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Title 15, Commerce and TradeRelease 119-110

§1226 Motor Vehicle Franchise Contract Dispute Resolution Process

Title 15 › CHAPTER 27 — AUTOMOBILE DEALER SUITS AGAINST MANUFACTURERS › § 1226

Last updated Sep 23, 2026|Official source

Summary

Arbitration for disputes under a motor vehicle franchise contract can only be used if, after the dispute starts, every party agrees in writing. If the parties choose arbitration, the arbitrator must give a written explanation of the facts and the legal reasons for the decision. Definitions in one line each: "motor vehicle" — as defined in 49 U.S.C. 30102(6); "motor vehicle franchise contract" — a contract where a manufacturer, importer, or distributor sells vehicles for resale and authorizes repair and service. This rule covers contracts made, changed, renewed, or extended after November 2, 2002.

Full Legal Text

Title 15, §1226

Commerce and Trade, Source: USLM XML via OLRC

(a)Election of arbitration
(1)Definitions
For purposes of this subsection
(A)
(B)the term “motor vehicle franchise contract” means a contract under which a motor vehicle manufacturer, importer, or distributor sells motor vehicles to any other person for resale to an ultimate purchaser and authorizes such other person to repair and service the manufacturer’s motor vehicles.
(2)Consent required
Notwithstanding any other provision of law, whenever a motor vehicle franchise contract provides for the use of arbitration to resolve a controversy arising out of or relating to such contract, arbitration may be used to settle such controversy only if after such controversy arises all parties to such controversy consent in writing to use arbitration to settle such controversy.
(3)Explanation required
Notwithstanding any other provision of law, whenever arbitration is elected to settle a dispute under a motor vehicle franchise contract, the arbitrator shall provide the parties to such contract with a written explanation of the factual and legal basis for the award.
(b)Application
Subsection (a) shall apply to contracts entered into, amended, altered, modified, renewed, or extended after November 2, 2002.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 30102(6) of title 49, referred to in subsec. (a)(1)(A), probably should be “section 30102(a)(6) of title 49”, which was redesignated section 30102(a)(7) of title 49 by section 24109(b)(2) of Pub. L. 114–94, div. B, title XXIV, Dec. 4, 2015, 129 Stat. 1706. Codification Section was enacted as part of the 21st Century Department of Justice Appropriations Authorization Act, and not as part of act Aug. 8, 1956, ch. 1038, which comprises this chapter.

Reference

Citations & Metadata

Citation

15 U.S.C. § 1226

Title 15, Commerce and Trade

Last Updated

Sep 23, 2026

Release point: 119-110