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The Franchise Memorandum

Disgorgement Not Provided by New Jersey Franchise Act
Posted in Damages

A car dealership that had prevailed against a manufacturer under the New Jersey Franchise Practices Act has been denied summary judgment on damages. In Liberty Lincoln-Mercury, Inc. v. Ford Motor Co., 2010 U.S. Dist. LEXIS (D.N.J. Feb. 22, 2010), the plaintiff had prevailed on its claim that Ford’s warranty service and repair parts surcharges to dealers violated the NJFPA. But that did not mean that the plaintiff could automatically obtain disgorgement of the surcharges. The court held, instead, that “damages sustained” by the franchisee had to be proved under the statute. The court was unwilling to read “disgorgement” or “reimbursement” into the NJFPA and denied summary judgment on the car dealership’s claim for damages.

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The Franchise Memorandum is a collection of postings on summaries of recent legal developments of interest to franchisors brought to you by Lathrop GPM LLP. 

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