duties and powers of director 650.057
Orders issued under ORS 650.055 650.060
Investigative powers of director 650.065
Injunctive relief 650.070
Director as agent for service of process 650.075
Manner of executing service of process 650.080
When personal service of process required 650.085
Other civil or criminal remedies unaffected 650.095
Civil penalties 650.100
Disposition of civil penalties 650.120
Definitions for ORS 650.120 to 650.170 650.123
Use of protected dealer data 650.130
Prohibited conduct by manufacturer, distributor or importer 650.132
Prohibition of coerced sales of extended service contracts, extended maintenance plans or guaranteed asset protection waivers 650.133
Constructing, altering or remodeling dealer facility 650.140
Good cause required to terminate dealer franchise 650.145
Compensation due dealer upon termination of franchise 650.150
Enjoining establishment of certain franchises or relocation of existing dealership in same market area 650.153
Liability of franchisor for repair of motor vehicle that becomes inoperative prior to sale to consumer 650.155
Liability of manufacturer for damages to vehicles before delivery to carrier 650.158
Predelivery preparation and warranty service 650.161
Compensation for repairs to vehicles subject to recall 650.162
Transfer, assignment or sale of interest in dealership or franchise 650.165
Prohibited franchise conditions 650.167
Violation of ORS 650.140 or 650.150 as irreparable injury 650.170
Dealer’s remedy 650.200
Definitions for ORS 650.200 to 650.250 650.205
Prohibited conduct by franchisor 650.210
Rights and prohibitions governing relationship between franchisor and franchisee 650.215
Prohibited conduct in offer, sale or purchase of franchise 650.220
Consent of franchisor to sale, assignment or transfer of franchise 650.225
Death of franchisee 650.230
Transfer of franchise to corporation in which franchisee has controlling interest 650.235
Franchisor prohibited from requiring operation of service station in excess of 16 hours per day 650.240
When transfer of motor fuel a sale in commerce 650.245
Principle of good faith 650.250
Injunctive relief or damages 650.300
Definitions for ORS 650.300 to 650.480 650.310
Good cause 650.320
Dealership agreement 650.330
Comparable terms and conditions 650.340
Termination, cancellation or failure to renew 650.350
Dealer’s rights upon termination, cancellation or failure to renew 650.360
Coercion prohibited 650.370
Transfer by dealer 650.380
Dealer’s successor 650.390
Dealer compensation for warranty service 650.400
Recalls 650.410
Dealer’s warranty obligations 650.420
Required disclosures 650.430
Damaged or defective vehicles 650.440
Grantor’s ownership, operation or control of dealership 650.450
Indemnification 650.460
Indemnification 650.470
Remedies 650.480
Remedies
Green check means up to date. Up to date

Current through early 2024

§ 650.020’s source at oregon​.gov