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 198 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
Excellent


kishoreddi

  • Member
  • Posts: 329
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

Did you know?

More than 4.4billion prescriptions were dispensed within the United States in 2016.

Did you know?

To prove that stomach ulcers were caused by bacteria and not by stress, a researcher consumed an entire laboratory beaker full of bacterial culture. After this, he did indeed develop stomach ulcers, and won the Nobel Prize for his discovery.

Did you know?

A strange skin disease referred to as Morgellons has occurred in the southern United States and in California. Symptoms include slowly healing sores, joint pain, persistent fatigue, and a sensation of things crawling through the skin. Another symptom is strange-looking, threadlike extrusions coming out of the skin.

Did you know?

Every flu season is different, and even healthy people can get extremely sick from the flu, as well as spread it to others. The flu season can begin as early as October and last as late as May. Every person over six months of age should get an annual flu vaccine. The vaccine cannot cause you to get influenza, but in some seasons, may not be completely able to prevent you from acquiring influenza due to changes in causative viruses. The viruses in the flu shot are killed—there is no way they can give you the flu. Minor side effects include soreness, redness, or swelling where the shot was given. It is possible to develop a slight fever, and body aches, but these are simply signs that the body is responding to the vaccine and making itself ready to fight off the influenza virus should you come in contact with it.

Did you know?

Vampire bats have a natural anticoagulant in their saliva that permits continuous bleeding after they painlessly open a wound with their incisors. This capillary blood does not cause any significant blood loss to their victims.

For a complete list of videos, visit our video library