This topic contains a solution. Click here to go to the answer

Author Question: Franchise Termination. Ormsby Motors, Inc (OMI), was a General Motors Corp (GM) dealership. Their ... (Read 202 times)

pane00

  • Hero Member
  • *****
  • Posts: 579
Franchise Termination. Ormsby Motors, Inc (OMI), was a General Motors Corp (GM) dealership. Their agreement provided for termination if OMI submitted false . . . claims for any payment. Larry Kain was in charge of OMI's warranty claims. After several years of excessive claims, GM complained to OMI. When nothing changed, GM conducted a dealer audit. The audit uncovered, among other things, over eighty claims in one ten-day period for paint repair work that was never done. OMI denied knowledge of Kain's activities. GM terminated its dealership agreement with OMI. OMI asked a federal district court to stop the termination, arguing in part that GM did not have good cause. Did GM have good cause? Explain.

Question 2

Principals are presumed at common law to have no duties to their agents.
 a. True
  b. False
  Indicate whether the statement is true or false



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

jlaineee

  • Sr. Member
  • ****
  • Posts: 380
Answer to Question 1

Franchise termination
The court explained that good cause exists for terminating the franchise where a franchisee fails to substantially comply with the franchise agreement. The court pointed out that the evidence overwhelmingly shows that OMI breached a material term of the franchise agreement that gave GM the right to terminate the agreement. Such a breach    constitutes a failure to substantially comply with the franchise agreement; hence, good cause is shown. The court stated that this is especially true where, as here, the violations occurred repeatedly and over a substantial period of time. The court reasoned that an isolated incident by a rogue employee' might in some circumstances not provide good cause for termination of a franchise agreement, but here the evidence demonstrates that what occurred was more than an isolated incident and that OMI officials took no corrective action even after repeated reports by GM of claims problems. Thus, OMI has failed to demonstrate any likelihood of succeeding on the merits of its argument that the termination of the franchise agreement was without good cause.

Answer to Question 2

FALSE




pane00

  • Member
  • Posts: 579
Reply 2 on: Jun 24, 2018
Gracias!


parshano

  • Member
  • Posts: 333
Reply 3 on: Yesterday
Great answer, keep it coming :)

 

Did you know?

In ancient Rome, many of the richer people in the population had lead-induced gout. The reason for this is unclear. Lead poisoning has also been linked to madness.

Did you know?

There are 20 feet of blood vessels in each square inch of human skin.

Did you know?

Drug abusers experience the following scenario: The pleasure given by their drug (or drugs) of choice is so strong that it is difficult to eradicate even after years of staying away from the substances involved. Certain triggers may cause a drug abuser to relapse. Research shows that long-term drug abuse results in significant changes in brain function that persist long after an individual stops using drugs. It is most important to realize that the same is true of not just illegal substances but alcohol and tobacco as well.

Did you know?

Prostaglandins were first isolated from human semen in Sweden in the 1930s. They were so named because the researcher thought that they came from the prostate gland. In fact, prostaglandins exist and are synthesized in almost every cell of the body.

Did you know?

Illness; diuretics; laxative abuse; hot weather; exercise; sweating; caffeine; alcoholic beverages; starvation diets; inadequate carbohydrate consumption; and diets high in protein, salt, or fiber can cause people to become dehydrated.

For a complete list of videos, visit our video library