Ch. 51-25.1

CHAPTER 51-01 Uniform Sales Act [Repealed]

[Repealed by S.L. 1965, ch. 296, § 32]

Note.

For present provisions, see chapter 41-02.

CHAPTER 51-02 Bulk Sales Law [Repealed]

[Repealed by S.L. 1965, ch. 296, § 32]

CHAPTER 51-03 Hawkers and Peddlers [Repealed]

[Repealed by omission from this code]

Note.

This chapter has been superseded by chapter 51-04.

CHAPTER 51-04 Transient Merchants

51-04-01. Definitions.

In this chapter, unless the context or subject matter otherwise requires:

  1. “Merchandise” does not include any livestock or agricultural product.
  2. “Transient merchant” includes any person, individual, copartnership, corporation, or limited liability company, either as principal or agent, who engages in, does, or transacts any temporary or transient business in this state, either in one locality, or in traveling from place to place in this state, selling, or soliciting orders for future delivery of, goods, wares, merchandise, personal property, and personal services including spraying, trimming, or pruning of trees and shrubs of all species, painting or repairing buildings or structures, pest or rodent control, and taking photographs for present or future delivery, who does not intend to become and does not become a permanent merchant of such place.

Source:

S.L. 1955, ch. 301, § 1; R.C. 1943, 1957 Supp., § 51-0401; S.L. 1979, ch. 515, § 1; 1987, ch. 587, § 1; 1989, ch. 69, § 55; 1993, ch. 54, § 106.

DECISIONS UNDER PRIOR LAW

Legislative Intent.

Chapter 201, S.L. 1911, was not intended to prevent the producers of the state from marketing the products of their farms in villages and cities without the payment of the license fee imposed. State v. Fleming, 24 N.D. 593, 140 N.W. 674, 1913 N.D. LEXIS 23 (N.D. 1913).

Merchant.

A merchant was one who bought to sell, or bought and sold, goods or merchandise in a store or shop. State v. Fleming, 24 N.D. 593, 140 N.W. 674, 1913 N.D. LEXIS 23 (N.D. 1913).

Transient Merchant.

Person who grew his own fruit, shipped it into state and sold it at retail from car placed on sidetrack within limits of a village was not a transient merchant; transient merchant was one who engaged in sale of merchandise at any place within state temporarily and who did not intend to become, and did not become, a permanent merchant at such place. State v. Fleming, 24 N.D. 593, 140 N.W. 674, 1913 N.D. LEXIS 23 (N.D. 1913).

Collateral References.

Photographers: regulation of itinerant photographers and their canvassers, 7 A.L.R.2d 416.

51-04-02. Application for license.

Any transient merchant desiring to engage in, do, or transact business by auction or otherwise, in any county in this state, shall file an application for a license for that purpose with the attorney general as provided in section 51-04-07, which must be in writing and include the following:

  1. Applicant’s name, present residence, present home address, present business address, and current telephone numbers.
  2. Applicant’s residence and business address for the prior two-year period, if different from the present residence and address.
  3. Type of business in which applicant has been engaged in the previous two years.
  4. Proposed location of the business to be licensed.
  5. Kind of business to be conducted.
  6. Length of time desired or estimated for completion of sale in the state.
  7. Name and address of the auctioneer, if any, who will conduct the sale.
  8. An itemized list of merchandise to be offered for sale reciting as to each item a description thereof including serial number, if any, the owner’s actual cost thereof, and a designation by number corresponding with a number to be affixed to each item by a tag which must be kept fastened to the item at all times until sold.

Source:

S.L. 1955, ch. 301, § 2; R.C. 1943, 1957 Supp., § 51-0402; S.L. 1979, ch. 515, § 2; 1983, ch. 529, § 1.

51-04-02.1. Application to attorney general for license. [Repealed]

Repealed by S.L. 1983, ch. 529, § 5.

51-04-03. License fee — Bond or cash surety — License issuance.

An applicant for a transient merchant’s license shall pay to the attorney general a license fee of two hundred dollars to cover the cost of licensing and shall give a surety bond, or the deposit of cash in lieu thereof, which must be not less than one thousand dollars nor more than fifty thousand dollars, the surety on which must be a surety company authorized to transact business in the state of North Dakota. The contents and surety therein are subject to the approval of the attorney general and must be conditioned that the applicant will in all things conform to the laws relating to transient merchants and further conditioned upon full compliance with all material oral or written statements and representations made by the applicant, the applicant’s agents, representatives, or auctioneers with reference to merchandise sold or offered for sale, and on faithful performance under all warranties made with reference thereto. The bond may not be revocable nor terminate prior to passage of two years’ time after the expiration of the license issued pursuant thereto nor until due notice that the terms of the bond are to be canceled has been given to the attorney general.

No license is valid for more than one person unless that person is a bona fide member of a copartnership. Licenses issued by the attorney general are valid in all counties of the state and expire after one year from the dates of their issuance.

No sale under the purview of this chapter may be conducted in the name of any person other than the bona fide owner of the goods, wares, and merchandise.

The files and records of the attorney general pertaining to transient merchants must be kept in convenient form and open for public inspection.

Source:

S.L. 1955, ch. 301, § 3; R.C. 1943, 1957 Supp., § 51-0403; S.L. 1979, ch. 515, § 3; 1983, ch. 529, § 2; 1985, ch. 540, § 2; 1987, ch. 587, § 2.

51-04-03.1. License to be carried by licensee and exhibited on demand.

Every transient merchant licensed under this chapter shall have the license in immediate possession at all times when engaging in or transacting any business regulated by this chapter. The licensee shall display the license when requested to do so by any court, law enforcement official, peace officer, or consumer. However, a person charged with violating this requirement may not be convicted, fined, or assessed the administration fee if the license is produced in court or to the arresting officer and if the license was valid at the time of the arrest.

Source:

S.L. 1983, ch. 529, § 4; 2003, ch. 266, § 8.

51-04-04. Affidavit required for certain sales.

It is unlawful for any transient merchant to advertise, represent, or hold forth as being sold for an insurance, bankrupt, insolvent, assignee, trustee, testator, executor, administrator, receiver, syndicate, wholesaler, or manufacturer, or closing out sale, or as a sale of any goods, wares, and merchandise damaged by smoke, fire, water, or otherwise, or in any similar form, unless such transient merchant shall file with the person’s application for a transient merchant license an affidavit showing all the facts relating to the reasons and character of the sale so to be advertised or represented, and showing that the sale is in fact as it is to be advertised and represented, including a statement of:

  1. The names of the persons from whom the goods, wares, and merchandise were obtained;
  2. The date of their delivery to the applicant;
  3. The place from which the goods, wares, and merchandise were last taken; and
  4. All details necessary to exactly locate and fully itemize all goods, wares, and merchandise to be sold.

Source:

S.L. 1955, ch. 301, § 4; R.C. 1943, 1957 Supp., § 51-0404.

51-04-05. Failure of affidavit.

If the affidavit filed as prescribed in section 51-04-04 shows that the sale is not of the kind or character proposed to be advertised or represented or fails to disclose the facts as required, then the county auditor or the attorney general shall refuse the applicant a license for the sale. Should a license be issued to the applicant, it must state that the applicant is authorized and licensed to sell such goods, wares, and merchandise, and advertise and represent and hold forth the same as being sold as such insurance, bankrupt, insolvent, assignee, trustee, testator, executor, administrator, receiver, syndicate, wholesaler, or manufacturer, or closing out sale, or as a sale of any goods, wares, and merchandise damaged by smoke, fire, water, or otherwise, as shown in the affidavit.

The affidavit must be sworn to by the applicant before a person authorized to administer oaths.

Source:

S.L. 1955, ch. 301, § 5; R.C. 1943, 1957 Supp., § 51-0405; S.L. 1975, ch. 106, § 545; 1979, ch. 515, § 4.

51-04-06. Evidence.

When it appears that any stock of goods, wares, and merchandise has been brought into any county of this state by a person not a resident of the county, and that it is claimed, represented, or advertised that such stock is to be closed out at reduced prices, such facts are prima facie evidence that the person, copartnership, corporation, limited liability company, or agency so offering the goods, wares, and merchandise for sale is a transient merchant.

Source:

S.L. 1955, ch. 301, § 6; R.C. 1943, 1957 Supp., § 51-0406; S.L. 1993, ch. 54, § 106.

51-04-07. Service of process — Appointment of agent.

  1. A transient merchant may not engage in any temporary business, or be licensed by any city, without first having complied with this section.
  2. Prior to the issuance of a transient merchant license and approval of the transient merchant’s bond, the applicant shall in writing appoint the attorney general as the applicant’s agent to accept service of process in any action or proceeding involving the applicant and arising out of the sale for which the license is sought.
  3. Each transient merchant required by the attorney general to do so shall appoint an agent in this state who is a resident of this state. The agent shall accept service of process on behalf of the transient merchant in any suit filed against the transient merchant and the agent is responsible for processing any warranty, claim, or merchandise sold by the transient merchant.
  4. The name and street address of the agent must be filed with the attorney general’s office. In addition, the name and address of the agent must be furnished in writing to each person purchasing an item from the transient merchant along with a written statement that the agent is the proper person to accept service of process in any suit filed against the vendor and is the proper person to process any warranty claim.

Source:

S.L. 1955, ch. 301, § 7; R.C. 1943, 1957 Supp., § 51-0407; S.L. 1979, ch. 515, § 5; 1983, ch. 529, § 3.

51-04-08. Certain excepted sales.

The provisions of this chapter do not apply to the following:

  1. Sales made to dealers by commercial travelers or selling agents in the usual course of business.
  2. Sales made by persons soliciting orders of goods, wares, merchandise, or personal property for future delivery, and not from a stock or supply carried by the solicitor or otherwise available for immediate delivery to the purchaser, in which the solicitor does not demand or accept payment of any money or deposit in advance or on delivery without first providing the purchaser with the privilege of examination of the goods, wares, merchandise, or personal property.
  3. Sales made by a person who has a sales or use tax permit in accordance with chapter 57-39.2 or 57-40.2, pays contributions to job service North Dakota for unemployment compensation in accordance with chapter 52-04, and who has reported to workforce safety and insurance in accordance with chapter 65-04.
  4. Sales made by a seller at residential premises pursuant to an invitation issued by the owner or legal occupant of such premises.

Source:

S.L. 1955, ch. 301, § 8; R.C. 1943, 1957 Supp., § 51-0408; S.L. 1979, ch. 515, § 6; 1987, ch. 587, § 3; 2003, ch. 561, § 3.

51-04-08.1. Exceptions to requirement of a transient merchant’s license.

A transient merchant selling merchandise only in flea markets, craft fairs, fairs, carnivals, circuses, or similar activities regulated by city or county governments, fair associations, convention bureaus, other political subdivisions, or local trade organizations is exempt from the requirements of sections 51-04-02 and 51-04-03.

Source:

S.L. 1985, ch. 540, § 1.

51-04-09. Regulation by city or other municipality.

Nothing in this chapter may be construed as prohibiting, or in any way limiting or interfering with, the right of any city or other municipal corporation or governmental subdivision of the state to regulate or license the carrying on within such municipality the business of a transient merchant if authority has been, or shall hereafter be, conferred upon it so to do, but the requirements of this chapter are in addition thereto. The governing body of a city or other municipal corporation or governmental subdivision, by resolution, ordinance, or order, may require transient merchants licensed under this chapter and making or intending to make sales within the city limits to comply with any reasonable regulations, in addition to this chapter, as that body may deem necessary for their local control and may require the payment by every such merchant of a per diem license fee not exceeding twenty-five dollars. Every such merchant making sales or offering to do so without complying with the regulations applicable to transient merchants is subject to the penalty provided as if no state license had been issued by the attorney general.

Source:

S.L. 1955, ch. 301, § 9; R.C. 1943, 1957 Supp., § 51-0409; S.L. 1987, ch. 587, § 4.

Collateral References.

Authorization, prohibition or regulation by municipality of the sale of merchandise on streets or highways, or their use for such purpose, 14 A.L.R.3d 896.

51-04-10. Penalty.

Any person violating any of the provisions of this chapter, for which another penalty is not specifically provided, is guilty of a class B misdemeanor. The state’s attorney or attorney general may enforce this chapter. The attorney general in enforcing this chapter has all the powers provided in this chapter and chapter 51-15 and may seek all remedies in this chapter and chapter 51-15. A violation of this chapter constitutes a violation of chapter 51-15. The remedies, duties, prohibitions, and penalties of this chapter are not exclusive and are in addition to all other causes of action, remedies, and penalties in chapter 51-15, or otherwise provided by law. The attorney general may bring an action pursuant to this section in either the county where the transient merchant conducted business or Burleigh County.

Source:

S.L. 1955, ch. 301, § 10; R.C. 1943, 1957 Supp., § 51-0410; S.L. 1975, ch. 106, § 546; 2015, ch. 350, § 1, eff August 1, 2015.

Effective Date.

The 2015 amendment of this section by section 1 of chapter 350, S.L. 2015 became effective August 1, 2015.

CHAPTER 51-05 Auctioneers and Auction Sales [Repealed]

[Repealed by S.L. 1975, ch. 106, § 673; S.L. 1975, ch. 449, § 2; and S.L. 1975, ch. 524, § 2]

Note.

For present provisions, see chapter 51-05.1.

CHAPTER 51-05.1 Auctioneers’ and Clerks’ Licenses

51-05.1-01. Auctioneering or clerking without a license prohibited.

No person may conduct a sale as an auctioneer or clerk unless licensed by the public service commission.

Source:

S.L. 1975, ch. 449, § 1; 1981, ch. 497, § 1; 1983, ch. 530, § 1; 1987, ch. 588, § 2.

Cross-References.

Authority of auctioneer, see chapter 3-05.

DECISIONS UNDER PRIOR LAW

Failure to Comply with Notice Requirements.

Failure to comply with this statute as to giving of notice of sale of mortgaged property did not invalidate such sale where county treasurer and sheriff had notice of sale by agreement of mortgagor and mortgagee, and where latter officers required payment of taxes before sale was made. Regional Agric. Credit Corp. v. Griggs County, 73 N.D. 1, 10 N.W.2d 861, 1943 N.D. LEXIS 56 (N.D. 1943).

Collateral References.

Auctions and Auctioneers 1-13.

Title to goods, as between purchaser from, and one who entrusted them to, auctioneer, 36 A.L.R.2d 1362.

Withdrawal of property from auction sale, 37 A.L.R.2d 1049.

Jewelry auctions, regulation and licensing of, 53 A.L.R.2d 1433.

Title, condition or quality of goods, liability of auctioneer or clerk to buyer as to, 80 A.L.R.2d 1237.

Conversion, personal liability of auctioneer to owner or mortgagee for, 96 A.L.R.2d 208.

Default: liability of defaulting purchaser to owner’s broker or auctioneer, 30 A.L.R.3d 1395.

Liability of auctioneer under doctrine of strict products liability, 83 A.L.R.4th 1188.

51-05.1-01.1. Auctioneer’s license — Clerk’s license — Fees — Bonds.

  1. The initial and renewal application for an annual auctioneer’s or clerk’s license must be submitted on forms designated by the commission, and must show the name, residence, and address of the applicant. The fee for the annual license or renewal is fifty dollars and must accompany the application. The name and license number must appear on all advertising of sales conducted by an auctioneer or clerk. Renewals that are not received by December thirty-first must be assessed an additional twenty-five dollar fee.
  2. Before a license is issued to an auctioneer or clerk, the applicant must file a corporate surety bond with the commission. This bond must provide annual coverage of not less than five thousand dollars for an auctioneer or ten thousand dollars for a clerk, must run to the state of North Dakota, and must be for the benefit of any person injured by the licensee’s improper conduct. Bonds may not be canceled on less than sixty days’ written notice to the commission. When notice of cancellation is received by the commission, the commission, without hearing, shall revoke the license for which the bond was issued effective with the effective date of the cancellation, unless the licensee files a new bond or evidence that the bond will be reinstated before the effective date of the cancellation. The size of the licensee’s bond must be clearly and prominently stated in all contracts with sellers.

Source:

S.L. 1987, ch. 70, § 16; 1987, ch. 588, § 3; 1993, ch. 490, § 1; 2001, ch. 440, § 1; 2003, ch. 433, § 1; 2005, ch. 438, § 1; 2021, ch. 379, § 2, eff July 1, 2021.

51-05.1-01.2. Exemptions.

A license under this chapter is not required for the following:

  1. Sale of an estate by an executor or an administrator.
  2. Sale by a sheriff or other person under court order.
  3. Sale by a public official acting in an official capacity.
  4. Sale of purebred or registered livestock.

A bond is not required for a federally insured financial institution to clerk a sale. Persons exempt from licensing or bonding under this section shall comply with all other provisions of this chapter.

Source:

S.L. 1987, ch. 588, § 4.

51-05.1-02. License standards.

  1. Licenses may be granted only to persons who bear a good reputation for honesty, truthfulness, and fair dealing and who are competent to transact the business of an auctioneer or a clerk.
  2. An applicant for a license must be at least eighteen years of age. Every applicant for a license as an auctioneer shall:
    1. Have been actively engaged as a licensed auctioneer for a period of at least one year preceding the date of application; or
    2. Furnish proof of satisfactory completion of an approved course of study relating to auctioneers.
  3. The commission may request a first-time applicant for a license to pass a criminal background check. An applicant shall pay the costs associated with the performance of a criminal background check.

Source:

S.L. 1975, ch. 449, § 1; 1987, ch. 588, § 5; 2021, ch. 379, § 3, eff July 1, 2021.

51-05.1-02.1. Conviction not bar to licensure — Exceptions.

Conviction of an offense does not disqualify a person from licensure under this chapter unless the public service commission determines that the offense has a direct bearing upon a person’s ability to serve the public as an auctioneer, or that, following conviction of any offense, the person is not sufficiently rehabilitated under section 12.1-33-02.1.

Source:

S.L. 1977, ch. 130, § 70.

Cross-References.

Definition of offense, see § 12.1-01-04.

51-05.1-03. Investigation — Grounds for refusal, suspension, or revocation of license — Hearing on appeal.

  1. The public service commission upon its own motion may, and upon the verified complaint in writing of any person shall, investigate the activities of any licensee or any person who shall assume to act in such capacity within the state and shall have the power to suspend or revoke a license when the licensee, in performing or attempting to perform any of the acts included within the scope of this chapter, has performed one or more of the following:
    1. Made a material false statement in the licensee’s application for a license or in any information furnished to the commission.
    2. Made a substantial and willful misrepresentation relating to an auction sale which injures the party for which the licensee acts as agent.
    3. Made any false promise of a character such as to influence, persuade, or induce a party to an auction sale to that party’s injury or damage.
    4. Failed to account for or to remit, within a reasonable time, not exceeding thirty days, any moneys coming into the licensee’s possession belonging to another, commingled funds of others with the licensee’s own, failed to keep such funds or others in an escrow or trust account with a bank or other recognized depository in this state, or failed to keep records relative to the deposits, which must contain such information as prescribed by the rules of the commission.
    5. Pled guilty or nolo contendere before, or been convicted by, any federal court or a court of competent jurisdiction in this or any other state of an offense determined by the commission to have a direct bearing upon a person’s ability to serve the public as an auctioneer, or the board determines, following conviction of any offense, that the person is not sufficiently rehabilitated under section 12.1-33-02.1.
    6. Failed or refused upon demand to produce any document, book, or records in the licensee’s possession or under the licensee’s control, concerning any auction sale under investigation by the commission.
    7. Failed to deliver to the seller in every auction sale a complete, detailed closing statement showing all the receipts and disbursements handled by such licensee for the seller and to retain true copies of such statements in the licensee’s files for two years.
    8. Violated any provisions of this chapter or chapter 41-02, 51-12, or 51-15, or rule or regulation promulgated by the commission.
  2. If the public service commission declines or fails to approve an application submitted to it, it shall immediately give notice of that fact to the applicant, and upon request from such applicant filed within twenty days after the receipt of such notice, shall fix a time and place for a hearing, of which twenty days’ notice must be given to such applicant and to other persons interested or protesting, to offer such evidence relating to the application. In such cases the commission shall fix the time for such hearing on a date within sixty days from receipt of the request for the particular hearing, provided the time of hearing may be continued from time to time with the consent of the applicant. As a result of such hearing, the commission may either approve the application if all of the applicable provisions of this chapter have been met, or it may sustain its prior decision refusing to approve the application.
  3. No license may be revoked or suspended except after hearing before the public service commission with a copy of the charges having been duly served upon the licensee and upon sustaining the charges for suspension or revocation. The provisions of chapter 28-32, including but not limited to procedures for service of process, hearing, rules, evidence, findings, and appeals, apply to and govern all proceedings for suspension or revocation of license, except when inconsistent with this chapter.

Source:

S.L. 1975, ch. 449, § 1; 1977, ch. 130, § 71; 1989, ch. 590, § 1; 1993, ch. 490, § 2; 2003, ch. 434, § 1.

Cross-References.

Definition of offense, see § 12.1-01-04.

51-05.1-04. Definitions — Exceptions.

  1. Except as provided in subsection 5, an auctioneer within the meaning of this chapter is a person who, for a compensation or valuable consideration, sells or offers for sale either real or personal property at public auction as a whole or partial vocation.
  2. Except as provided in subsection 5, a clerk within the meaning of this chapter is any person, firm, partnership, copartnership, association, corporation, or limited liability company who, for a compensation or valuable consideration, is employed either directly or indirectly by an owner while the sale is in progress to record each item offered for sale, its selling price, and the buyer’s name or number; to collect all proceeds of said sale; to pay all expenses connected with the sale; to prepare a full closing statement of all receipts and disbursements; and to make settlement thereon to parties properly entitled thereto within a reasonable length of time.
  3. “Internet auction” means the selling or offering for sale either real or personal property at public auction exclusively via the internet.
  4. “Seller” means the owner or consignor of property to be sold at auction.
  5. A person performing a single act or an isolated transaction in the selling of property at auction for another does not constitute the person performing, offering, or attempting to perform any of the acts enumerated in this section, and that person is not an auctioneer or clerk within the meaning of this chapter. A person conducting, or employed by a person conducting, an internet auction is not an auctioneer or clerk within the meaning of this chapter.
  6. Notwithstanding subsection 5, a person in this state engaged in the auto auction business via the internet must be licensed as a motor vehicle dealer as provided for in section 39-22-23.

Source:

S.L. 1975, ch. 449, § 1; 1989, ch. 590, § 2; 1993, ch. 54, § 106; 2011, ch. 371, § 1.

Effective Date.

The 2011 amendment of this section by section 1 of chapter 371, S.L. 2011 became effective July 1, 2011.

Notes to Decisions

Enforceability.

Two auction sale agreements were enforceable, and the district court did not err in its interpretation of them. The argument that the agreements were void and unenforceable because plaintiff was not licensed as an auctioneer was rejected. Pifer Group, Inc. v. Liebelt, 2015 ND 150, 864 N.W.2d 759, 2015 N.D. LEXIS 165 (N.D. 2015).

51-05.1-04.1. Written contracts.

An auctioneer may not sell the property of another at auction without a prior written contract with the seller which sets forth the terms and conditions upon which the auctioneer will sell the property. A similar contract governing the activities of the auction clerk is required between the auction clerk and the seller. The licensee must retain a copy of each contract for at least two years after the auction. This section does not apply to consignment sales when the value of the seller’s property is less than five hundred dollars or to livestock markets. The contract must contain:

  1. The licensee’s name, trade or business name, state license number, business address, and business telephone number.
  2. A general description of the property to be sold at auction, any restrictions, and a statement identifying whether or not the licensee is authorized to purchase at the auction.
  3. A description of the services to be provided and the consideration for the services. The description must state which party is responsible for advertising and other expenses.
  4. The date or dates when the items will be sold at auction.
  5. A disclosure of the amount of bond that the licensee has on file with the commission and the commission’s address and telephone number.

Source:

S.L. 1989, ch. 590, § 3; 1991, ch. 520, § 1; 1993, ch. 490, § 3.

51-05.1-04.2. Buyer’s premium.

A successful bidder may not be required to pay an amount in excess of the successful bid and governmental fees and taxes, unless before bidding the bidder has signed a statement which clearly describes the additional amount and states how the actual amount due will be determined.

Source:

S.L. 1993, ch. 490, § 4.

51-05.1-05. Handling of funds by clerk of auction sale.

Every clerk of an auction sale, at all times, shall maintain in the clerk’s name or firm name, a separate trust account designated as such in a federally insured bank or other federally insured depository in this state in which the clerk immediately shall deposit all funds not the clerk’s own, including funds in which the clerk may have some future interest or claim. A federally insured depository located outside the state but licensed as a clerk in this state is not required to deposit funds in a depository in this state if auction sale funds are deposited in a separate trust account designated as such in the licensee’s depository. A clerk may not commingle the clerk’s personal funds or other funds in a trust account except that a clerk may deposit and keep a sum of one thousand dollars in such account from the clerk’s personal funds, which sum must be specifically identified and deposited to cover service charges related to the trust account. In conjunction with such account, the clerk shall maintain at the clerk’s usual place of business books, records, and other documents so that the adequacy of such account may be determined at any time. Trust accounts and other records must be open to inspection by the public service commission and its duly authorized agents at all times during regular business hours at the clerk’s usual place of business.

Source:

S.L. 1975, ch. 449, § 1; 1985, ch. 541, § 1; 2021, ch. 380, § 1, eff August 1, 2021.

51-05.1-06. License list. [Repealed]

Repealed by S.L. 2001, ch. 440, § 2.

51-05.1-07. Penalty.

Any person violating any of the provisions of this chapter is guilty of a class B misdemeanor.

Source:

S.L. 1975, ch. 449, § 1; 1989, ch. 590, § 4.

CHAPTER 51-06 Trading Stamps and Devices

51-06-01. Cash value of trading stamps — Redemption.

All stamps, coupons, tickets, certificates, cards, or similar devices, hereinafter called trading stamps, which are furnished to any person in the course of the sale of goods or merchandise which may entitle the person holding such trading stamps to receive or procure from any person goods or merchandise free of charge or for less than the retail market price thereof, the value of such trading stamps excluded, shall have the cash value of each trading stamp stated on the face thereof. All such trading stamps must, at the option of the holder, be redeemable in cash at any office or agency of the trading stamp company redeeming the trading stamps in merchandise or at any business establishment furnishing such trading stamps with the sale of merchandise. Provided, further, that the provisions of this chapter do not apply to any coupon, ticket, certificate, card, or other similar device issued or distributed by a manufacturer or packer, which is redeemable for any goods, wares, or merchandise, either by the manufacturer or packer, or their agents, or an independent contractor acting for redemption.

Source:

S.L. 1957, ch. 324, § 1; R.C. 1943, 1957 Supp., § 51-0601.

DECISIONS UNDER PRIOR LAW

Applicability.

The North Dakota Trading Stamp Act, S.L. 1917, ch. 238, related only to trading stamps redeemable in goods, wares, and merchandise, and did not prohibit or regulate the sale of trading stamps redeemable in cash only. Olson v. Ross, 39 N.D. 372, 167 N.W. 385, 1918 N.D. LEXIS 33 (N.D. 1918).

51-06-02. Retention of redemption funds.

Any person, firm, corporation, limited liability company, or association furnishing trading stamps to retailers and agreeing to redeem trading stamps as provided in this chapter may not discontinue the redemption of trading stamps without first notifying the secretary of state of such intention to discontinue redemption. Upon such notice, the secretary of state shall direct that all funds set aside by the person, firm, corporation, limited liability company, or association for the redemption of trading stamps and such additional funds as in the judgment of the secretary of state may be necessary, be retained by such person, firm, corporation, limited liability company, or association responsible for the redemption of trading stamps for a period of six months for the purpose of redeeming outstanding stamps in merchandise or reimbursing the holders thereof in cash. The secretary of state may require the filing of an acceptable surety bond conditioned upon the redemption of outstanding trading stamps or the reimbursement of the holders thereof.

Source:

S.L. 1957, ch. 324, § 2; R.C. 1943, 1957 Supp., § 51-0602; S.L. 1993, ch. 54, § 106.

51-06-03. Penalty.

Any person violating any of the provisions of this chapter is guilty of a class B misdemeanor.

Source:

S.L. 1957, ch. 324, § 3; R.C. 1943, 1957 Supp., § 51-0603; S.L. 1975, ch. 106, § 547.

CHAPTER 51-07 Miscellaneous Provisions

51-07-31 Parts, equipment, and accessory dealers reimbursed for warranty repair.

51-07-00.1. Definitions.

As used in sections 51-07-01, 51-07-02.1, 51-07-02.2, 51-07-02.3, 51-07-02.4, and 51-07-03 unless the context or subject matter otherwise requires:

  1. “Contract” means any written franchise agreement, sales agreement, dealer agreement, or security agreement, or other form of agreement or arrangement of like effect.
  2. “Dealer” means a person that engages in the business of selling, at retail, new motor vehicles or trucks or new and used motor vehicles or trucks and possesses a current new motor vehicle dealer license as defined in section 39-22-16.
  3. “Distributor” means any person who in whole or in part offers for sale, sells, or distributes any new motor vehicle to a new motor vehicle dealer, and any person that in whole or in part offers for sale, sells, or distributes any farm implement, machinery, or attachment or part for the same; or lawn and garden equipment, or part for the same; or semitrailer, or part for the same, to any person that retails all or any of these items.
  4. “Franchise” or “franchise agreement” means any contract or addendum to a contract between a dealer and a manufacturer or distributor that authorizes the dealer to engage in the business of selling or purchasing any particular make of new motor vehicles or motor vehicle parts manufactured or distributed by the manufacturer or distributor.
  5. “Franchisor” means a person that manufactures, imports, or distributes new motor vehicles and which may enter a franchise agreement.
  6. “Good cause” means failure by a new motor vehicle dealer to substantially comply with material and reasonable requirements imposed upon the new motor vehicle dealer by the franchise agreement if the requirements are not unreasonable when compared to those requirements imposed on other similarly situated new motor vehicle dealers.
  7. “Good faith” means honesty in fact and the observance of commercially reasonable, nondiscriminatory standards of fair dealing.
  8. “Manufacturer” means any person that is engaged in the business of manufacturing or assembling new motor vehicles or any person that in whole or in part offers for sale, sells, or distributes any new motor vehicle to a new motor vehicle dealer.
  9. “Merchandise” means farm implements, machinery, attachments, and parts for the same; lawn and garden equipment and parts for the same; and automobiles, trucks, and semitrailers and parts for the same.
  10. “New motor vehicle” means a motor vehicle that has not been subject to a retail sale, the registration provisions of chapter 39-04, the title registration provisions of chapter 39-05, or the motor vehicle excise tax provisions of chapter 57-40.3.
  11. “Owner” means a person, other than a lienholder, having the property in or title to a vehicle. The term includes a person entitled to the use and possession of a vehicle subject to a security interest in another person, but excludes a lessee under a lease not intended as security.
  12. “Semitrailer” includes every vehicle of the trailer type so designed and used in conjunction with a truck that some part of its own weight and that of its own load rests upon or is carried by a truck, except that it does not include a mobile home.
  13. “Successor” means the individual who, in the case of the owner’s death, is entitled to inherit the ownership interest in the new motor vehicle dealership or who, in the case of an incapacitated owner of a new motor vehicle dealer, has been appointed by a court as the legal representative of the new motor vehicle dealer’s property subject to sections 51-07-26 and 51-07-26.1.
  14. “Truck” includes every motor vehicle designed, used, or maintained primarily for transportation of property or designed and used primarily for drawing other vehicles and not so constructed as to carry a load other than a part of the weight of the vehicle and load so drawn.
  15. “Used motor vehicle” means a motor vehicle that has been subject to a retail sale, the registration provisions of chapter 39-04, the title registration provisions of chapter 39-05, or the motor vehicle excise tax provisions of chapter 57-40.3.

Source:

S.L. 2011, ch. 372, § 1.

Effective Date.

This section became effective April 20, 2011, pursuant to an emergency clause in section 5 of chapter 372, S.L. 2011.

Note.

Section 4 of chapter 372, S.L. 2011 provides: “ APPLICATION. This Act applies to all dealership agreements in effect on the effective date of this Act (April 20, 2011) which do not have an expiration date and which are continuing contracts and all other contracts entered, amended, or renewed on or after the effective date of this Act (April 20, 2011). A contract in effect on the effective date of this Act (April 20, 2011), which by its terms will terminate on a date after that date and which is not renewed, is governed by the law as it existed before the effective date of this Act (April 20, 2011).”

51-07-01. Retail farm implement; lawn and garden equipment; or vehicle dealer may recover price of merchandise upon discontinuance of contract by wholesaler or retail dealer.

  1. If a person engaged in the business of retailing farm implements, machinery, or attachments, or parts for the same; lawn and garden equipment, or parts for the same; or automobiles, trucks, or semitrailers, or parts for the same, enters a contract under which the retailer agrees to maintain a stock of the merchandise covered under this section with a wholesaler, manufacturer, or distributor of the covered merchandise and tools and the wholesaler, manufacturer, or distributor or the retailer desires to cancel or discontinue the contract, the wholesaler, manufacturer, or distributor shall pay to the retailer, unless the retailer desires to keep the merchandise, a sum equal to:
    1. One hundred percent of the net cost of all current unused complete farm implements, machinery, and attachments; lawn and garden equipment; and automobiles, trucks, and semitrailers.
    2. One hundred percent of the actual merchandise and tool transportation charges that have been paid by the retailer.
    3. Ninety percent of the net prices on parts, including superseded parts, as shown in the manufacturer’s, wholesaler’s, or distributor’s current price lists or catalogs in effect at the time the contract is canceled, discontinued, or not renewed. These parts must have previously been purchased from the wholesaler, manufacturer, or distributor, and must have been either held by the retailer on the date of the cancellation of, discontinuance of, or failure to renew the contract or received by the retailer from the wholesaler, manufacturer, or distributor after the date of the cancellation, discontinuance, or failure to renew.
    4. Fifty percent of the net cost of all complete specialized tools for the covered merchandise.
    5. Five percent of the current net price of all parts returned for the handling, packing, and loading of the parts back to the wholesaler, manufacturer, or distributor.
  2. Upon the payment of the amounts under subsection 1, the retailer shall pass the title to the covered merchandise and tools to the manufacturer, wholesaler, or distributor making the payment, and the manufacturer, wholesaler, or distributor is entitled to the possession of the covered merchandise and tools. All payments required to be made under this section must be made within thirty days after the final settlement between the retailer and the wholesaler, manufacturer, or distributor.
  3. The provisions of this section are supplemental to any agreement between the retailer and the manufacturer, wholesaler, or distributor covering the return of any merchandise and tools covered under this section. The retailer can elect to pursue either the retailer’s contract remedy or the remedy provided in this section. An election by the retailer to pursue the retailer’s contract remedy does not bar the retailer’s right to the remedy provided in this section as to any merchandise and tools covered under this section which is not affected by the contract remedy.
  4. The obligations of any wholesaler, manufacturer, or distributor under this section and sections 51-07-01.1 and 51-07-03 apply to any successor in interest or assignee of that wholesaler, manufacturer, or distributor. A successor in interest includes any purchaser of assets or stock, any surviving corporation or limited liability company resulting from a merger or liquidation, any receiver, or any trustee of the original wholesaler, manufacturer, or distributor.
  5. The provisions of this section apply to all contracts now in effect which have no expiration date and are a continuing contract, and all other contracts entered or renewed after July 31, 2003. Any contract in force and effect on August 1, 2003, which by its own terms will terminate on a date subsequent thereto is governed by the law as it existed before August 1, 2003.

Source:

S.L. 1937, ch. 125, §§ 1, 3; R.C. 1943, § 51-0701; S.L. 1961, ch. 309, § 1; 1963, ch.329, § 1; 1971, ch. 472, § 1; 1987, ch. 589, § 1; 1993, ch. 54, § 106; 2001, ch. 441, § 1; 2003, ch. 435, § 1.

Notes to Decisions

Constitutionality.

This statute is rationally related to the state’s significant and legitimate interest in providing protection to distributors of vehicles and farm implements and does not violate the state or federal constitutional standards of interstate commerce, of impairment of contractual obligations, of deprivation of property without due process of law, and of special privileges and immunities. Hall GMC v. Crane Carrier Co., 332 N.W.2d 54, 1983 N.D. LEXIS 256 (N.D. 1983).

The state’s strong interest in protecting distributors, coupled with the conclusion that courts will defer to legislative judgment to determine the appropriateness of the action taken to remedy the societal harm, lends itself to the conclusion that this section does not violate the contract clause of the United States Constitution. Farmers Union Oil Co. v. Allied Prods. Corp., 162 B.R. 834, 1993 U.S. Dist. LEXIS 18818 (D.N.D. 1993).

Construction of Section.

Construing this section in its entirety, paragraph one is the substantive portion of the statute, while paragraphs two and three pertain to its ancillary application. Bostow v. Lundell Mfg. Co., 376 N.W.2d 20, 1985 N.D. LEXIS 418 (N.D. 1985).

Discharge in Bankruptcy.

The bankruptcy court order absolving defendant of liability of all liens, claims and encumbrances did not preempt the operation of this section, nor did the parties’ agreement. Farmers Union Oil Co. v. Allied Prods. Corp., 162 B.R. 834, 1993 U.S. Dist. LEXIS 18818 (D.N.D. 1993).

Election of Remedies.

Retailer could not dispose of a portion of farm machinery at his own price and then force wholesaler to take the balance under provisions of this statute, the sale by retailer being an election on his part to keep the merchandise. Kaisershot v. Gamble-Skogmo, Inc., 96 N.W.2d 666, 1959 N.D. LEXIS 85 (N.D. 1959).

Purpose of Section.

This section was intended to remedy the problem which arises when a dealer has been required by the terms of a franchise agreement to invest in purchases of equipment in order to maintain a specified level of inventory parts or machinery, thereby using cash assets that would ordinarily be available for operating expenses. In such instances, the manufacturer shares the fault, should the situation arise where the dealer is unable to continue in business. In re Hausauer Implement Co., 35 B.R. 661, 1983 Bankr. LEXIS 4838 (Bankr. D.N.D. 1983).

Written Contracts.

This section applied to written contracts only. Bostow v. Lundell Mfg. Co., 376 N.W.2d 20, 1985 N.D. LEXIS 418 (N.D. 1985).

The 1961 amendment to this section reflects the legislature’s intention to change the earlier law and to limit the statute’s coverage to written contracts. Bostow v. Lundell Mfg. Co., 376 N.W.2d 20, 1985 N.D. LEXIS 418 (N.D. 1985).

The second paragraph of this section, which was added by amendment in 1971, was designed to insure that a retailer’s election to pursue his contract remedy does not bar his right to the statutory remedy. Nowhere does the legislative history of this 1971 amendment indicate any legislative intent to contradict the specific reference in the first paragraph to a written contract so as to expand the statute’s coverage to include oral contract. Bostow v. Lundell Mfg. Co., 376 N.W.2d 20, 1985 N.D. LEXIS 418 (N.D. 1985).

The third paragraph of this section does not denote any legislative intent to place all contracts, written and oral, within the coverage of this section. Bostow v. Lundell Mfg. Co., 376 N.W.2d 20, 1985 N.D. LEXIS 418 (N.D. 1985).

This section is not applicable in instances where the written agreement does not specifically require the dealer to maintain a stock of parts or whole machines. In re Hausauer Implement Co., 35 B.R. 661, 1983 Bankr. LEXIS 4838 (Bankr. D.N.D. 1983).

Collateral References.

Validity, construction, and application of state statutes regulating dealings between automobile manufacturers, dealers, and franchisees, 82 A.L.R.4th 624.

51-07-01.1. Termination of retail contract to be done in good faith — Definition of good cause.

  1. Any manufacturer, wholesaler, or distributor of merchandise and tools covered under section 51-07-01, excluding automobile dealers, truck dealers, or parts dealers of the automobiles or trucks, that enters a contract with any person engaged in the business of retailing the covered merchandise by which the retailer agrees to maintain a stock of the covered merchandise may not terminate, cancel, or fail to renew the contract with the retailer without good cause.
  2. For the purpose of this section, good cause for terminating, canceling, or failing to renew a contract is limited to failure by the retailer to substantially comply with those essential and reasonable requirements imposed by the contract between the parties if the requirements are not different from those requirements imposed on other similarly situated retailers. The determination by the manufacturer, wholesaler, or distributor of good cause for the termination, cancellation, or failure to renew must be made in good faith.
  3. In any action against a manufacturer, wholesaler, or distributor for violation of this section, the manufacturer, wholesaler, or distributor shall establish that the termination, cancellation, or failure to renew was made in good faith for good cause. If a notice of termination is issued and the dealer challenges the notice by filing an action, there is an automatic stay during the pendency of the action. If the manufacturer, wholesaler, or distributor fails to establish good cause for its action, the manufacturer, wholesaler, or distributor is liable for all special and general damages sustained by the plaintiff, including the costs of the litigation and reasonable attorney’s fees for prosecuting the action and the plaintiff, if appropriate, is entitled to injunctive relief. This section applies to all contracts now in effect which have no expiration date and are continuing contracts and all other contracts entered, amended, or renewed after July 31, 2003. Any contract in force and effect on August 1, 2003, which by its terms will terminate on a date subsequent thereto is governed by the law as it existed before August 1, 2003.

Source:

S.L. 1975, ch. 450, § 1; 1987, ch. 589, § 2; 1993, ch. 54, § 106; 2001, ch. 441, § 2; 2003, ch. 435, § 2; 2005, ch. 439, § 1.

Notes to Decisions

Attorney’s Fees and Costs.

Because plaintiff had not yet sent defendant a notice of termination of the parties’ dealership agreement, defendant was not entitled to costs or attorney’s fees under N.D.C.C. § 51-07-01.1(3), so defendant’s request for the same was premature. CNH Am. LLC v. Magic City Implement, Inc., 2011 U.S. Dist. LEXIS 9641 (D.N.D. Jan. 31, 2011).

Evidence Excluded.

Where defendant in action brought under this section for bad faith termination of farm implement dealership moved to exclude evidence about another, non-party dealership, evidence proffered at hearing on motion in limine established plaintiff and other dealership were not in substantially similar financial condition, so that the evidence was of limited probative value and the trial court did not abuse its discretion by excluding the evidence. Williston Farm Equip. v. Steiger Tractor, 504 N.W.2d 545, 1993 N.D. LEXIS 151 (N.D. 1993).

Good Cause.

Where dealer was in default on his payments to manufacturer for three equipment purchases, he breached the dealership contract, thereby giving manufacturer good cause, for purposes of this section, to terminate the dealership agreement. Foley Equip. v. Krause Plow Corp., 456 N.W.2d 121, 1990 N.D. LEXIS 114 (N.D. 1990).

“Good cause” under this section must relate to a dealer’s compliance with the requirements imposed by a written dealership agreement and a manufacturer must make a good faith determination about good cause. Williston Farm Equip. v. Steiger Tractor, 504 N.W.2d 545, 1993 N.D. LEXIS 151 (N.D. 1993).

Good Faith.

Where it was undisputed that dealer was in default on payments to manufacturer, trial court’s finding that manufacturer’s termination of the dealership agreement was not in bad faith was one of law. Foley Equip. v. Krause Plow Corp., 456 N.W.2d 121, 1990 N.D. LEXIS 114 (N.D. 1990).

Evidence about a manufacturer’s treatment of other similarly situated dealerships in an action for bad faith termination of a farm implement dealership under this section may have some probative value to establish “good cause” and “good faith” for the termination of the dealership agreement. Where plaintiff and another dealership were not in substantially similar financial condition, exclusion of the evidence about the non-party dealership was not abuse of discretion. Williston Farm Equip. v. Steiger Tractor, 504 N.W.2d 545, 1993 N.D. LEXIS 151 (N.D. 1993).

Defendant’s counterclaim for a declaratory judgment that plaintiff did not have good cause under N.D.C.C. § 51-07-01.1 to terminate the parties’ dealership agreement and that any such termination by plaintiff would be in bad faith would not be dismissed because it was not duplicative of plaintiff’s claim for a declaratory judgment that it had good cause to terminate the agreement. Because plaintiff had not yet sent defendant a notice of termination, defendant was not entitled to costs or attorney’s fees under N.D.C.C. § 51-07-01.1(3), so defendant’s request for the same was premature. CNH Am. LLC v. Magic City Implement, Inc., 2011 U.S. Dist. LEXIS 9641 (D.N.D. Jan. 31, 2011).

Defendant’s counterclaim for breach of contract and the covenant of good faith and fair dealing under N.D.C.C. §§ 41-01-18 and N.D.C.C. § 51-07-01.1(3) would not be dismissed because the primary issue in both the complaint and the counterclaim was whether the parties’ dealership agreement could be terminated in good faith and for cause, and the counterclaim contained sufficient facts to survive a motion to dismiss. CNH Am. LLC v. Magic City Implement, Inc., 2011 U.S. Dist. LEXIS 9641 (D.N.D. Jan. 31, 2011).

Purpose.

The purpose of this section is to equalize the disparity in bargaining power between manufacturers and dealers, and to protect dealers from a termination based solely upon a manufacturer’s subjective whim and caprice. Williston Farm Equip. v. Steiger Tractor, 504 N.W.2d 545, 1993 N.D. LEXIS 151 (N.D. 1993).

Termination by Retailer.

This section is not applicable where the retailer is the one who terminates the contract. Hall GMC v. Crane Carrier Co., 332 N.W.2d 54, 1983 N.D. LEXIS 256 (N.D. 1983).

51-07-01.2. Prohibited practices under farm equipment dealership contracts.

  1. Notwithstanding the terms of any contract, a manufacturer, wholesaler, or distributor of farm implements, machinery, or repair parts who enters into a contract with any person engaged in the business of selling and retailing farm implements and repair parts for farm implements may not:
    1. Require or attempt to require a farm equipment dealer to accept delivery of farm equipment, parts, or accessories that the farm equipment dealer has not voluntarily ordered or require the farm equipment dealer to maintain or stock a level of equipment, parts, or accessories except as provided in subdivision b.
    2. Condition or attempt to condition the sale of farm equipment, parts, or accessories on a requirement that the farm equipment dealer also purchase other goods or services, or purchase a minimum quantity of farm equipment as a condition of filling an order for farm equipment, except a farm equipment manufacturer may require the dealer to purchase all parts reasonably necessary to maintain the quality of operation in the field of any farm equipment used in the trade area and telecommunication necessary to communicate with the farm equipment manufacturer.
    3. Require or attempt to require a farm equipment dealer into a refusal to purchase farm equipment manufactured by another farm equipment manufacturer.
    4. Require a farm equipment dealer to separate the line-makes operating within the dealer’s facility by requiring the separation of personnel, inventory, service areas, display space, or otherwise dictate the method, manner, number of units, or the location of farm equipment displays at the dealer’s facility. This subdivision does not prevent a farm equipment dealer and manufacturer from agreeing to those terms if the agreement was supported by separate and valuable consideration. The issuance, reissuance, or extension of a dealership contract alone is not separate and valuable consideration.
    5. Require a farm equipment dealer to either establish or maintain exclusive facilities, personnel, or display space or to abandon an existing relationship with another manufacturer in order to continue, renew, reinstate, or enter a dealer agreement or to participate in any program discount, credit, rebate, or sales incentive. This subdivision does not prevent a farm equipment dealer and manufacturer from agreeing to establish or maintain exclusive facilities for separate and valuable consideration. The issuance, reissuance, or extension of a dealership contract alone is not separate and valuable consideration.
    6. Discriminate in the prices charged for farm equipment of similar grade and quality sold by the farm equipment manufacturer to similarly situated farm equipment dealers. This subdivision does not prevent the use of differentials that make only due allowance for differences in the cost of manufacture, sale, or delivery or for the differing methods or quantities in which the farm equipment is sold or delivered by the farm equipment manufacturer. This subdivision does not diminish the manufacturer’s, wholesaler’s, or distributor’s ability to provide volume discounts, bonuses, or special machine ordering programs commonly used in the industry.
    7. Attempt or threaten to terminate, cancel, fail to renew, or substantially change the competitive circumstances of the dealership contract for any reason other than failure of the farm equipment dealer to substantially comply with the material terms of the written contract between the parties or if the attempt or threat is based on the results of a circumstance beyond the farm equipment dealer’s control, including a sustained drought or other natural disaster in the dealership market area or a labor dispute. A substantial change in the competitive circumstances includes the removal of authorization to operate at a location from where the dealer is currently operating or the unreasonable removal of a product line or segment.
    8. Require a farm equipment dealer to unreasonably remodel, renovate, or recondition the dealer’s facilities, change the location of the facilities, or make unreasonable alterations to the dealership premises. A request for a dealer to remodel, renovate, or recondition the dealer’s facilities, change the location of the facilities, or make alterations to the dealership premises must be considered in light of current and reasonably foreseeable projections of economic conditions, financial expectations, and the dealer’s market for the sale of farm equipment. A facility modification request is unreasonable if the request is within seven years of a farm equipment dealer’s most recent facility remodel, renovation, or reconditioning.
    9. Unreasonably prevent or refuse to approve the relocation of a dealership to another site within the dealer’s relevant market area. The dealer shall provide the manufacturer or distributor with notice of the proposed address and a reasonable site plan of the proposed location. The manufacturer or distributor shall approve or deny the request in writing within sixty days after receipt of the request. Failure to deny the request within sixty days is deemed an approval.
    10. Conduct a warranty or incentive audit or seek a chargeback on a warranty or incentive payment more than one year after the date of the warranty or incentive payment. A manufacturer may not charge back a dealer for an incentive or warranty payment unless the manufacturer can satisfy its burden of proof that the dealer’s claim was false, fraudulent, or the dealer did not substantially comply with the reasonable written procedures of the manufacturer. The audit and chargeback provisions in this subdivision apply to all incentive and reimbursement programs that are subject to audit by a manufacturer. Before imposing a chargeback, a manufacturer shall identify each claim at issue and provide the dealer with written explanation for the proposed chargeback for each claim. The cumulative value of any chargeback, fees, penalties, or adverse action for an individual claim may not exceed the total direct compensation received by the dealer for the claim at issue. Thereafter, the manufacturer shall provide the dealer a reasonable time, no less than forty-five days, to present additional information regarding a claim at issue.
    11. Use an unreasonable, arbitrary, or unfair sales, service, or other performance standard in determining a farm equipment dealer’s compliance with a contract or program. Before applying any sales, service, or other performance standard to a farm equipment dealer, a manufacturer shall communicate the performance standard in writing in a clear and concise manner, including a detailed explanation of the criteria, calculations, methodology, and data used to establish the standard.
    12. Require a farm equipment dealer in this state to enter an agreement with the manufacturer or any other party which requires:
      1. The law of another jurisdiction to apply to a dispute between the dealer and manufacturer;
      2. The dealer to bring an action against the manufacturer in a venue outside of this state;
      3. The dealer waive the right to have all of this state’s statutory and common law apply;
      4. Reducing, modifying, or eliminating the dealer’s right to resolve a dispute in a state or federal court in this state; or
      5. The dealer to agree to arbitration or waive their rights to bring a cause of action against the manufacturer, unless done in connection with a settlement agreement to resolve a matter between a manufacturer and the dealer. The settlement agreement must be entered voluntarily for separate and valuable consideration. Renewal, reinstatement, or continuation of a dealer agreement alone is not separate and valuable consideration.
  2. As used in this section “farm equipment” and “farm implements” means all vehicular implements and attachment units, designed and used primarily for planting, cultivating, or harvesting farm products or used primarily in connection with the production of agricultural produce or products, livestock, or poultry on farms, and which are operated, drawn, or propelled by motor or animal power.

Source:

S.L. 1991, ch. 521, § 1; 2017, ch. 354, § 1, eff August 1, 2017.

51-07-02. Prices of implements, machinery, automobiles, and parts — How determined. [Repealed]

Repealed by S.L. 2003, ch. 435, § 4.

51-07-02.1. Change in automobile or truck franchise agreement — Notification requirements.

  1. At least ninety days before any change in or from an existing contract which will substantially impair the sales, the service obligations, or investment of a retailer of automobiles or trucks, or parts of the automobiles or trucks, the manufacturer, wholesaler, or distributor that is a party to the contract shall give notice by certified mail to the retailer of the intended change and the specific grounds for the change.
  2. If the manufacturer, wholesaler, or distributor fails to give the proper notice under subsection 1, the change is voidable at the option of the retailer.
  3. A contract between a manufacturer, wholesaler, or distributor and a retailer of automobiles or trucks, or parts of the automobiles or trucks, is offered for automatic renewal under the same terms unless notice is provided under subsection 1.
  4. A retailer may file an action against the manufacturer, wholesaler, or distributor for violation of this section or for a determination of whether the action proposed by the manufacturer, wholesaler, or distributor is an unfair or a prohibited change in or from the contract. Contracts and certificates of appointment continue in effect until final determination of the issues in the action.
  5. A change in or from a contract is unfair and prohibited if the change is not clearly permitted by the agreement; is not taken in good faith; is not taken for good cause; is based on an alleged breach of the agreement which is not in fact a material and substantial breach; or, if the grounds relied on for the change have not been applied in a uniform and consistent manner by the manufacturer, wholesaler, or distributor. Good faith means honesty in fact and fair dealing. The manufacturer, wholesaler, or distributor shall have the burden of proof that any action taken by the manufacturer, wholesaler, or distributor is fair and not prohibited. A manufacturer, wholesaler, or distributor that fails to carry the burden of proof is liable for all special and general damages sustained by the retailer, including the costs of litigation and reasonable attorney’s fees. If appropriate, the retailer is entitled to injunctive relief.

Source:

S.L. 2005, ch. 439, § 2.

51-07-02.2. Dealership transfers.

  1. A dealer of automobiles or trucks, farm equipment, or parts for automobiles, trucks, or farm equipment may not transfer, assign, or sell a dealer agreement to another person unless the dealer first provides written notice to the manufacturer or distributor of the intended action. Within sixty days of receiving the notice, the manufacturer or distributor must approve or deny the action. If the manufacturer or distributor denies the action, the manufacturer or distributor shall provide material reasons for the denial to the dealer. If the manufacturer or distributor does not respond within the sixty-day period, the action is deemed approved.
  2. A denial by the manufacturer or distributor to accept a proposed transferee who meets the written, reasonable, and uniformly applied standards of qualifications of the manufacturer or distributor relating to the financial qualifications of the transferee and business experience of the transferee is presumed to be unreasonable. If an action is denied by the manufacturer or distributor, the dealer may file an action for determination of a violation of this subsection. The dealer may pursue the dealer’s remedy under the contract or the remedy provided in this subsection. The manufacturer or distributor has the burden of proof regarding all issues raised in the action. The court shall approve the transfer unless the manufacturer or distributor can prove the proposed transferee does not meet the written, reasonable, and uniformly applied standards regarding financial qualifications and business experience.
  3. As used in this section, “farm equipment” has the same meaning as in section 51-07-01.2.

Source:

S.L. 2005, ch. 439, § 3; 2017, ch. 354, § 2, eff August 1, 2017.

51-07-02.3. Prohibited acts.

A manufacturer, wholesaler, or distributor of automobiles or trucks, or parts of the automobiles or trucks, that enters a contract with any person engaged in the business of selling or retailing automobiles, trucks, or parts for the automobiles or trucks, may not:

  1. Coerce or attempt to coerce the retailer into accepting delivery of automobiles, trucks, parts, or accessories that the retailer has not ordered voluntarily.
  2. Condition or attempt to condition the sale of automobiles or trucks on a requirement that the automobile or truck retailer purchase other goods or services, except that the manufacturer, wholesaler, or distributor may require a retailer to purchase all parts reasonably necessary to maintain the quality of operation and telecommunications necessary to communicate with the manufacturer, wholesaler, or distributor.
  3. Implement or establish a system of motor vehicle allocation or distribution to one or more of its dealers that is unfair, inequitable, or unreasonably discriminatory. As used in this subsection, “unfair” includes requiring a dealer to accept new vehicles not ordered by the dealer or the refusal or failure to offer to any dealer all models offered to any of its other same line-make dealers in this state. The failure to deliver any motor vehicle is not a violation of this section if failure is due to any cause over which the manufacturer does not have control.
  4. Require a dealer to pay all or any part of the cost of an advertising campaign or contest or purchase any promotional material, showroom, or other display decoration or material at the expense of the dealer.
  5. Coerce or attempt to coerce an automobile or truck retailer into not carrying dual lines or into maintaining separate facilities as long as the retailer’s facilities otherwise satisfy the reasonable requirements of the manufacturer, wholesaler, or distributor.
  6. Require a retailer to either establish or maintain exclusive facilities, personnel, or display space or to abandon an existing franchise relationship with another manufacturer in order to continue, renew, reinstate, or enter a franchise agreement or to participate in any program discount, credit, rebate, or sales incentive. This subsection does not apply to a program that is in effect with more than one dealer in this state on April 20, 2011, or to a renewal or modification of the program.
  7. Unreasonably prevent or refuse to approve the relocation of a dealership to another site within the dealer’s relevant market area. The dealer shall provide the manufacturer or distributor with notice of the proposed address and a reasonable site plan of the proposed location. The manufacturer or distributor shall approve or deny the request in writing within sixty days after receipt of the request, and failure to deny the request within sixty days is deemed approval.
  8. Require the retailer to unreasonably remodel, renovate, or recondition the retailer’s facilities, change the location of the facilities, or make unreasonable alterations to the dealership premises.
  9. Discriminate in the prices charged for automobiles or trucks of like grade and quality sold by automobile or truck manufacturers to similarly situated automobile or truck retailers. This prohibition does not prevent the use of differentials that solely make due allowance for differences in the cost of manufacture, sale, or delivery or for differing methods or quantities in which the automobiles or trucks are sold or delivered by the manufacturer, wholesaler, or distributor.
  10. Refuse or fail to offer any incentive program, bonus payment, holdback margin, or any other mechanism that effectively lowers the net cost of a vehicle to any franchised dealer in this state if the incentive, bonus, or holdback is available or made to one or more same line-make dealers in this state.
  11. Attempt or threaten to terminate, cancel, or fail to renew, or substantially change the competitive circumstances of the dealership contracts for any reason other than the failure of the automobile or truck retailer to comply with the terms of the contract between the parties, if the attempt or threat is based on the results of a circumstance beyond the retailer’s control, including a natural disaster in the dealership market area or a labor dispute.
  12. Require a dealer in this state to enter any agreement to assent to a release, assignment, novation, waiver, or estoppel in which a dealer relinquishes any rights under this state’s law, or which would relieve any person from liability imposed by this state’s law unless done in connection with a settlement agreement to resolve a matter between a manufacturer and the dealer. The settlement agreement must be entered voluntarily for separate and valuable consideration, and the renewal, reinstatement, or continuation of a franchise agreement alone does not constitute separate and valuable consideration.
  13. Require any dealer in this state to enter any agreement with the manufacturer or any other party which requires the law of another jurisdiction to apply to any dispute between the dealer and manufacturer, requires that the dealer bring an action against the manufacturer in a venue outside of this state, in any way purports to waive any dealer’s right to have all of this state’s statutory and common law apply, shortens or otherwise modifies or eliminates any dealer’s right to resolve any dispute with a manufacturer in a state or federal court in this state, or requires the dealer to agree to arbitration or waive its rights to bring a cause of action against the manufacturer, unless done in connection with a settlement agreement to resolve a matter or pending dispute between a manufacturer and the dealer. This settlement agreement must be entered voluntarily for separate and valuable consideration and renewal, reinstatement, or continuation of a franchise agreement alone is not separate and valuable consideration.

Source:

S.L. 2005, ch. 439, § 4; 2011, ch. 372, § 2.

Effective Date.

The 2011 amendment of this section by section 2 of chapter 372, S.L. 2011 became effective April 20, 2011, pursuant to an emergency clause in section 5 of chapter 372, S.L. 2011.

Note.

Section 4 of chapter 372, S.L. 2011 provides: “ APPLICATION. This Act applies to all dealership agreements in effect on the effective date of this Act (April 20, 2011) which do not have an expiration date and which are continuing contracts and all other contracts entered, amended, or renewed on or after the effective date of this Act (April 20, 2011). A contract in effect on the effective date of this Act (April 20, 2011), which by its terms will terminate on a date after that date and which is not renewed, is governed by the law as it existed before the effective date of this Act (April 20, 2011).”

Notes to Decisions

Executory Contract.

In Fifth Amendment takings action by car dealers whose franchise agreements were rejected when automobile manufacturer went into bankruptcy, court entered findings in favor of United States because car dealers failed to establish government coerced manufacturer into filing for bankruptcy under government’s negotiated bankruptcy terms or into rejecting any franchise agreements. Because evidence established that manufacturer would have faced immediate liquidation in Chapter 7 bankruptcy without government assistance, dealers failed to prove franchise agreements would have had value in “but-for world” without government assistance. Thus, dealers failed to prove property was “taken” from them. Colonial Chevrolet Co. v. United States, 145 Fed. Cl. 243, 2019 U.S. Claims LEXIS 1311 (Fed. Cl. Oct. 2, 2019), aff'd, 841 Fed. Appx. 205, 2020 U.S. App. LEXIS 40691 (Fed. Cir. 2020).

51-07-02.4. Warranty and incentive claims.

  1. A manufacturer may not conduct a warranty or incentive audit or seek a chargeback on a warranty or incentive payment more than one year after the date of that warranty or incentive payment.
  2. A manufacturer may not charge back a dealer for an incentive or warranty payment unless the manufacturer can satisfy its burden of proof that the dealer’s claim was false, fraudulent, or the dealer did not substantially comply with the reasonable written procedures of the manufacturer.
  3. The audit and chargeback provisions of this section apply to all other incentive and reimbursement programs that are subject to audit by the manufacturer. This section does not apply to fraudulent claims.

Source:

S.L. 2011, ch. 372, § 3.

Effective Date.

This section became effective April 20, 2011, pursuant to an emergency clause in section 5 of chapter 372, S.L. 2011.

Note.

Section 4 of chapter 372, S.L. 2011 provides: “ APPLICATION. This Act applies to all dealership agreements in effect on the effective date of this Act (April 20, 2011) which do not have an expiration date and which are continuing contracts and all other contracts entered, amended, or renewed on or after the effective date of this Act (April 20, 2011). A contract in effect on the effective date of this Act (April 20, 2011), which by its terms will terminate on a date after that date and which is not renewed, is governed by the law as it existed before the effective date of this Act (April 20, 2011).”

51-07-03. Failure to pay sum specified on cancellation of contract — Liability.

If a manufacturer, wholesaler, or distributor of merchandise and tools covered under section 51-07-01, upon cancellation of a contract by either a retailer or a manufacturer, wholesaler, or distributor, fails or refuses to make payment to the retailer as is required by section 51-07-01, or refuses to supply covered merchandise or tools to any retailer of the merchandise, who may have a retail sales contract dated after July 31, 2003, or a contract with no expiration date or a continuing contract in force or effect on August 1, 2003, with the manufacturer, wholesaler, or distributor, the manufacturer, wholesaler, or distributor is liable in a civil action to be brought by the retailer for the amounts provided under subsection 1 of section 51-07-01. The obligations of any wholesaler, manufacturer, or distributor apply to any successor in interest or assignee of that wholesaler, manufacturer, or distributor. A successor in interest includes any purchaser of assets or stock, any surviving corporation or limited liability company resulting from a merger or liquidation, any receiver, or any trustee of the original wholesaler, manufacturer, or distributor.

Source:

S.L. 1937, ch. 125, § 3; R.C. 1943, § 51-0703; S.L. 1961, ch. 309, § 3; 1963, ch. 329, § 3; 1987, ch. 589, § 3; 1993, ch. 54, § 106; 2001, ch. 441, § 4; 2003, ch. 435, § 3.

51-07-04. Selling goods bearing counterfeit trademark — Penalty.

Every person who, with intent to represent such goods as the genuine goods of another, sells or keeps for sale any goods upon which any counterfeit trademark has been affixed, knowing the same to be counterfeited, is guilty of a class A misdemeanor. The word “goods” as used in this section includes every kind of goods, wares, merchandise, compound, or preparation, which may be kept or offered for sale lawfully.

Source:

Pen. C. 1877, §§ 413, 416; R.C. 1895, §§ 7259, 7262; R.C. 1899, §§ 7259, 7262; R.C. 1905, §§ 8999, 9002; C.L. 1913, §§ 9714, 9717; R.C. 1943, §§ 51-0704, 51-0705; S.L. 1975, ch. 106, § 548.

Note.

The provisions of former section 51-07-05 have been combined with this section.

Cross-References.

Regulation of seed sales agreements, see chapter 4-25.

51-07-04.1. Defacing, destroying, or altering serial numbers on farm machinery — Penalty.

It is unlawful for any person to willfully:

    1. Deface, destroy, alter, or remove the serial number on any tractor, combine, cornpicker, or any other heavy farm machinery that carries a factory serial number; or
    2. Place or stamp other than the original serial number upon any tractor, combine, cornpicker, or any other heavy farm machinery that carries a factory serial number; and
  1. Sell or offer for sale any such heavy farm machinery bearing an altered or defaced serial number other than the original.

Any person who violates this section is guilty of a class C felony.

Source:

S.L. 1951, ch. 119, §§ 1, 2; R.C. 1943, 1957 Supp., § 51-07041; S.L. 1975, ch. 106, § 549.

51-07-05. Goods defined. [Repealed]

Repealed by omission from this code.

Note.

The provisions of this section have been combined with section 51-07-04.

51-07-06. Money warranted genuine on exchange of money. [Repealed]

Repealed by omission from this code.

51-07-07. Reasonable time to discover defects in engine or machinery — Rescinding contract — When contract void. [Repealed]

Repealed by S.L. 2001, ch. 447, § 7.

51-07-08. Manufacturers of tractors, engines, farm machinery, and automobiles, firefighting equipment and fire extinguishers, to maintain supply depot in state — Penalty. [Repealed]

Repealed by S.L. 1975, ch. 106, § 673.

51-07-09. Waiving, releasing, or barring of claim for relief before it actually has accrued prohibited.

A claim for relief arising out of the sale of personal property cannot be waived, released, or barred before the claim for relief actually has accrued, notwithstanding any terms or provisions of any contract or other written instrument to the contrary.

Source:

S.L. 1913, ch. 219, § 1; C.L. 1913, § 6002; R.C. 1943, § 51-0709; S.L. 1985, ch. 82, § 121.

Cross-References.

Agreement not to assert defenses against assignee, see § 41-09-65.

Notes to Decisions

Clause Barring Action Against Assignee.

Where a conditional sales contract contains a provision that if the seller should assign the contract, the buyer will settle any claims, defenses, setoffs, and counter-claims arising under the contract directly with the seller and will not set up any of these against the assignee, such a provision is contrary to this section and will not bar a buyer from establishing failure of consideration from the seller as a defense to an action by seller’s assignee. C. I. T. Corp. v. Hetland, 143 N.W.2d 94, 1966 N.D. LEXIS 177 (N.D. 1966).

51-07-10. Conditional sales must be in writing and filed. [Repealed]

Repealed by S.L. 1965, ch. 296, § 32.

51-07-11. Property sold under conditional sale contract not attached, repossessed, or acquired until taxes paid.

When personal property has been sold under a conditional sale contract and such contract has been canceled or foreclosed, the owner, holder, or assignee of such contract may not attach, repossess, or acquire by bill of sale the property sold under the contract until the taxes levied upon such property have been paid as follows:

  1. For property other than mobile homes subject to tax under chapter 57-55, all taxes levied upon the property must be paid in full.
  2. For mobile homes subject to tax under chapter 57-55, the tax levied upon the property for the current year and the most recent preceding year must be paid in full.

Source:

S.L. 1931, ch. 279, § 7; R.C. 1943, § 51-0711; S.L. 1985, ch. 653, § 1.

Cross-References.

Attachment or repossession prohibited until taxes paid, see § 57-22-18.

51-07-12. Automobile sales finance contracts — Information of insurance protection to be given — Warning required — Penalty.

  1. Purchasers of automobiles under sales finance contracts, when required by a dealer, bank, or other finance agency or company, to furnish insurance on any motor vehicle, in connection with the financing of such motor vehicle, must be furnished by the seller evidence of the insurance protection. Such insurance evidence must be in the form of a regular insurance binder or policy or certificate of insurance. The original policy or certificate of insurance clearly stating the coverage afforded by the policy must be delivered to the purchaser within a reasonable time after execution of the insurance order. The certificate must display the premium charged for each coverage afforded.
  2. If the insurance required by any dealer, bank, or other finance agency or company does not provide insurance for bodily injury liability or property damage liability, then the insurance policy or the certificate of insurance, if the policy is filed with the payee, must have imprinted or stamped on the policy or certificate a notice that the policy does not include bodily injury liability or property damage liability insurance. The imprinting or stamping of such notice must be in the manner or form as may be approved by the insurance commissioner.
  3. Any person failing to comply with the provisions of this chapter is guilty of a class B misdemeanor.

Source:

S.L. 1953, ch. 291, §§ 1 to 3; R.C. 1943, 1957 Supp., § 51-0712; S.L. 1975, ch. 106, § 550; 1985, ch. 317, § 78.

Collateral References.

Who is “employed or engaged in automobile business” within the exclusionary clause of liability policy, 55 A.L.R.4th 261.

51-07-13. Labeling imported meats sold — Penalty.

  1. No person may knowingly sell or offer for sale in the state of North Dakota any meat, whether fresh, frozen, cured, or processed, which is imported from outside the boundaries of the United States or any meat product containing in whole or in part such imported meat, if this fact is not shown by labels or printing on each quarter, half, or whole carcass of such meat, or on each case, package, can, tray, or display containing such imported meat.
  2. Any person who violates any of the provisions of this section is guilty of a class B misdemeanor.

Source:

S.L. 1965, ch. 329, §§ 1, 2; 1975, ch. 106, § 551.

51-07-14. Maximum amount of service charge which wholesalers and manufacturers may charge on overdue accounts.

Wholesalers and manufacturers, when selling to retailers or other persons, may charge a service charge of up to one and one-half percent per month on the remaining balance of all overdue accounts, provided the parties have entered into a written agreement prior to the transaction setting forth the amount of service charge, computed on the basis of simple interest per annum. The wholesaler or manufacturer shall inform the purchaser in writing at the time of the purchase of the service charge which will be charged if the account becomes overdue. The service charge allowed in this section is allowed on any such purchase on or after July 1, 1971.

Source:

S.L. 1971, ch. 473, § 1.

Notes to Decisions

Interest on Interest.

Where there was no evidence in the record to show that the plaintiff was a manufacturer or wholesaler entitled to the service charge authorized by this section, the plaintiff had not shown that it was entitled to charge interest on interest. Northwestern Equip. v. Badinger, 403 N.W.2d 8, 1987 N.D. LEXIS 273 (N.D. 1987).

51-07-15. Use of electronic or magnetic scanners in retail foodstores — Item pricing required — Exceptions — Penalty.

Except as otherwise provided in this section, every retail foodstore which uses electronic or magnetic scanners to read prices shall clearly post the selling price of each item in Arabic numerals, by stamp, tag, label, or other conspicuous marking device. If a product is packaged for sale in quantities of more than one, the total price must be posted. The posting must be by a label securely affixed on each item or by a label posted on the shelf edge immediately below or above the item. Compliance with this section is not required for items not marked in accordance with a uniform products code or any similar marking system designed to be scanned by electronic or magnetic checkout equipment. Any person who violates this section is guilty of an infraction.

Source:

S.L. 1983, ch. 531, §§ 1, 2; 1985, ch. 542, § 1.

51-07-16. Definitions.

As used in sections 51-07-16 through 51-07-22, and unless the context otherwise requires:

  1. “Consumer” means the purchaser or lessee, other than for purposes of resale or lease, of a passenger motor vehicle normally used for personal, family, or household purposes. The term includes any person to whom the passenger motor vehicle is transferred for the same purposes during the duration of an express warranty applicable to that passenger motor vehicle, and any other person entitled by the terms of the warranty to enforce the obligations of the warranty.
  2. “Passenger motor vehicle” means a passenger motor vehicle as defined in section 39-01-01 or a truck with registered gross weight of ten thousand pounds [4536 kilograms] or less which is sold or leased in this state. The term does not include a house car, as defined in section 39-01-01.

Source:

S.L. 1985, ch. 424, § 2; 1995, ch. 473, § 1.

Collateral References.

Validity, construction and effect of state motor vehicle warranty legislation, 88 A.L.R.5th 301.

51-07-17. Duty of manufacturer to repair defective passenger motor vehicles.

If a new passenger motor vehicle does not conform to all applicable express warranties, and the consumer reports the nonconformity to the manufacturer, its agent, or its authorized dealer during the term of the express warranties or during the period of one year following the date of original delivery of the passenger motor vehicle to a consumer, whichever is the earlier date, the manufacturer, its agent, or its authorized dealer shall make the repairs necessary to conform the passenger motor vehicle to the express warranties, notwithstanding the fact that the repairs might be made after the expiration of the warranty or one-year period.

Source:

S.L. 1985, ch. 424, § 3.

Collateral References.

Liability for delay in making repair of motor vehicle, 44 A.L.R.4th 1174.

Award of attorney’s fees under state motor vehicle warranty legislation (lemon laws), 82 A.L.R.5th 501.

51-07-18. Duty to replace defective passenger motor vehicle or refund price — Prerequisite of using available informal dispute settlement process.

  1. If the manufacturer, its agent, or its authorized dealer is unable to make the passenger motor vehicle conform to any applicable express warranty by repairing or correcting any defect or condition that substantially impairs the use and market value of the passenger motor vehicle, after a reasonable number of attempts, the manufacturer shall replace that passenger motor vehicle with a comparable passenger motor vehicle or accept return of the passenger motor vehicle from the consumer, and refund to the consumer the full purchase price, including all collateral charges, less a reasonable allowance for the consumer’s use of the vehicle not exceeding ten cents per mile [1.61 kilometers] driven or ten percent of the purchase price, whichever is less. Refunds must be made to the consumer, the lessor, and the lienholder, if any, as their interests may appear. A reasonable allowance for use is the amount directly attributable to use by the consumer before the consumer’s first report of the nonconformity to the manufacturer, agent, or dealer, and during any subsequent period when the vehicle is not out of service for repair.
  2. It is an affirmative defense to any claim under sections 51-07-16 through 51-07-22:
    1. That an alleged nonconformity does not substantially impair the use and market value of the passenger motor vehicle; or
    2. That a nonconformity is the result of abuse, neglect, or unauthorized modifications or alterations of the passenger motor vehicle by a consumer.
  3. If a manufacturer has established or participates in an informal dispute settlement procedure that substantially complies with the substantive rules of the federal trade commission, 16 CFR 703, or if the manufacturer participates in a consumer and industry appeals, arbitration, or mediation appeals board whose decisions are binding on the manufacturer, the remedy under subsection 1 is not available to a consumer who has not first resorted to that procedure. If the consumer requests an oral presentation before the board or dispute settlement mechanism, the hearing must take place in the state in which the consumer resides. The attorney general shall, on application, issue a determination of whether an informal dispute resolution mechanism qualifies under this subsection.

Source:

S.L. 1985, ch. 424, § 4; 1989, ch. 591, § 1; 1995, ch. 473, § 2; 1995, ch. 474, § 1.

51-07-18.1. Refunds for leased passenger motor vehicles.

In any case in which a refund is tendered by a manufacturer for a leased motor vehicle under section 51-07-18, the refund and rights of the motor vehicle lessor, lessee, and manufacturer are as follows:

  1. The manufacturer shall provide to the lessee the sum of all payments previously paid to the motor vehicle lessor by the lessee less a reasonable allowance for the consumer’s use of the vehicle. Payments include all cash payments, security deposits, and trade-in allowance, if any, tendered by the lessee to the motor vehicle lessor under the lease agreement.
  2. The manufacturer shall provide to the motor vehicle lessor the sum of the following:
    1. The lessor’s actual purchase cost, less payments made by the lessee;
    2. The freight cost, if applicable;
    3. The cost for dealer or manufacturer installed accessories, if applicable; and
    4. An amount equal to five percent of the lessor’s actual purchase cost as provided in subdivision a. The amount in this subdivision is in lieu of any early termination costs or penalties described in the lease agreement.
  3. Upon return of the passenger motor vehicle, the consumer’s lease agreement with the lessor is terminated and no penalty for early termination may be assessed.
  4. Any refund to be paid to the motor vehicle lessor must be made to the lessor and lienholder, if any, as their interests may appear.

Source:

S.L. 1995, ch. 473, § 3.

51-07-19. Presumptions.

  1. It is presumed that a reasonable number of attempts have been undertaken to make a passenger motor vehicle conform to the applicable express warranties, if:
    1. The same nonconformity has continued to exist, despite having been subject to repair more than three times by the manufacturer, its agent, or its authorized dealer, within the express warranty term or within one year of the date of original delivery of the passenger motor vehicle to a consumer, whichever is the earlier date.
    2. The passenger motor vehicle is out of service for repair for a cumulative total of at least thirty business days during the warranty term or in a year, whichever is less.
  2. The term of an express warranty, the one-year period and the thirty-day period, are extended by any period during which repair services are not available to the consumer because of war, invasion, strike, fire, flood, or other natural disaster.
  3. The presumption does not apply against a manufacturer unless the manufacturer has received prior direct notification from or on behalf of the consumer and an opportunity to cure the alleged defect.

Source:

S.L. 1985, ch. 424, § 5; 1995, ch. 473, § 4.

51-07-20. Exclusive remedy.

A consumer who elects to proceed under sections 51-07-16 through 51-07-22 is foreclosed from pursuing any other remedy arising out of the facts and circumstances which gave rise to the claim under sections 51-07-16 through 51-07-22.

Source:

S.L. 1985, ch. 424, § 6.

51-07-21. Limitation of actions.

An action brought under sections 51-07-16 through 51-07-22 must be commenced within six months after the earlier of:

  1. Expiration of the express warranty term; or
  2. Eighteen months after the date of original delivery of the passenger motor vehicle to a consumer.

Source:

S.L. 1985, ch. 424, § 7.

51-07-22. Resale of returned passenger motor vehicles — Penalty.

  1. A person may not sell or lease in this state a passenger motor vehicle that was returned to the manufacturer in accordance with sections 51-07-16 through 51-07-22, unless the manufacturer provides:
    1. The same express warranty it provided to the original purchaser, except the term of the warranty must be for at least twelve thousand miles or twelve months after the date of resale, whichever is earlier; and
    2. The purchaser a statement on a separate document that must be signed by the manufacturer and the purchaser and must be in ten-point, capitalized type, in substantially the following form: “IMPORTANT: THIS VEHICLE WAS RETURNED TO THE MANUFACTURER BECAUSE DEFECTS COVERED BY THE MANUFACTURER’S EXPRESSED WARRANTY WERE NOT REPAIRED WITHIN A REASONABLE TIME AS PROVIDED BY NORTH DAKOTA LAW”.
  2. A person may not ship or deliver for resale or lease in another state a passenger motor vehicle returned to the manufacturer in accordance with sections 51-07-16 through 51-07-22 unless full disclosure of the reasons for return is made to any prospective buyer.
  3. Violation of this section is a class B misdemeanor.

Source:

S.L. 1985, ch. 424, § 8; 1989, ch. 591, § 2; 1991, ch. 522, § 1; 1995, ch. 473, § 5.

51-07-23. Unsolicited telefacsimile advertising.

It is unlawful for any person to initiate the unsolicited transmission of a telefacsimile message promoting a good or service for purchase by the recipient of the message. The term “telefacsimile” as used in this section means any process in which an electronic signal is transmitted by telephone line for conversion into written text. This section does not apply to a telefacsimile message sent to a recipient with whom the initiator has had a prior contractual or business relationship, nor does it apply to transmissions not exceeding two pages which are transmitted between the hours of nine p.m. and six a.m. Notwithstanding the above, it is unlawful to initiate a telefacsimile message to a recipient who has previously sent a written or telefacsimile message to the initiator clearly indicating that the recipient does not want to receive any telefacsimile from the initiator. A person who transmits an unsolicited telefacsimile message in violation of this section is liable to the recipient of that message for fifty dollars per month for each month in which the recipient receives the unsolicited message.

Source:

S.L. 1991, ch. 523, § 1.

51-07-24. Insurance claims for excessive charges — Penalty.

  1. A person who sells goods or services paid for by the consumer from proceeds of an insurance policy that provides coverage for physical damage to automobiles may not:
    1. Advertise or promise to provide a good or service as an incentive, pay or waive all or part of any applicable insurance deductible, or pay a rebate in an amount equal to all or part of any applicable insurance deductible; or
    2. Knowingly charge an amount for the good or service that exceeds the usual and customary charge by that person for the good or service by an amount equal to or greater than all or part of the applicable insurance deductible paid by that person on behalf of an insured or remitted to an insured by that person as a rebate.
  2. A person who is insured under an insurance policy that provides coverage for physical damage to automobiles may not knowingly submit a claim under the policy based on charges that are in violation of subsection 1 or may not knowingly allow a claim in violation of subsection 1 to be submitted, unless the person promptly notifies the insurer of the excessive charges.
  3. A violation of this section is a class B misdemeanor.

Source:

S.L. 1997, ch. 416, § 1; 2001, ch. 442, § 1.

51-07-25. Motor vehicle fuel franchise agreements.

A motor vehicle fuel franchise agreement may not require a security deposit except for the purpose of securing against loss of or damage to property. The dealer may satisfy any security deposit required by depositing cash or pledging a savings account or its equivalent in a financial institution in this state. Earnings accruing on a savings account or its equivalent are the property of the dealer and the dealer may withdraw the earnings annually from the account.

Source:

S.L. 1997, ch. 417, § 1.

51-07-26. Succession to ownership of an automobile, truck, or farm equipment dealership.

  1. The owner of an automobile, truck, or farm equipment dealership may appoint by trust, will, or any other valid written instrument a successor to the owner’s dealership interest upon the owner’s death or incapacity.
  2. Unless the manufacturer, wholesaler, or distributor has good cause to refuse to honor the succession, the successor may succeed to the ownership of the dealership under the existing franchise if:
    1. Within ninety days of the owner’s death or incapacity, the successor gives written notice of the successor’s intent to succeed to ownership of the dealership; and
    2. The successor agrees to be bound by all the terms and conditions of the franchise agreement with the prior owner.
  3. Upon request, the successor shall promptly provide the manufacturer, wholesaler, or distributor evidence of the successorship appointment, as well as personal and financial information reasonably necessary to determine whether the succession should be honored by the manufacturer, wholesaler, or distributor.

Source:

S.L. 1997, ch. 418, § 1.

51-07-26.1. Refusal to honor succession.

  1. If a manufacturer, wholesaler, or distributor believes that good cause exists to refuse to honor the intended succession under section 51-07-26, then the manufacturer, wholesaler, or distributor shall serve the named successor written notice of refusal to honor the intended succession within sixty days of its receipt of the notice of the intended succession. The notice must contain specific grounds for the refusal to honor the succession.
  2. If notice of refusal to honor the intended succession is not timely served upon the intended successor, the successor may continue the franchise subject only to termination as permitted otherwise in this chapter.
  3. In determining whether good cause exists for the refusal to honor the intended succession, the manufacturer, wholesaler, or distributor has the burden of proving that the intended successor is not a person of good moral character or does not meet the franchisor’s existing and reasonable standards. Good cause for refusal to honor succession does not include the owner’s dealership being dualed with another manufacturer’s line.

Source:

S.L. 1997, ch. 418, § 2.

51-07-27. Restrictions on electronically printed credit card receipts — Penalty.

Except as otherwise provided under this section, a person that accepts credit cards for the transaction of business and also electronically prints receipts for these credit card transactions may not print on the receipt provided to the customer more than the last five digits of the credit card account number nor print on the receipt provided to the customer the expiration date of the credit card. This section does not apply to a credit card transaction in which the sole means of recording the customer’s credit card number is by handwriting or by an imprint or copy of the credit card. This section becomes operative on January 1, 2004, with respect to any cash register or other machine or device that electronically prints receipts for credit card transactions which is first put into use after December 31, 2003. This section becomes operative on January 1, 2007, with respect to any cash register or other machine or device that electronically prints receipts for credit card transactions which is first put into use before January 1, 2004. A person who violates this section is guilty of a class B misdemeanor.

Source:

S.L. 2003, ch. 436, § 1; 2005, ch. 443, § 1.

51-07-28. Recording devices on motor vehicles — Disclosure — Removal.

  1. A manufacturer of a new motor vehicle sold or leased in this state which is equipped with a recording device commonly referred to as an event data recorder shall disclose by model year 2007 the presence, capacity, and capabilities of the event data recorder in the owner’s manual for the vehicle. A motor vehicle dealer shall include within the purchase contract in a clear and conspicuous manner information on the possibility of a recording device. As used in this section, an event data recorder means a feature that is installed by the manufacturer of the vehicle and does any of the following for the purpose of retrieving data:
    1. Records the speed of the vehicle and the direction the motor vehicle is traveling.
    2. Records vehicle location data.
    3. Records steering performance.
    4. Records brake performance, including whether brakes were applied before an accident.
    5. Records the driver’s safety belt status.
    6. Has the ability to transmit information concerning an accident in which the vehicle has been involved to a central communications system when an accident occurs.
  2. Data recorded on an event data recorder may not be downloaded or otherwise retrieved by a person other than the owner of the motor vehicle at the time the data is recorded, or through consent by the owner’s agent or legal representative, except under any of the following circumstances:
    1. The data is retrieved for the purpose of improving motor vehicle safety, including for medical research of the human body’s reaction to motor vehicle accidents, and the identity of the registered owner or driver is not disclosed in connection with that retrieved data. The disclosure of the vehicle identification number, with the last four digits deleted, for the purpose of improving vehicle safety, including for medical research of the human body’s reaction to motor vehicle accidents, does not constitute the disclosure of the identity of the registered owner or driver. A person authorized to download or otherwise retrieve data from a recording device under this subdivision may not release that data, except to share the data among the motor vehicle safety and medical research communities to advance motor vehicle safety, and only if the identity of the registered owner or driver is not disclosed.
    2. The data is retrieved by a licensed motor vehicle dealer or by an automotive technician for the purpose of diagnosing, servicing, or repairing the motor vehicle.
    3. By stipulation of the parties to the proceeding or by order of the court.
  3. “Owner” means a person having all the incidents of ownership, including the legal title of a vehicle regardless of whether the person lends, rents, or creates a security interest in the vehicle; a person entitled to the possession of a vehicle as the purchaser under a security agreement; or the person entitled to possession of the vehicle as lessee pursuant to a written lease agreement, if the agreement at inception is for a period in excess of three months.
  4. A person, including a service or data processor operating on behalf of the person, authorized to download or otherwise retrieve data from an event data recorder pursuant to subdivision a of subsection 2 may not release that data except for the purposes of motor vehicle safety and medical communities to advance motor vehicle safety, security, or traffic management; or to a data processor solely for the purposes permitted by this subsection and only if the identity of the owner or driver of the vehicle is not disclosed.
  5. If a motor vehicle is equipped with a recording device that is capable of recording or transmitting information relating to vehicle location data or concerning an accident to a central communications system and that capability is part of a subscription service, the fact that the information may be recorded or transmitted must be disclosed in the terms and conditions of the subscription service. Subsection 2 does not apply to a subscription service that meets the requirements of this subsection.
  6. An insurer may not require as a condition of insurability consent of the owner for access to data that may be stored within an event data recorder and may not use data retrieved with the owner’s consent before or after an accident for the purpose of rate assessment.

Source:

S.L. 2005, ch. 440, § 1.

51-07-28.1. Tracking devices on motor vehicles — Disclosure — Removal — Penalty.

  1. A lender may not require a person to install or maintain a global tracking or positioning system or device on a motor vehicle for the purpose of locating or tracking the vehicle to repossess the vehicle in case of loan default, unless:
    1. The lender includes within the financing contract, in a clear and conspicuous manner, information on the installation or placement of the system or device;
    2. The system or device is installed at no cost to the buyer; and
    3. The system or device is removed within sixty days of the loan for the motor vehicle being paid in full at:
      1. The expense of the seller or lender; and
      2. A location agreed upon by the seller or lender and buyer.
  2. A lender that violates this section is subject to a fine of not more than five hundred dollars. In the case of a second or subsequent violation of this section, the lender is subject to a fine of not less than one thousand dollars nor more than two thousand dollars.

Source:

S.L. 2021, ch. 381, § 1, eff August 1, 2021.

51-07-29. Warranty work compensation.

  1. A motor vehicle manufacturer shall include reasonable compensation for diagnostic work, as well as repair service, parts, and labor, in warranty work compensation. In addition, a motor vehicle manufacturer shall provide adequate time allowances for diagnosis and performance of warranty work and service for the work performed. The hourly labor rate paid by a motor vehicle manufacturer to the dealer for warranty services may not be less than the average rate charged by the dealer for like service to nonwarranty customers for nonwarranty service as provided under subsection 5. A motor vehicle manufacturer may not reimburse a dealer for parts used in the performance of warranty repair at a lower rate than the average retail rate customarily charged by the dealer for these parts as provided under subsection 4.
  2. A motor vehicle manufacturer shall pay a dealer on a claim made by a dealer under this section within thirty days of the approval of the claim. The manufacturer shall either approve or disapprove a claim within thirty days after the claim is submitted to the manufacturer. The manufacturer may prescribe the manner in which and the forms on which the dealer must present the claim. A claim not specifically disapproved in writing within thirty days after the manufacturer receives the claim must be construed to be approved and the manufacturer shall pay the claim within thirty days.
  3. A motor vehicle manufacturer, factory branch, distributor, or distributor branch shall fully compensate its motor vehicle dealers licensed in this state for warranty parts, work, and service specified in this section. Failure to fully compensate includes a reduction in the amount due to the dealer or imposing a separate charge, surcharge, or other imposition by which the motor vehicle manufacturer, factory branch, distributor, or distributor branch seeks to recover the costs of complying with this section from the dealer.
  4. The retail rate customarily charged by the dealer for parts is established by the dealer submitting to the manufacturer or distributor one hundred sequential nonwarranty customer-paid service repair orders that contain warranty-like parts or ninety consecutive days of nonwarranty customer-paid service repair orders that contain warranty-like parts, whichever is less, covering repairs made no more than one hundred eighty days before the submission and declaring the average percentage markup.
  5. The retail rate customarily charged by the dealer for labor must be established using the same process as provided under subsection 4 and declaring the average labor rate. The average labor rate must be determined by dividing the amount of the dealer’s total labor sales by the number of total hours that generated those sales. If a labor rate and parts markup rate are simultaneously declared by the dealer, the dealer may use the same repair orders to complete each calculation as provided under subsection 4.
  6. In calculating the retail rate customarily charged by the dealer for parts and labor, the following work may not be included in the calculation:
    1. Repairs for manufacturer or distributor special events, specials, or promotional discounts for retail customer repairs;
    2. Parts sold at wholesale;
    3. Routine maintenance not covered under any retail customer warranty, including fluids, filters, and belts not provided in the course of repairs;
    4. Nuts, bolts, fasteners, and similar items that do not have an individual part number;
    5. Tires; and
    6. Vehicle reconditioning.
  7. The average of the parts markup rates and labor rate is presumed to be fair and reasonable and must go into effect thirty days following the manufacturer’s approval. A manufacturer or distributor may rebut the presumption by reasonably substantiating that a rate is unreasonable in light of the practices of all other franchised motor vehicle dealers in an economically similar area of the state offering the dealer’s declaration of the same line-make vehicles, not later than thirty days after submission. If the average parts markup rate or average labor rate is rebutted, or both, the manufacturer or distributor shall propose an adjustment of the average percentage markup based on that rebuttal not later than thirty days after submission.
  8. Each manufacturer, in establishing a schedule of compensation for warranty work, shall rely on the vehicle dealer’s written schedule of hourly labor rates and parts and may not obligate any vehicle dealer to engage in unduly burdensome or time-consuming documentation of rates or parts, including obligating vehicle dealers to engage in transaction-by-transaction or part-by-part calculations.
  9. A dealer or manufacturer may demand that the average parts markup or average labor rate be calculated using the process provided under subsections 4 and 5; however, the demand for the average parts markup may not be made within twelve months of the last parts markup declaration and the demand for the average labor rate may not be made within twelve months of the last labor rate declaration. If a parts markup or labor rate is demanded by the dealer or manufacturer, the dealer shall determine the repair orders to be included in the calculation under subsections 4 and 5.

Source:

S.L. 2013, ch. 388, § 1.

Effective Date.

This section became effective April 16, 2013, pursuant to an emergency clause in section 2 of chapter 388, S.L. 2013.

51-07-30. Customer contract clauses — Billing examples — Enforcement — Penalty.

  1. As used in this section:
    1. “Customer” means a person that borrows, buys, leases, or obtains services or property under a service contract. The term does not include a government entity.
    2. “Service contract” means a written agreement between a customer and a party acting in the usual course of business in which a customer borrows, buys, leases, or obtains personal property, real property, or services for valuable consideration.
    3. “Terms and conditions” means general and special arrangements, provisions, requirements, rules, specifications, and standards that form an integral part of an agreement or contract.
  2. If a service contract contains terms and conditions clauses, the service contract must be accepted by the customer for the service contract to be enforceable.
  3. If a service contract contains a liquidated damages clause, the clause must provide specific examples of how any fees or charges will be calculated.
  4. The attorney general may enforce this section. The attorney general, in enforcing this section, has the powers provided in chapter 51-15 and may seek the remedies in chapter 51-15. Each act in violation of this section constitutes a separate violation of chapter 51-15. The remedies, duties, prohibitions, and penalties of this section are not exclusive and are in addition to all other causes of action, remedies, and penalties in chapter 51-15, or otherwise provided by law.

Source:

S.L. 2019, ch. 424, § 1, eff August 1, 2019.

Note.

Section 51-07-30 was enacted 2 times by the 2019 Legislative Assembly. Pursuant to Section 1-02-09.1, the section is printed above to harmonize and give effect to the enactment made in Section 1 of Chapter 424, Session Laws 2019, House Bill 1195 over Section 1 of Chapter 422, Session Laws 2019, House Bill 1339.

Section 3 of chapter 424, S.L. 2019 provides, “ APPLICATION. This Act applies to contracts entered after July 31, 2019.”

51-07-31 Parts, equipment, and accessory dealers reimbursed for warranty repair.

  1. As used in this section:
    1. “Commercial distributor” means any person that offers for sale, sells, or distributes to a dealer parts for any new commercial motor vehicle, truck, or semitrailer, or vehicular implements, commercial equipment, or accessories, or attachment units, designed and used primarily for transporting commodities, merchandise, or commercial cargo.
    2. “Commercial equipment dealer” means a person that engages in the business of:
      1. Selling, at retail, parts for any new or used commercial motor vehicle, truck, or semitrailer, or vehicular implements, commercial equipment, or accessories, or attachment units, designed and used primarily for transporting commodities, merchandise, or commercial cargo; or
      2. Repairing new or used commercial motor vehicle, truck, or semitrailer parts, or vehicular implements, commercial equipment or, accessories, or attachment units, designed and used primarily for transporting commodities, merchandise, or commercial cargo.
    3. “Commercial manufacturer” means any person engaged in the business of manufacturing or assembling parts for any new commercial motor vehicle, truck, or semitrailer, or vehicular implements, commercial equipment, or accessories, or attachment units, designed and used primarily for transporting commodities, merchandise, or commercial cargo.
    4. “Parts” includes essential and nonessential commercial motor vehicle, truck, or semitrailer components.
  2. A commercial manufacturer shall include reasonable compensation for diagnostic work, as well as repair service, parts, and labor, in warranty work compensation. In addition, a commercial manufacturer shall provide adequate time allowances for diagnosis and performance of warranty work and service for the work performed. The hourly labor rate paid by a commercial manufacturer to the commercial equipment dealer for warranty services may not be less than the average rate charged by the commercial equipment dealer for like service to nonwarranty customers for nonwarranty service. A commercial manufacturer may not reimburse a commercial equipment dealer for parts used in the performance of warranty repair at a lower rate than the average retail rate customarily charged by the commercial equipment dealer for these parts as provided under subsection 5.
  3. A commercial manufacturer shall pay a commercial equipment dealer on a claim made by a commercial equipment dealer under this section within thirty days of the approval of the claim. The commercial manufacturer either shall approve or disapprove a claim within thirty days after the claim is submitted to the commercial manufacturer. The commercial manufacturer may prescribe the manner in which and the forms on which the commercial equipment dealer must present the claim. A claim not specifically disapproved in writing within thirty days after the commercial manufacturer receives the claim must be construed to be approved and the manufacturer shall pay the claim within thirty days.
  4. A commercial manufacturer, commercial distributor, or commercial distributor branch shall compensate fully its commercial equipment dealers licensed in this state for warranty parts, work, and service specified in this section. Failure to fully compensate includes a reduction in the amount due to the commercial equipment dealer or imposing a separate charge, surcharge, or other imposition by which the commercial manufacturer seeks to recover the costs of complying with this section from the commercial equipment dealer.
  5. The retail rate customarily charged by the commercial equipment dealer for parts is established by the commercial equipment dealer submitting to the commercial manufacturer or commercial distributor one hundred sequential nonwarranty customer-paid service repair orders that contain warranty-like parts or ninety consecutive days of nonwarranty customer-paid service repair orders that contain warranty-like parts, whichever is less, covering repairs made no more than one hundred eighty days before the submission and declaring the average percentage markup.
  6. The retail rate customarily charged by the commercial equipment dealer for labor must be established using the same process as provided under subsection 5 and declaring the average labor rate. The average labor rate must be determined by dividing the amount of the dealer’s total labor sales by the number of total hours that generated those sales. If a labor rate and parts markup rate are simultaneously declared by the commercial equipment dealer, the commercial equipment dealer may use the same repair orders to complete each calculation as provided under subsection 5.
  7. In calculating the retail rate customarily charged by the commercial equipment dealer for parts and labor, the following work may not be included in the calculation:
    1. Repairs for commercial manufacturer or commercial distributor special events, specials, or promotional discounts for retail customer repairs;
    2. Parts sold at wholesale; and
    3. Nuts, bolts, fasteners, and similar items that do not have an individual part number.
  8. The average of the parts markup rates and labor rate is presumed to be fair and reasonable and must become effective thirty days following the commercial manufacturer’s approval. Not later than thirty days after submission, a commercial manufacturer or commercial distributor may rebut the presumption by reasonably substantiating that a rate is unreasonable in light of the practices of all other commercial equipment dealers in an economically similar area of the state offering the commercial equipment dealer’s declaration of the same part, or vehicular implement, equipment, accessory, or attachment unit. If the average parts markup rate or average labor rate, or both are rebutted, the commercial manufacturer or commercial distributor shall propose an adjustment of the average percentage markup based on that rebuttal not later than thirty days after submission.
  9. Each commercial manufacturer, in establishing a schedule of compensation for warranty work, shall rely on the commercial equipment dealer’s written schedule of hourly labor rates and parts and may not obligate any commercial equipment dealer to engage in unduly burdensome or time-consuming documentation of rates or parts, including obligating commercial equipment dealers to engage in transaction-by-transaction or part-by-part calculations.
  10. A commercial dealer or commercial manufacturer may demand the average parts markup or average labor rate be calculated using the process provided under subsections 5 and 6; however, the demand for the average parts markup may not be made within twelve months of the last parts markup declaration and the demand for the average labor rate may not be made within twelve months of the last labor rate declaration. If a parts markup or labor rate is demanded by the commercial equipment dealer or commercial manufacturer, the commercial equipment dealer shall determine the repair orders to be included in the calculation under subsections 5 and 6.

Source:

S.L. 2019, ch. 422, § 1, eff August 1, 2019.

Note.

Section 51-07-30 was enacted 2 times by the 2019 Legislative Assembly. Pursuant to Section 1-02-09.1, the section is printed above to harmonize and give effect to the enactment made in Section 1 of Chapter 424, Session Laws 2019, House Bill 1195 over Section 1 of Chapter 422, Session Laws 2019, House Bill 1339. Section 51-07-30 as added by Section 1 of Chapter 422 is accordingly redesignated to the present location.

CHAPTER 51-08 Pools and Trusts [Repealed]

[Repealed by S.L. 1987, ch. 590, § 13]

CHAPTER 51-08.1 Uniform State Antitrust Act

51-08.1-01. Definitions.

As used in this chapter:

  1. “Person” means an individual, corporation, limited liability company, business trust, partnership, association, or any other legal entity.
  2. “Relevant market” means the geographical area of actual or potential competition in a line of commerce, all or any part of which is within this state.

Source:

S.L. 1987, ch. 590, § 1; 1993, ch. 54, § 106.

Collateral References.

Resale prices of commodities: antitrust laws as violated by agreements for the maintenance of, 19 A.L.R.2d 1139.

Filling stations: restraints of trade or violation of antitrust statute by sale, lease, or rental of handling equipment in conjunction with restrictive agreement or covenant in respect of purchase or handling of petroleum products by operator of filling station, 26 A.L.R.2d 219.

Indemnity: right of corporation to indemnity for civil or criminal liability incurred by employee’s violation of antitrust laws, 37 A.L.R.3d 1355.

Multiple listing agreement: validity, construction and effect of real estate broker’s multiple listing agreement, 45 A.L.R.3d 190.

Reasonableness: enforceability, insofar as restrictions would be reasonable, of contract containing unreasonable restrictions on competition, 61 A.L.R.3d 397.

Area price discrimination, validity and construction of state statutes forbidding area price discrimination, 67 A.L.R.3d 26.

Validity, construction, and application of state statute forbidding unfair trade practice or competition by discriminatory allowance of rebates, commissions, discounts, or the like, 41 A.L.R.4th 675.

Constitutional right to jury trial in cause of action under state unfair or deceptive trade practices law, 54 A.L.R.5th 631.

Law Reviews.

Cooperatives Can Be in Restraint of Trade, 23 Bar Briefs, State Bar Ass’n of N.D. 37 (1947).

Comparative Legislation.

Jurisdictions which have enacted the Uniform State Antitrust Act:

Ariz. Rev. Stat. Ann. §§ 44-1401 to 44-1415.

Del. Code Ann. tit. 6, §§ 2101 to 2114.

Mich. Comp. Laws §§ 445.771 to 445.788.

51-08.1-02. Contract, combination, or conspiracy to restrain or monopolize trade.

A contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in a relevant market is unlawful.

Source:

S.L. 1987, ch. 590, § 2.

Notes to Decisions

Class Action.

In an action brought against corporate defendant for violations of this act, the trial court, in granting class certification, did not err in determining that common questions predominated over individual issues and that management of the class would not be unusually difficult. Howe v. Microsoft Corp., 2003 ND 12, 656 N.W.2d 285, 2003 N.D. LEXIS 13 (N.D. 2003).

Violation Not Shown.

Conclusory assertions of a contract, combination, or conspiracy between a physician’s former employers regarding decisions for medical staffing privileges did not raise a material issue of fact on summary judgment. Schmitt v. MeritCare Health Sys., Dakota Clinic, Ltd., 2013 ND 136, 834 N.W.2d 627, 2013 N.D. LEXIS 139 (N.D. 2013).

Collateral References.

Practices Forbidden by State Deceptive Trade Practice and Consumer Protection Acts — Pyramid or Ponzi or Referral Sales Schemes. 48 A.L.R.6th 511.

51-08.1-03. Establishment, maintenance, or use of monopoly.

The establishment, maintenance, or use of a monopoly, or an attempt to establish a monopoly, of trade or commerce in a relevant market by any person, for the purpose of excluding competition or controlling, fixing, or maintaining prices, is unlawful.

Source:

S.L. 1987, ch. 590, § 3.

Collateral References.

Practices Forbidden by State Deceptive Trade Practice and Consumer Protection Acts — Pyramid or Ponzi or Referral Sales Schemes. 48 A.L.R.6th 511.

51-08.1-04. Exclusions.

  1. Labor of a human being is not a commodity or an article of commerce.
  2. Nothing in this chapter forbids the existence and operation of any labor, agricultural, or horticultural organization instituted for the purpose of mutual help, while lawfully carrying out its legitimate objects.

Source:

S.L. 1987, ch. 590, § 4.

51-08.1-05. Judicial jurisdiction.

An action for violation of this chapter must be brought in district court.

Source:

S.L. 1987, ch. 590, § 5.

51-08.1-06. Official investigation.

  1. If the attorney general has reasonable cause to believe that a person has information or is in possession, custody, or control of any document or other tangible object relevant to an investigation for violation of this chapter, the attorney general may serve upon the person, before bringing any action in the district court, a written demand to appear and be examined under oath, to answer written interrogatories under oath, and to produce the document or object for inspection and copying. The demand must:
    1. Be served upon the person in the manner required for service of process in this state;
    2. Describe the nature of the conduct constituting the violation under investigation;
    3. Describe the document or object with sufficient definiteness to permit it to be fairly identified;
    4. Contain a copy of the written interrogatories;
    5. Prescribe a reasonable time at which the person must appear to testify, within which to answer the written interrogatories, and within which the document or object must be produced, and advise the person that a reasonable opportunity will be afforded for examination and notation of corrections upon any transcript of an oral examination, that a copy of one’s own transcript can be obtained upon payment of reasonable charges, and that objections to or reasons for not complying with the demand may be filed with the attorney general at or before the designated time;
    6. Specify a place for the taking of testimony or for production and designate a person who shall be custodian of the document or object; and
    7. Contain a copy of subsection 2.
  2. If a person objects to or otherwise fails to comply with the written demand served upon that person under subsection 1, the attorney general may file in the district court of the county in which the person resides, or in which the person maintains a principal place of business within this state, a petition for an order to enforce the demand. Notice of hearing the petition and a copy of the petition must be served upon the person, who may appear in opposition to the petition. If the court finds that the demand is proper, there is reasonable cause to believe there has been a violation of this chapter, and the information sought or document or object demanded is relevant to the violation, it shall order the person to comply with the demand, subject to modification the court may prescribe. Upon motion by the person and for good cause shown, the court may make any further order in the proceedings that justice requires to protect the person from unreasonable annoyance, embarrassment, oppression, burden, or expense.
  3. Any procedure, testimony taken, or material produced under this section must be kept confidential by the attorney general before bringing an action against a person under this chapter for the violation under investigation, unless confidentiality is waived by the person being investigated and the person who has testified, answered interrogatories, or produced material, or disclosure is authorized by the court.

Source:

S.L. 1987, ch. 590, § 6; 2001, ch. 443, § 1.

51-08.1-07. Civil penalty and injunctive enforcement by state.

The attorney general, or a state’s attorney with the permission or at the request of the attorney general, may bring an action for appropriate injunctive relief, equitable relief, including disgorgement, and civil penalties in the name of the state for a violation of this chapter. The trier of fact may assess for the benefit of the state a civil penalty of not more than one hundred thousand dollars for each violation of this chapter.

Source:

S.L. 1987, ch. 590, § 7; 2021, ch. 382, § 1, eff April 9, 2021.

51-08.1-08. Damages and injunctive relief.

  1. The state, a political subdivision, or any public agency threatened with injury or injured in its business or property by a violation of this chapter may bring an action for appropriate injunctive or other equitable relief, damages sustained and, as determined by the court, taxable costs and reasonable attorney’s fees.
  2. The attorney general may bring an action as parens patriae on behalf of a person residing in the state to recover damages sustained by the person by reason of any violation of this chapter.
  3. A person threatened with injury or injured in that person’s business or property by a violation of this chapter may bring an action for appropriate injunctive or other equitable relief, damages sustained and, as determined by the court, taxable costs and reasonable attorney’s fees. If the trier of fact finds that the violation is flagrant, it may increase recovery to an amount not in excess of three times the damages sustained.
  4. In any action for damages under this section, the fact that the state, political subdivision, public agency, or person threatened with injury or injured in its business or property by any violation of the provisions of this chapter has not dealt directly with the defendant does not bar recovery.
  5. In any action for damages under this section, any defendant, as a partial or complete defense against a claim for damages, is entitled to prove that the plaintiff purchaser, or seller in the chain of manufacture, production, or distribution, who paid any overcharge or received any underpayment passed on all or any part of the overcharge or underpayment to another purchaser or seller in that action.

Source:

S.L. 1987, ch. 590, § 8; 1991, ch. 524, § 1; 2021, ch. 382, § 2, eff April 9, 2021.

Notes to Decisions

Inmate Barred From Bringing Suit.

Inmate failed to state a claim under Rule 12(b) alleging state antitrust violations under this section, requesting damages and equitable relief, because § 32-12.2-02 precludes the State from liability for inmate claims of injury or threatened injury to property; in addition, inmate could not recover equitable relief under this section as a matter of law. Burke v. North Dakota Dep't of Corrections & Rehabilitation, 2000 ND 85, 609 N.W.2d 729, 2000 N.D. LEXIS 87 (N.D. 2000).

Collateral References.

Constitutional right to jury trial in cause of action under state unfair or deceptive trade practices law, 54 A.L.R.5th 631.

Right of Retail Buyer of Price-Fixed Product to Sue Manufacturer on State Antitrust Claim, 35 A.L.R.6th 245.

51-08.1-09. Judgment in favor of state as prima facie evidence.

A final judgment or decree determining that a person has violated this chapter in an action brought by the state under section 51-08.1-07 or under subsection 1 of section 51-08.1-08, other than a consent judgment or decree entered before any testimony has been taken, is prima facie evidence against that person in any other action against that person under section 51-08.1-08 as to all matters with respect to which the judgment or decree would be an estoppel between the parties thereto. This section does not affect the application of collateral estoppel or issue preclusion.

Source:

S.L. 1987, ch. 590, § 9.

51-08.1-10. Limitation of actions.

  1. An action under section 51-08.1-07 to recover a civil penalty is barred if it is not commenced within four years after the claim for relief accrues.
  2. An action under section 51-08.1-08 to recover damages is barred if it is not commenced within four years after the claim for relief accrues, or within one year after the conclusion of any timely action brought by the state under section 51-08.1-07 or 51-08.1-08 based in whole or in part on any matter complained of in the action for damages, whichever is later.

Source:

S.L. 1987, ch. 590, § 10.

Collateral References.

Time when cause of action accrues for civil action under state antitrust, monopoly, or restraint of trade statutes, 90 A.L.R.4th 1102.

51-08.1-11. Remedies cumulative.

The remedies provided in this chapter are cumulative.

Source:

S.L. 1987, ch. 590, § 11.

51-08.1-12. Rights, privileges, and immunities.

Nothing in this chapter may be construed so as to abrogate an individual’s constitutionally guaranteed rights, privileges, and immunities.

Source:

S.L. 1987, ch. 590, § 12.

CHAPTER 51-09 Unfair Discrimination

51-09-01. Unfair discrimination in purchase and sale of commodities.

Any person, firm, company, association, corporation, or limited liability company, foreign or domestic, doing business in this state and engaged in the production, manufacture, or distribution of any commodity in general use, that, for the purpose of destroying the business of a competitor in any locality, intentionally shall discriminate between different sections, communities, or cities of this state by selling such commodity at a lower rate in one section, community, or city than is charged therefor by said party in another section, community, or city, after making due allowance for the difference, if any, in the grade or quality and in the actual cost of transportation from the point of production, if a raw product, or from the point of manufacture, if a manufactured product, is guilty of unfair discrimination.

Source:

S.L. 1907, ch. 260, § 1; C.L. 1913, § 3048; S.L. 1919, ch. 112, § 1; 1925 Supp., § 3048; R.C. 1943, § 51-0901; S.L. 1993, ch. 54, § 106.

Cross-References.

Unfair discrimination in sale of farm products, see chapter 4-14.

Notes to Decisions

Private Right of Action.

This section does not contain a private right of action for damages for violations given the legislature’s failure to expressly provide a private right of action, the comprehensive regulatory scheme set forth indicating that the legislature did not intend other remedies, and the express inclusion of a private right of action in the Antitrust Act for injunctive relief and damages indicating that the legislature knows how to create such a right if it so chooses. Trade 'N Post, L.L.C. v. World Duty Free Ams., Inc., 2001 ND 116, 628 N.W.2d 707, 2001 N.D. LEXIS 130 (N.D. 2001).

Collateral References.

Indemnity: right of corporation to indemnity for civil or criminal liability incurred by employee’s violation of antitrust laws, 37 A.L.R.3d 1355.

Area price discrimination, validity and construction of state statutes forbidding area price discrimination, 67 A.L.R.3d 26.

Implied warranty coverage for service transactions under state consumer protection and deceptive trade statutes, 72 A.L.R.4th 282.

Law Reviews.

Case Comment: Torts — Interference with Employment or Occupation, or Injury to Business: The North Dakota Supreme Court Definitively Recognizes the Tort of Unlawful Interference with Business (Trade ‘N Post, L.L.C. v. World Duty Free Ams., Inc., 2001 ND 116, 628 N.W.2d 707 (2001), 78 N.D. L. Rev. 513 (2002).

51-09-02. Penalty for unfair discrimination.

Any person violating any of the provisions of section 51-09-01 is guilty of a class A misdemeanor.

Source:

S.L. 1907, ch. 258, § 4; 1907, ch. 260, § 2; 1913, ch. 287, § 3; C.L. 1913, §§ 3046, 3049; R.C. 1943, § 51-0902; S.L. 1975, ch. 106, § 554.

51-09-03. Contracts made in violation of chapter are void.

All contracts or agreements made in violation of any of the provisions of this chapter are void.

Source:

S.L. 1907, ch. 260, § 3; C.L. 1913, § 3050; R.C. 1943, § 51-0903.

51-09-04. Authority of attorney general to investigate and prosecute unfair discrimination when complaint is made.

If a complaint is made to the attorney general that any person is guilty of unfair discrimination committed for any of the purposes enumerated in section 51-09-01, the attorney general shall investigate the matter complained of, and for that purpose the attorney general may subpoena witnesses, administer oaths, take testimony, and require the production of books or other documents belonging to the person complained against. If, in the attorney general’s opinion, sufficient grounds exist therefor, the attorney general shall prosecute an action in the name of the state of North Dakota to annul the charter, if the person complained against is a corporation or limited liability company, or to revoke the permit or license of the person complained against.

Source:

S.L. 1907, ch. 258, § 2; 1907, ch. 260, §§ 4, 6; 1913, ch. 287, § 2; C.L. 1913, §§ 3044, 3051, 3053; R.C. 1943, § 51-0904; S.L. 1993, ch. 54, § 106.

DECISIONS UNDER PRIOR LAW

Unconstitutional Grant of Power.

Former statute giving the secretary of state the power to hear evidence and decide whether a person was guilty of unfair discrimination was unconstitutional as a usurpation of the judicial function of the courts. State ex rel. Standard Oil Co. v. Blaisdell, 22 N.D. 86, 132 N.W. 769, 1911 N.D. LEXIS 23 (N.D. 1911).

Collateral References.

Constitutional right to jury trial in cause of action under state unfair or deceptive trade practices law, 54 A.L.R.5th 631.

51-09-05. Duty of attorney general to bring action to prevent corporation or limited liability company from doing business if the charter or permit canceled.

If any domestic corporation or limited liability company the charter of which has been canceled, or any foreign corporation or limited liability company the permit of which has been revoked, shall continue or attempt to do business in this state, the attorney general, by appropriate action, shall prevent such corporation or limited liability company from doing any and all business of any kind or character within this state.

Source:

S.L. 1907, ch. 258, § 3; 1907, ch. 260, § 7; C.L. 1913, §§ 3045, 3054; R.C. 1943, § 51-0905; S.L. 1993, ch. 54, § 106.

Collateral References.

Reinstatement of repealed, forfeited, expired, or suspended corporate charter as validating interim acts of corporation, 42 A.L.R.4th 392.

Constitutional right to jury trial in cause of action under state unfair or deceptive trade practices law, 54 A.L.R.5th 631.

51-09-06. Complaint to secretary of state of violation of chapter — Referring complaint to attorney general.

If a complaint is made to the secretary of state that any corporation or limited liability company authorized to do business in this state is guilty of unfair discrimination within the provisions of this chapter, the secretary of state shall refer the matter to the attorney general, who, if the facts justify it in the attorney general’s judgment, may institute proceedings against such corporation or limited liability company.

Source:

S.L. 1907, ch. 260, § 5; C.L. 1913, § 3052; R.C. 1943, § 51-0906; S.L. 1993, ch. 54, § 106.

Collateral References.

Constitutional right to jury trial in cause of action under state unfair or deceptive trade practices law, 54 A.L.R.5th 631.

CHAPTER 51-10 Unfair Trade Practices Law

51-10-01. Definitions.

In this chapter, unless the context or subject matter otherwise requires:

  1. “Cost” means the actual invoice cost of the merchandise or the replacement cost of the merchandise, whichever is the lower, less all trade discounts, advertising allowances, including customary discounts for cash, to which must be added transportation, including cartage cost, not otherwise included in the invoice cost or the replacement cost of the merchandise. If a manufacturer publishes a list price, proof of such list price, less all discounts, is prima facie evidence of “cost”.
  2. “Replacement cost” means the cost per unit at which the merchandise sold or offered for sale could have been bought by the seller at any time prior to the date of sale or the date upon which it is offered for sale by the seller.
  3. “Retailers” means and includes every person, partnership, corporation, limited liability company, or association engaged in the business of making sales at retail within this state. In the case of a person, partnership, corporation, limited liability company, or association engaged in the business of making sales at retail and sales at wholesale, such term must be applied only to the retail portion of such business.
  4. “Sell at retail”, “sales at retail”, and “retail sale” mean and include any transfer for a valuable consideration, made in the ordinary course of trade or in the usual prosecution of the seller’s business, of title to tangible personal property to the purchaser for consumption or use other than resale or further processing or manufacturing, except that sales to contractors or subcontractors engaged in any type of building operation or the repair of buildings or other improvements upon real estate must be deemed sales for consumption and not for further processing or manufacturing. The terms include any transfer of such property when title is retained by the seller as security for the payment of the purchase price.
  5. “Sell at wholesale”, “sales at wholesale”, and “wholesale sales” mean and include any transfer for a valuable consideration made in the ordinary course of trade or the usual conduct of the seller’s business, of title to tangible personal property to the purchaser for purposes of resale or further processing or manufacturing, except that sales to contractors engaged in any type of building operation or the repair of buildings or other improvements upon real estate, regardless of further processing or manufacturing of the material sold, must be deemed retail sales and not wholesale sales. The terms include any transfer of such property when title is retained by the seller as security for the payment of the purchase price.
  6. “Wholesaler” means and includes every person, partnership, corporation, limited liability company, or association engaged in the business of making sales at wholesale within this state. In the case of a person, partnership, corporation, limited liability company, or association engaged in the business of making both sales at wholesale and sales at retail, such terms must be applied only to the wholesale portion of such business.

Source:

S.L. 1941, ch. 291, § 2, subss. 1, 2, 4, 5 to 7; R.C. 1943, § 51-1001; S.L. 1993, ch. 54, § 106.

Cross-References.

Unfair dairy trade practices, see § 4-14-09.

Collateral References.

Delegation of legislative power by authorizing manufacturers of trade-marked articles to fix resale price, 3 A.L.R.2d 201.

Intoxicating liquors, state power to regulate price of, 14 A.L.R.2d 699.

Comment note: Validity of state “Fair Trade” Act as applied to nonsigning reseller, 19 A.L.R.2d 1139.

Trading stamps, premiums, or the like as violation of fair trade law, 22 A.L.R.2d 1212.

Validity, under state constitutions, of nonsigner provision of fair trade laws, 60 A.L.R.2d 420.

Who may fix resale price under Fair Trade Act specifying vendor or seller as stipulator of resale price, 64 A.L.R.2d 758.

Contract restrictions, enforceability, insofar as restrictions would be reasonable, of contract containing unreasonable restrictions on competition, 61 A.L.R.3d 397.

Delivery of merchandise, failure to deliver ordered merchandise to customer on date promised as unfair or deceptive trade practice, 7 A.L.R.4th 1257.

Validity, construction and application of state statutory provisions prohibiting sales of commodities below cost, 41 A.L.R.4th 612.

Validity, construction, and application of state statute forbidding unfair trade practice or competition by discriminatory allowance of rebates, commissions, discounts, or the like, 41 A.L.R.4th 675.

Coverage of insurance transactions under state consumer protection statutes, 77 A.L.R.4th 991.

Coverage of leases under state consumer protection statutes, 89 A.L.R.4th 854.

Who is a “consumer” entitled to protection of state deceptive trade practice and consumer protection acts, 63 A.L.R.5th 1.

World Wide Web domain as violating state trademark protection statute or state Unfair Trade Practices Act, 96 A.L.R.5th 1.

51-10-02. Items advertised, offered for sale, or sold with other items at a combined price — Regulations governing.

When one or more items are advertised, offered for sale, or sold with one or more other items at a combined price, or are advertised, offered as a gift, or given with the sale of one or more items, each and all of said items, for the purpose of this chapter, must be deemed to be advertised, offered for sale, or sold, and the price of each item named must be governed by the provisions of subsection 1 or 2 of section 51-10-01, respectively.

Source:

S.L. 1941, ch. 291, § 2, subs. 3; R.C. 1943, § 51-1002.

Notes to Decisions

Franchise Fee.

Where corporation marketed its product through distributors under a multi-level marketing plan, and to become a distributor a fee was charged for a literature package and to become a direct distributor a fee entitled “booking entry fee” was charged, those charges constituted a franchise fee. Meadow Fresh Farms v. Sandstrom, 333 N.W.2d 780, 1983 N.D. LEXIS 263 (N.D. 1983).

51-10-03. Unfair advertising, offer to sell, or sale.

Any advertising, offer to sell, or sale of any merchandise, either by retailers or wholesalers, at less than cost as defined in this chapter, which has the intent or the effect of inducing the purchase of other merchandise or of unfairly diverting trade from a competitor or otherwise injuring a competitor, impairs and prevents fair competition, injures public welfare, and is unfair competition and contrary to public policy and the policy of this chapter, if the result of such advertising, offer, or sale is to tend to deceive any purchaser or prospective purchaser, or substantially to lessen competition, or unreasonably to restrain trade, or to tend to create a monopoly in any line of commerce.

Source:

S.L. 1941, ch. 291, § 3; R.C. 1943, § 51-1003.

Notes to Decisions

Class Action.

In an action brought against corporate defendant for violations of the unfair trade practices law, the trial court, in granting class certification, did not err in determining that common questions predominated over individual issues and that management of the class would not be unusually difficult. Howe v. Microsoft Corp., 2003 ND 12, 656 N.W.2d 285, 2003 N.D. LEXIS 13 (N.D. 2003).

Private Right of Action.

This section does not contain a private right of action for damages for violations given the legislature’s failure to expressly provide a private right of action, its express provision for injunctive relief indicating that the legislature did not intend other remedies, and the express inclusion of a private right of action for injunctive relief and damages in the Antitrust Act indicating that the legislature knows how to create such a right if it so chooses. Trade 'N Post, L.L.C. v. World Duty Free Ams., Inc., 2001 ND 116, 628 N.W.2d 707, 2001 N.D. LEXIS 130 (N.D. 2001).

Collateral References.

Validity, construction, and application of state statute provision prohibiting sales of commodities below cost—modern cases, 41 A.L.R.4th 612.

Validity, construction, and application of state statute forbidding unfair trade practice or competition by discriminatory allowance of rebates, commissions, discounts, or the like, 41 A.L.R.4th 675.

51-10-04. Schemes or devices included within sales below cost.

The inhibition against sales below cost, as defined in this chapter, shall embrace any scheme of special rebate, collateral contract, or any device of any nature by which such result is, in substance or in fact, effected in violation of the spirit and intent of this chapter.

Source:

S.L. 1941, ch. 291, § 3; R.C. 1943, § 51-1004.

Collateral References.

Validity, construction, and application of state statute forbidding unfair trade practice or competition by discriminatory allowance of rebates, commissions, discounts, or the like, 41 A.L.R.4th 675.

51-10-05. Advertising, offering, or selling article at less than cost — Penalty.

Any retailer or wholesaler who shall advertise, offer to sell, or sell any article of merchandise at less than cost to such retailer or wholesaler as defined in this chapter, or who gives, offers to give, or advertises the intent to give away any article of merchandise, with the intent, or with the effect of injuring competitors and destroying competition, is guilty of a class A misdemeanor.

Source:

S.L. 1941, ch. 291, § 4; R.C. 1943, § 51-1005; S.L. 1975, ch. 106, § 555.

Collateral References.

Validity, construction, and application of state statutory provision prohibiting sales of commodities below cost—modern cases, 41 A.L.R.4th 612.

Validity, construction, and application of state statute forbidding unfair trade practice or competition by discriminatory allowance of rebates, commissions, discounts, or the like, 41 A.L.R.4th 675.

51-10-05.1. Powers of attorney general.

When it appears to the attorney general that a person has engaged in, or is engaging in, any practice declared to be unlawful by this chapter or when the attorney general believes it to be in the public interest that an investigation should be made to ascertain whether a person in fact has engaged in, is engaging in, or is about to engage in, any such practice the attorney general may:

  1. Require that person to file on forms prescribed by the attorney general, a statement or report in writing, under oath or otherwise, as to all the facts and circumstances concerning the sale or advertisement of merchandise at less than cost as defined in this chapter and any other data and information the attorney general may deem necessary.
  2. Examine under oath any person in connection with the sale or advertisement of any merchandise at less than cost as defined in this chapter.
  3. Examine any merchandise or sample of merchandise, record, book, document, account, or paper as the attorney general may deem necessary.
  4. Pursuant to an order of a district court impound any record, book, document, account, paper, or sample of merchandise material to such practice and retain it until completion of all relevant proceedings under this chapter.

Source:

S.L. 1991, ch. 525, § 1.

51-10-05.2. Subpoena — Hearing — Rules.

The attorney general may issue subpoenas to any person, administer an oath or affirmation to any person, conduct hearings in the aid of any investigation of inquiry, prescribe forms, and adopt necessary rules.

Source:

S.L. 1991, ch. 525, § 1.

51-10-05.3. Failure to display information or obey subpoena.

If any person fails or refuses to file any statement or report, or obey any subpoena issued by the attorney general, the attorney general may file in the district court a petition for an order directing the person to file the required statement or report or to obey the subpoena. The order may be granted by the district court after notice and hearing.

Source:

S.L. 1991, ch. 525, § 1.

51-10-06. Injunctional relief may be had in addition to other penalties — Duty to commence actions.

In addition to the penalties provided in this chapter, the courts of this state are invested with the jurisdiction to prevent and restrain violations of this chapter by injunctional proceedings. The attorney general and the several state’s attorneys shall institute suits in behalf of this state, to prevent and restrain violations of the provisions of this chapter. Any person damaged, or who is threatened with loss or injury, by reason of a violation of the provisions of this chapter, is entitled to sue for and have injunctive relief in the district court against any damage or threatened loss or injury by reason of a violation hereof.

Source:

S.L. 1941, ch. 291, § 5; R.C. 1943, § 51-1006; S.L. 1965, ch. 330, § 1; 1973, ch. 387, § 1; 1991, ch. 525, § 2.

Collateral References.

Constitutional right to jury trial in cause of action under state unfair or deceptive trade practices law, 54 A.L.R.5th 631.

51-10-07. Application of provisions of chapter.

The provisions of this chapter do not apply to sales at retail or sales at wholesale, where:

  1. Merchandise is sold in bona fide clearance sales, if advertised, marked, and sold as such.
  2. Perishable merchandise must be sold promptly in order to forestall loss.
  3. Merchandise is imperfect or damaged, or is being discontinued and is advertised, marked, and sold as such.
  4. Merchandise is sold upon the final liquidation of any business.
  5. Merchandise is sold for charitable purposes or to relief agencies.
  6. Merchandise is sold on contract to departments of the government or government institutions.
  7. The price of merchandise is made in good faith to meet legal competition.
  8. Merchandise is sold by any officer acting under the order or direction of any court.

Any retailer or wholesaler claiming the benefits of any of the exemptions provided for in this section shall have the burden of proof of facts entitling such retailer or wholesaler to any of the benefits of said exemptions.

Source:

S.L. 1941, ch. 291, § 6; R.C. 1943, § 51-1007.

51-10-08. No immunity from self-incrimination.

No person subpoenaed or ordered may be excused from attending and testifying or from producing books, records, correspondence, documents, or other evidence in any civil action or proceeding instituted or brought, pursuant to the provisions of this chapter, upon the ground that the testimony or evidence required of that person may tend to incriminate that person or subject that person to a penalty or forfeiture. No person may be prosecuted or subjected to any penalty or forfeiture for or on account of any act, transaction, matter, or thing concerning which that person is compelled, after having claimed the privilege against self-incrimination, to testify or produce evidence. The provisions of this section do not exempt any person from prosecution or punishment for perjury.

Source:

S.L. 1941, ch. 291, § 7; R.C. 1943, § 51-1008.

Cross-References.

Perjury, see § 12.1-11-01.

Privilege against self-incrimination, criminal proceedings, see N.D. Const., Art. I, § 12; § 31-01-09.

51-10-09. Proof of intent — Cost surveys. [Repealed]

Repealed by S.L. 1991, ch. 525, § 4.

51-10-10. Procedure for establishing cost survey — Hearing — Notice. [Repealed]

Repealed by S.L. 1991, ch. 525, § 4.

51-10-11. Hearings and investigations — Contempts. [Repealed]

Repealed by S.L. 1991, ch. 525, § 4.

51-10-12. North Dakota trade commission. [Repealed]

Repealed by S.L. 1991, ch. 525, § 4.

51-10-13. Appointment and term of members. [Repealed]

Repealed by S.L. 1991, ch. 525, § 4.

51-10-14. Retailer’s license — Penalty. [Repealed]

Repealed by S.L. 1991, ch. 525, § 4.

51-10-15. Disbursement of funds. [Repealed]

Repealed by S.L. 1991, ch. 525, § 4.

CHAPTER 51-11 Fair Trade Law [Repealed]

[Repealed by S.L. 1979, ch. 516, § 1]

CHAPTER 51-12 False Advertising

51-12-01. False and misleading advertising prohibited.

  1. No person with intent to sell, dispose of, increase the consumption of, or induce the public to enter an obligation relative to or to acquire title or interest in any product, merchandise, security, service, performance, or anything offered to the public may make, publish, disseminate, circulate, broadcast, or place before the public, or directly or indirectly shall cause to be made, published, disseminated, circulated, broadcast, or placed before the public in a newspaper, or other publication, or in the form of a book, notice, handbill, poster, bill, circular, pamphlet, tab, label, letter, television or radio broadcast, placement on the internet, or in any other way, an advertisement or web page that contains any assertion, representation, or statement of fact, including the price thereof or name suggesting the business location of the offeror, which is untrue, deceptive, or misleading regarding such product, merchandise, security, service, performance, price, business location, or anything offered to the public.
  2. It is not a violation of this section to advertise a performance by a performing group if at least one member of the performing group was a member of the recording group, the performance is identified as a “salute” or “tribute” to the recording group, the performance is expressly authorized in the advertising by the recording group, the advertising does not relate to a live music performance taking place in this state, or the advertising contains a disclaimer that the performing group is not the recording group or is not affiliated with the recording group.
  3. This section imposes liability on only the offeror of a product or service. This section does not impose liability on a publisher, broadcaster, other advertising media, or an advertising agency that relies on the assurances of a person placing an advertisement that the claims or representations are true.

Source:

S.L. 1963, ch. 330, § 1; 1993, ch. 54, § 106; 2005, ch. 441, § 1; 2011, ch. 373, § 1.

Effective Date.

The 2011 amendment of this section by section 1 of chapter 373, S.L. 2011 became effective August 1, 2011.

Note.

Former section 51-12-01 (S.L. 1913, ch. 3, § 1; C.L. 1913, § 9989; R.C. 1943, § 51-1201), prohibiting false and misleading advertising, was repealed by section 2 of chapter 310, S.L. 1961. Section 1 of ch. 330, S.L. 1963 was assigned this section number because the subject and language are nearly identical.

Cross-References.

Unlawful advertising as to use tax, see § 57-40.2-08.

Notes to Decisions

Civil Action for Damages.

Criminal penalties and injunctions are not the exclusive remedies for false advertising. One injured by a violation of the false advertising statutes may bring an action to recover damages. Fargo Women's Health Org. v. FM Women's Help & Caring Connection, 444 N.W.2d 683, 1989 N.D. LEXIS 163 (N.D. 1989), overruled in part, Trade 'N Post, L.L.C. v. World Duty Free Ams., Inc., 2001 ND 116, 628 N.W.2d 707, 2001 N.D. LEXIS 130 (N.D. 2001).

Where defendant engaged in false advertising, resulting in a decline in plaintiff’s business and causing plaintiff to counteract with its own advertisements to mitigate damages, plaintiff was not limited to injunctive relief under the false advertising statutes, and was allowed to collect actual and punitive damages and court costs. Fargo Women's Health Org. v. FM Women's Help & Caring Connection, 444 N.W.2d 683, 1989 N.D. LEXIS 163 (N.D. 1989), overruled in part, Trade 'N Post, L.L.C. v. World Duty Free Ams., Inc., 2001 ND 116, 628 N.W.2d 707, 2001 N.D. LEXIS 130 (N.D. 2001).

Court granted a herbicide manufacturer summary judgment as to a farm corporation’s claim of false advertising under N.D.C.C. §§ 51-12-01, 51-12-08 because the only relief available under N.D.C.C. ch. 51-12 was injunctive relief, and while the corporation had standing to maintain an action for injunctive relief under N.D.C.C. § 51-12-14, the complaint made no request for injunctive relief; the corporation sought only economic and non-economic damages, costs, disbursements, attorney’s fees, and such other and further relief that the court deemed just and appropriate, but the language “such other and further relief” did not amount to a request for injunctive relief in the case. DJ Coleman, Inc. v. Nufarm Ams., Inc., 693 F. Supp. 2d 1055, 2010 U.S. Dist. LEXIS 24707 (D.N.D. 2010).

Standard of Proof.

When an action brought under this chapter or chapter 51-15 is based upon allegations of fraudulent conduct, the “clear and convincing evidence” standard does not apply; the alleged fraudulent conduct must be proved by a preponderance of the evidence. State ex rel. Spaeth v. Eddy Furniture Co., 386 N.W.2d 901, 1986 N.D. LEXIS 317 (N.D. 1986).

Standing.

Individual claiming that a brochure distributed by the medical clinic violated false advertising laws did not have standing to bring the suit; she lacked injury, and she admitted that she had not even read the brochures before bringing suit. Kjolsrud v. MKB Mgmt. Corp., 2003 ND 144, 669 N.W.2d 82, 2003 N.D. LEXIS 155 (N.D. 2003).

Collateral References.

Federal Trade Commission, what constitutes false, misleading, or deceptive advertising or promotional practices subject to action by, 65 A.L.R.2d 225, section 10 superseded by 34 A.L.R. Fed. 507.

Bait-and-switch: validity, construction, and effect of state legislation regulating or controlling “bait-and-switch” or “disparagement” advertising or sales practices, 50 A.L.R.3d 1008.

Consumer class actions based on fraud or misrepresentation, 53 A.L.R.3d 534.

Temporary relief against unfair trade practices under 15 USCS sec. 53, 34 A.L.R. Fed. 507.

51-12-02. Penalty.

Any person who violates any of the provisions of section 51-12-01 is guilty of a class B misdemeanor.

Source:

S.L. 1963, ch. 330, § 2; 1975, ch. 106, § 557.

Notes to Decisions

Civil Action for Damages.

Criminal penalties and injunctions are not the exclusive remedies for false advertising. One injured by a violation of the false advertising statutes may bring an action to recover damages. Fargo Women's Health Org. v. FM Women's Help & Caring Connection, 444 N.W.2d 683, 1989 N.D. LEXIS 163 (N.D. 1989), overruled in part, Trade 'N Post, L.L.C. v. World Duty Free Ams., Inc., 2001 ND 116, 628 N.W.2d 707, 2001 N.D. LEXIS 130 (N.D. 2001).

Effect of False Advertising on Contracts.

False and misleading newspaper advertising concerning child photography contest made contracts between photographer and merchants, whereby the latter had agreed to honor merchandise certificates issued to winners, unenforceable. Voss v. Becko, 192 F.2d 827, 1951 U.S. App. LEXIS 4074 (8th Cir. N.D. 1951).

Scope of Statute.

False representation that party was a certified public accountant did not subject such party to the criminal sanctions contained in former statute. Brissman v. Thistlethwaite, 49 N.D. 429, 192 N.W. 90, 1922 N.D. LEXIS 73 (N.D. 1922).

51-12-02.1. Popcorn toppings — Advertisement — Sale — Penalty.

No person advertising, offering for sale, or selling popcorn intended for consumption on the premises where purchased may use the word butter, or any derivative of the word butter, to describe a topping placed on popcorn, unless the topping is real butter or unless the word butter, or derivative of the word butter, is a part of the commercial brand name of the topping product. The allowable use under this section of the word butter, or any derivative of the word butter, as part of the commercial brand name of a topping product is limited to use in that manner and popcorn with such a topping may not be described as buttered popcorn. Any person who violates this section is guilty of an infraction.

Source:

S.L. 1991, ch. 526, §§ 1, 2.

51-12-03. Enforcement of provision prohibiting false advertisement. [Repealed]

Repealed by S.L. 1961, ch. 310, § 2.

51-12-04. Prohibiting use of certain federal and related names in sales of merchandise. [Repealed]

Repealed by S.L. 1975, ch. 106, § 673.

51-12-05. Representation that article has federal relationship prohibited. [Repealed]

Repealed by S.L. 1975, ch. 106, § 673.

51-12-06. Penalty. [Repealed]

Repealed by S.L. 1975, ch. 106, § 673.

51-12-07. Injunction. [Repealed]

Repealed by S.L. 1975, ch. 106, § 673.

51-12-08. False advertising — Generally.

It is unlawful for any person with intent, directly or indirectly, to dispose of real or personal property or to perform services, professional or otherwise, or anything of any nature whatsoever or to induce the public to enter into any obligation relating thereto, to make or disseminate or cause to be made or disseminated before the public in this state, in any newspaper or other publication, or any advertising device, or by public outcry or proclamation, or in any other manner or means whatever, any statement, concerning such real or personal property or services, professional or otherwise or concerning any circumstance or matter of fact connected with the proposed performance or disposition thereof, which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading.

Source:

S.L. 1961, ch. 310, § 1.

Notes to Decisions

Standard of Proof.

When an action brought under this chapter or chapter 51-15 is based upon allegations of fraudulent conduct, the “clear and convincing evidence” standard does not apply; the alleged fraudulent conduct must be proved by a preponderance of the evidence. State ex rel. Spaeth v. Eddy Furniture Co., 386 N.W.2d 901, 1986 N.D. LEXIS 317 (N.D. 1986).

Court granted a herbicide manufacturer summary judgment as to a farm corporation’s claim of false advertising under N.D.C.C. §§ 51-12-01, 51-12-08 because the only relief available under N.D.C.C. ch. 51-12 was injunctive relief, and while the corporation had standing to maintain an action for injunctive relief under N.D.C.C. § 51-12-14, the complaint made no request for injunctive relief; the corporation sought only economic and non-economic damages, costs, disbursements, attorney’s fees, and such other and further relief that the court deemed just and appropriate, but the language “such other and further relief” did not amount to a request for injunctive relief in the case. DJ Coleman, Inc. v. Nufarm Ams., Inc., 693 F. Supp. 2d 1055, 2010 U.S. Dist. LEXIS 24707 (D.N.D. 2010).

Standing.

Individual claiming that a brochure distributed by the medical clinic violated false advertising laws did not have standing to bring the suit; she lacked injury, and she admitted that she had not even read the brochures before bringing suit. Kjolsrud v. MKB Mgmt. Corp., 2003 ND 144, 669 N.W.2d 82, 2003 N.D. LEXIS 155 (N.D. 2003).

51-12-09. Representation as to worth or value.

For the purpose of sections 51-12-08 through 51-12-14 the worth or value of any thing advertised is the prevailing market price, wholesale if the offer is at wholesale, retail if the offer is at retail, at the time of publication of the advertisement in the locality wherein the advertisement is published.

No price may be advertised as a former price of any advertised thing unless the alleged former price was the prevailing market price as above defined within three months next immediately preceding the publication of the advertisement or unless the date when the alleged former price did prevail is clearly, exactly, and conspicuously stated in the advertisement.

This section does not apply to any publisher, owner, or employee of a newspaper, magazine, broadcasting or cable station, advertising device, or other publication by any means of communication, who publishes an advertisement in good faith, without knowledge of its false, deceptive, or misleading character; nor to any owner, manager, or employee of an advertising agency or a printer that prepares, places, or prints an advertisement in good faith, without knowledge of its false, deceptive, or misleading character; nor to any employee of the person who offers the advertised thing if that employee in good faith relied on the statements of the person and did not have knowledge that the statements were false, deceptive, or misleading.

Source:

S.L. 1961, ch. 310, § 1; 1995, ch. 475, § 1.

Notes to Decisions

Standard of Proof.

When an action brought under this chapter or chapter 51-15 is based upon allegations of fraudulent conduct, the “clear and convincing evidence” standard does not apply; the alleged fraudulent conduct must be proved by a preponderance of the evidence. State ex rel. Spaeth v. Eddy Furniture Co., 386 N.W.2d 901, 1986 N.D. LEXIS 317 (N.D. 1986).

51-12-10. Real estate.

It is unlawful for any person to make or disseminate any statement or assertion of fact in a newspaper, circular, form letter, or other publication published or circulated in any language in this state, concerning the extent, location, ownership, title, or other characteristic, quality, or attribute of any real estate located in this state or elsewhere, which is known to the person to be untrue and which is made or disseminated with the intention of misleading.

Nothing in this section may be construed to hold the publisher of any newspaper, or any job printer, liable for any publication herein referred to unless the publisher or printer has an interest either as owner or agent, in the real estate so advertised.

Source:

S.L. 1961, ch. 310, § 1.

Notes to Decisions

Standard of Proof.

When an action brought under this chapter or chapter 51-15 is based upon allegations of fraudulent conduct, the “clear and convincing evidence” standard does not apply; the alleged fraudulent conduct must be proved by a preponderance of the evidence. State ex rel. Spaeth v. Eddy Furniture Co., 386 N.W.2d 901, 1986 N.D. LEXIS 317 (N.D. 1986).

51-12-11. Used merchandise or seconds.

It is unlawful for any person in any newspaper, magazine, circular, form letter, or any open publication, published, distributed, or circulated in this state or on any billboard, card, label, or other advertising medium, or by means of any other advertising device, to advertise, call attention to, or give publicity to the sale of any merchandise, which merchandise is secondhand or used merchandise, or which merchandise is defective in any manner, or which merchandise consists of articles or units or parts known as “seconds”, or blemished merchandise, or which merchandise has been rejected by the manufacturer thereof as not first class, unless there be conspicuously displayed directly in connection with the name and description of such merchandise and each specified article, unit, or part thereof, a direct and unequivocal statement, phrase, or word which will clearly indicate that such merchandise or each article, unit, or part thereof so advertised is secondhand, used, defective, or consists of “seconds” or is blemished merchandise, or has been rejected by the manufacturer thereof, as the fact shall be.

Source:

S.L. 1961, ch. 310, § 1.

Notes to Decisions

Standard of Proof.

When an action brought under this chapter or chapter 51-15 is based upon allegations of fraudulent conduct, the “clear and convincing evidence” standard does not apply; the alleged fraudulent conduct must be proved by a preponderance of the evidence. State ex rel. Spaeth v. Eddy Furniture Co., 386 N.W.2d 901, 1986 N.D. LEXIS 317 (N.D. 1986).

51-12-12. Newspaper — Misrepresenting circulation.

It is unlawful for any proprietor or publisher of any newspaper or periodical willfully and knowingly to misrepresent the circulation of the newspaper or periodical, for the purpose of securing advertising or other patronage.

Source:

S.L. 1961, ch. 310, § 1.

Notes to Decisions

Standard of Proof.

When an action brought under this chapter or chapter 51-15 is based upon allegations of fraudulent conduct, the “clear and convincing evidence” standard does not apply; the alleged fraudulent conduct must be proved by a preponderance of the evidence. State ex rel. Spaeth v. Eddy Furniture Co., 386 N.W.2d 901, 1986 N.D. LEXIS 317 (N.D. 1986).

51-12-13. Penalty.

Any person who violates any of the provisions of sections 51-12-08 through 51-12-12 is guilty of a class B misdemeanor.

Source:

S.L. 1961, ch. 310, § 1; 1975, ch. 106, § 558.

51-12-14. Injunction.

Any person who violates or proposes to violate any of the provisions of sections 51-12-08 through 51-12-12 may be enjoined by any court of competent jurisdiction.

Actions for injunction under this section may be prosecuted by the attorney general or any state’s attorney in this state in the name of the people of the state of North Dakota upon their own complaint or upon the complaint of any board, officer, person, corporation, limited liability company, or association or by any person acting for the interests of itself, its members, or the general public.

Source:

S.L. 1961, ch. 310, § 1; 1993, ch. 54, § 106.

Notes to Decisions

Standing.

Individual claiming that a brochure distributed by the medical clinic violated false advertising laws did not have standing to bring the suit; she lacked injury, and she admitted that she had not even read the brochures before bringing suit. Kjolsrud v. MKB Mgmt. Corp., 2003 ND 144, 669 N.W.2d 82, 2003 N.D. LEXIS 155 (N.D. 2003).

Court granted a herbicide manufacturer summary judgment as to a farm corporation’s claim of false advertising under N.D.C.C. §§ 51-12-01, 51-12-08 because the only relief available under N.D.C.C. ch. 51-12 was injunctive relief, and while the corporation had standing to maintain an action for injunctive relief under N.D.C.C. § 51-12-14, the complaint made no request for injunctive relief; the corporation sought only economic and non-economic damages, costs, disbursements, attorney’s fees, and such other and further relief that the court deemed just and appropriate, but the language “such other and further relief” did not amount to a request for injunctive relief in the case. DJ Coleman, Inc. v. Nufarm Ams., Inc., 693 F. Supp. 2d 1055, 2010 U.S. Dist. LEXIS 24707 (D.N.D. 2010).

Unauthorized Practice of Architecture.

Advertising by corporation that it was engaged in practice of architecture, an activity which it could not legally perform, could be enjoined under this section. State Bd. of Architecture v. Kirkham, Michael & Assocs., 179 N.W.2d 409, 1970 N.D. LEXIS 102 (N.D. 1970).

State board of architecture had authority to maintain an action under this section, acting on behalf of general public, to enjoin false advertising of architectural services in violation of section 51-12-08. State Bd. of Architecture v. Kirkham, Michael & Assocs., 179 N.W.2d 409, 1970 N.D. LEXIS 102 (N.D. 1970).

Licensed architect had standing, on behalf of himself and all others so situated, to bring action to enjoin unauthorized practice of architecture by corporation, without special showing of injury and without proceeding first before state board. Harrie v. Kirkham, Michael & Assocs., 179 N.W.2d 413, 1970 N.D. LEXIS 101 (N.D. 1970).

51-12-15. Product rebates — Acceptable mailing addresses.

A person who is eligible to receive a mail-in rebate for the purchase of a product or merchandise must be given the option of providing either a street address or a post-office box number as a mailing address.

Source:

S.L. 2005, ch. 442, § 1.

CHAPTER 51-13 Retail Installment Sales Act

51-13-01. Definitions.

In this chapter, unless the context or subject matter otherwise requires:

  1. “Amount financed” or “unpaid balance” means the cash price of the personal property which is the subject matter of the retail installment sale, plus the amounts, if any, included in a retail installment sale for insurance and official fees, minus the amount of the buyer’s downpayment in money or goods.
  2. “Cash price” means the cash price stated in a retail installment contract for which the seller would sell to the buyer, and the buyer would buy from the seller, the personal property which is the subject matter of the contract if the sale were a sale for cash instead of a retail installment sale. The cash price may include any taxes and cash prices for accessories included in a retail installment sale.
  3. “Deferred payment price” means the total of the cash price and the amounts, if any, included for insurance, official fees, and finance charge.
  4. “Finance charge” means the amount which the retail buyer contracts to pay or pays for the privilege of purchasing the personal property to be paid for by the buyer in installments; it does not include the amounts, if any, charged for insurance premiums, delinquency charges, attorney’s fees, court costs, collection expenses, or official fees.
  5. “Financing agency” means a person engaged, in whole or in part, in the business of purchasing retail installment contracts from one or more retail sellers. The term includes a bank, trust company, finance company, or investment company, if so engaged. The term also includes a retail seller engaged, in whole or in part, in the business of holding retail installment contracts acquired from retail buyers. The term does not include the pledgee of an aggregate number of such contracts to secure a bona fide loan thereon.
  6. “Holder” means the seller of the personal property under or subject to the contract, or, if the contract is purchased by a financing agency or other assignee, the financing agency or other assignee.
  7. “Official fees” means the filing or other fees required by law to be paid to a public officer to perfect the interest or lien retained or taken by a seller under the retail installment contract, and to file or record a release, satisfaction, or discharge of the contract, and license, certificate of title, and registration fees imposed by law.
  8. “Person” means an individual, partnership, corporation, limited liability company, association, or other group, however organized.
  9. “Retail buyer” or “buyer” means a person who buys personal property from a retail seller in a retail installment sale.
  10. “Retail installment contract” or “contract” means an agreement, entered into in this state, pursuant to which the title to or a lien upon the personal property, which is the subject matter of a retail installment sale, is retained or taken by a retail seller from a retail buyer as security, in whole or in part, for the buyer’s obligation, or a contract for the bailment or leasing of personal property by which the bailee or lessee contracts to pay as compensation for its use a sum substantially equivalent to or in excess of its value and by which it is agreed that the bailee or lessee is bound to become, or has the option of becoming, the owner of the personal property upon full compliance with the terms of the contract.
  11. “Retail installment sale” or “sale” means a sale, other than for the purpose of resale, of personal property by a retail seller to a retail buyer for a price payable in one or more deferred payments.
  12. “Retail seller” or “seller” means a person who sells personal property to a retail buyer.
  13. “Total of payments” or “time balance” means the total of the unpaid balance and the amount of the finance charge, if any, payable by the buyer.

Source:

S.L. 1957, ch. 322, § 1; R.C. 1943, 1957 Supp., § 51-1301; S.L. 1959, ch. 352, § 1; 1979, ch. 517, § 1; 1993, ch. 54, § 106.

Cross-References.

Consumer Finance Act, see chapter 13-03.1.

Notes to Decisions

Retail Installment Contract.

The test in determining whether an agreement with an option to purchase is a true lease or a conditional sale is whether the option to purchase at the end of the lease term is for a substantial sum, indicating a true lease, or a nominal amount, indicating a conditional sale. Wallwork Lease & Rental Co. v. JNJ Inv., 303 N.W.2d 545, 1981 N.D. LEXIS 217 (N.D. 1981).

Collateral References.

Constitutionality, construction, and application of statute respecting sale, assignment or transfer of retail installment contracts, 10 A.L.R.2d 447.

What constitutes “finance charge” under sec. 106(a) of the Truth in Lending Act (15 USCS sec. 1605(a)) or applicable regulations, 154 A.L.R. Fed. 431.

51-13-02. Requirements as to retail installment contracts.

  1. A retail installment contract must be dated and in writing, and must contain all the agreements of the parties with respect to the cost and terms of payment for the personal property, including any promissory notes or other evidences of indebtedness between the parties relating to the transaction.
  2. If the retail installment sale for which the retail installment contract is made is not subject to the Truth in Lending Act [15 U.S.C. 1601-1667f], or if the retail installment sale is subject to that Act and the seller does not comply with all the requirements of that Act, this subsection applies.
    1. The printed portion of the contract must be in at least eight-point type. The contract must contain printed or written in a size equal to at least ten-point bold type:
      1. Either at the top of the contract or directly above the space reserved for the signature of the buyer, the words “RETAIL INSTALLMENT CONTRACT”.
      2. A specific statement that liability insurance coverage for bodily injury and property damage caused to others is not included, if that is the case.
      3. The following notice: “NOTICE TO THE BUYER: 1. Do not sign this contract before you read it or if it contains any blank space. 2. You are entitled to a completely filled-in copy of this contract when you sign it. 3. Under the law, you have the following rights, among others: (a) to pay off in advance the full amount due and to obtain a partial refund of the finance charge; (b) to redeem the property if repossessed for a default within the time provided by law; (c) to require, under certain conditions, a resale of the property if repossessed. 4. If you desire to pay off in advance the full amount due, the amount of the refund you are entitled to, if any, will be furnished upon request.”
    2. The seller shall deliver to the buyer a legible copy of the contract or any other document the seller has required or requested the buyer to sign. Until the seller does so, a buyer who has not received delivery of the personal property has an unconditional right to cancel the contract and to receive immediate refund of all payments made and redelivery of all goods traded in to the seller on account of or in contemplation of the contract. Any acknowledgment by the buyer of delivery of a copy of the contract must be printed or written in a size equal to at least ten-point bold type and, if contained in the contract, must also appear directly above the space reserved for the buyer’s signature. The buyer’s written acknowledgment of delivery of a copy of a contract is conclusive proof of such delivery and of compliance with this subdivision in any action or proceeding by or against an assignee of the contract without knowledge to the contrary when the assignee purchases the contract.
    3. The contract must contain:
      1. The names of the seller and the buyer, the place of business of the seller, the residence or place of business of the buyer as specified by the buyer and a description of the personal property including its make, year model, model and identification numbers or marks, if any, and whether it is new or used.
      2. The cash price of the personal property which is the subject matter of the retail installment sale.
      3. The amount of the buyer’s downpayment, itemizing the amounts paid in money and in goods and containing a brief description of the goods, if any, traded in.
      4. The difference between paragraphs 2 and 3, which is the unpaid balance of cash price.
      5. The amount, if any, included for insurance, specifying the coverages.
      6. The amount, if any, of official fees.
      7. The amount financed, which is the sum of paragraphs 4, 5, and 6.
      8. The amount of the finance charge, if any.
      9. The total of payments, which is the sum of paragraphs 7 and 8, payable by the buyer to the seller, the number of installments required, the amount of each installment expressed in dollars, and the due date or period thereof.
      10. The deferred payment price, which is the sum of the amounts determined in paragraphs 2, 5, 6, and 8.
      11. If any installment substantially exceeds in amount any prior installment other than the downpayment, the following legend printed in at least ten-point bold type or typewritten: “THIS CONTRACT IS NOT PAYABLE IN INSTALLMENTS OF EQUAL AMOUNTS”, followed, if there be but one larger installment, by: “AN INSTALLMENT OF $ _____________________________________  WILL BE DUE ON  _______________________________________ ”, or, if there be more than one larger installment, by: “LARGER INSTALLMENTS WILL BE DUE AS FOLLOWS:  _______________________________________ ”, in such latter case inserting the amount of every larger installment and its due date.
      12. Any balloon payments. If any payment under a contract is more than twice the amount of an otherwise regularly scheduled equal payment, the seller shall identify the amount of such payment by the term “balloon payment”.
    4. If the cost of any insurance is included in the contract and a separate charge is made to the buyer for the insurance:
      1. The contract must state whether the insurance is to be procured by the buyer or the seller.
      2. If the insurance is to be procured by the seller or holder, the seller or holder shall within thirty days after execution of the retail installment contract send or cause to be sent to the buyer a policy or policies or certificate of insurance, written by an insurance company authorized to do business in this state and sold by a licensed insurance agent.
    5. A contract may provide for the payment by the buyer of a delinquency and collection charge on each installment in default for a period of more than ten days in an amount equal to ten percent of the delinquent installment payment or ten dollars, whichever is less; provided, that only one such delinquency and collection charge may be collected on each installment in addition to interest accruing thereon.
    6. No retail installment contract may be signed by any party thereto when it contains blank spaces to be filled in after it has been signed except that, if delivery of the personal property is not made at the time of the execution of the contract, the identifying numbers or marks of the property or similar information and the due date of the first installment may be inserted in the contract after its execution.
  3. If a retail installment sale is also subject to the Truth in Lending Act [15 U.S.C. 1601-1667e], the seller may, instead of complying with the disclosure requirements of subsection 2, comply with all requirements of the Truth in Lending Act. A seller who complies with the Truth in Lending Act still must comply with the provisions of this section governing matters other than disclosure.

The items need not be stated in the sequence or order set forth above; additional items may be included to explain the calculations involved in determining the amount to be paid by the buyer.

If any such policy or certificate is canceled, the unearned insurance premium refund received by the holder of the contract must be credited to the final maturing installments of the retail installment contract except to the extent applied toward payment for similar insurance protecting the interests of the buyer and holder of the contract or either of them.

Source:

S.L. 1957, ch. 322, § 2; R.C. 1943, 1957 Supp., § 51-1302; S.L. 1959, ch. 352, § 1; 1979, ch. 517, § 2; 1983, ch. 532, § 1; 2015, ch. 351, § 1, eff August 1, 2015.

Effective Date.

The 2015 amendment of this section by section 1 of chapter 351, S.L. 2015 became effective August 1, 2015.

Collateral References.

Late charge, validity and construction of provision imposing “late charge” or similar exaction for delay in making periodic payments on note, mortgage, or installment sale contract, 63 A.L.R.3d 50.

Notes to Decisions

Finance Charges.

Retail installment contracts did not comply with the disclosure requirements of the Retail Installment Sales Act because a “loan fee” that was undisputedly a finance charge was not so disclosed in the amount identified as “finance charges.”Baker v. Autos, Inc., 2019 ND 82, 924 N.W.2d 441, 2019 N.D. LEXIS 81 (N.D. 2019).

51-13-02.1. Retail installment contracts — Prohibited provisions.

No contract may contain any provision by which:

  1. In the absence of the buyer’s default, the holder may, arbitrarily and without reasonable cause, accelerate the maturity of any part or all of the time balance owing thereunder.
  2. A power of attorney is given to confess judgment in this state, or an assignment of wages is given.
  3. The buyer waives any claim for relief against the seller or holder of the contract, or other person acting on the seller’s or holder’s behalf, for any illegal act committed in the collection of payments under the contract or in the repossession of the personal property.
  4. The buyer executes a power of attorney appointing the seller or holder of the contract, or other person acting on the seller’s or holder’s behalf, as the buyer’s agent in collection of payments under the contract or in the repossession of the personal property.
  5. The buyer relieves the seller from liability for any legal remedies which the buyer may have against the seller under the contract or any separate instrument executed in connection therewith.
  6. The buyer may subsequently include the title to or a lien upon any goods, other than the personal property which is the subject matter of the retail installment sale and any accessories or special or auxiliary equipment used in connection therewith, or in substitution, in whole or in part, for any thereof, as security for payment of the deferred payment price.

Source:

S.L. 1979, ch. 517, § 3; 1985, ch. 82, § 122.

51-13-03. Finance charge limitation.

  1. A retail seller may contract for in a retail installment contract and charge, receive, and collect the finance charge computed on the principal balance of the contract or obligation from the date thereof until paid. A retail seller who complies with the disclosure provisions of this chapter is deemed a regulated lender under section 47-14-09.
  2. The finance charge must be computed on the amount financed as determined under subdivision c of subsection 2 of section 51-13-02. This finance charge may be precomputed on the amount financed calculated on the assumption that all scheduled payments will be paid when due and the effect of prepayment is governed by the provisions on rebate upon prepayment.
  3. When a retail installment contract provides for unequal or irregular installments, the finance charge must be at the effective rate provided in subsection 1, having due regard for the schedule of installments.
  4. The finance charge must be inclusive of all charges incident to investigating and making the contract, and for the extension of the credit provided for in the contract and no fee, expense, or other charge whatsoever may be taken, received, reserved, or contracted for except as provided in this section and in subdivision e of subsection 2 of section 51-13-02 and for those items expressly provided for in the retail installment contract as set forth in subdivision c of subsection 2 of section 51-13-02.

Source:

S.L. 1957, ch. 322, § 3; R.C. 1943, 1957 Supp., § 51-1303; S.L. 1959, ch. 352, § 1; 1979, ch. 517, § 4; 1979, ch. 518, § 2; 1981, ch. 91, § 42; 1981, ch. 498, § 1; 1991, ch. 54, § 6.

Cross-References.

Usury, civil liability, see § 47-14-10.

Notes to Decisions

Computation of Maximum Allowable Finance Charge.

Finance charges computed under subsection 3 at “the effective rate [of 7 percent], having due regard for the schedule of installments” may be determined at a seven percent “add-on” rate, i.e., the seller may add the finance charge to the principal amount which the buyer finances, yielding an annual percentage rate of return of about 12.9 percent. Mandan Supply v. Steckler, 244 N.W.2d 698, 1976 N.D. LEXIS 126 (N.D. 1976).

Disclosure of Finance Charges.

Retail installment contracts did not comply with the disclosure requirements of the Retail Installment Sales Act because a “loan fee” that was undisputedly a finance charge was not so disclosed in the amount identified as “finance charges.”Baker v. Autos, Inc., 2019 ND 82, 924 N.W.2d 441, 2019 N.D. LEXIS 81 (N.D. 2019).

“Due Regard for the Schedule of Installments”.

The “due regard for the schedule of installments” language of subsection 3 means that the seller must calculate its credit service charge based on the declining principal balance as installment payments are due and payable. Mandan Supply v. Steckler, 244 N.W.2d 698, 1976 N.D. LEXIS 126 (N.D. 1976).

“Effective Rate”.

The “effective rate” of return mentioned in subsection 3 is the resulting return which a lender receives for extending credit; it is the equivalent of the “actuarial rate” or the “annual percentage rate”. Mandan Supply v. Steckler, 244 N.W.2d 698, 1976 N.D. LEXIS 126 (N.D. 1976).

51-13-03.1. Payment to last-known holder.

Unless the buyer has notice of actual or intended assignment of a retail installment contract, payment made by the buyer to the last-known holder of the contract is binding upon all subsequent holders or assignees.

Source:

S.L. 1979, ch. 517, § 5.

51-13-03.2. Statement of unpaid balance.

Upon written request from the buyer, the holder of a retail installment contract shall give or forward to the buyer a written statement of the dates and amounts of payments and the total amount unpaid under the contract. A buyer must be given a written receipt for any payment when made in cash.

Source:

S.L. 1979, ch. 517, § 6.

51-13-04. Cancellation of contract.

After the payment of all sums for which the buyer is obligated under a retail installment contract, and upon written demand made by the buyer, the holder of such contract shall mail to the buyer at the buyer’s last-known address, good and sufficient instruments to indicate payment in full and to release all security in the personal property.

Source:

S.L. 1957, ch. 322, § 4; R.C. 1943, 1957 Supp., § 51-1304; S.L. 1959, ch. 352, § 1.

51-13-05. Prepayment of retail installment contract.

  1. At any time before maturity, a buyer may pay in full the remaining principal due on a retail installment contract and is entitled to a refund of finance charges as follows:
    1. The refund must be at least the finance charge paid in excess of that computed under the simple interest method, using the annual percentage rate disclosed under federal law to the nearest one-fourth of one percent.
    2. For a retail installment contract in which the amount financed is not more than ten thousand dollars, an acquisition cost of at most fifteen dollars may be deducted from the refund.
    3. For all retail installment contracts, a refund is not required if it is less than one dollar.
  2. Notwithstanding section 51-13-06.2, this section applies to retail installment contracts for agricultural purposes and to retail installment contracts for more than twenty-five thousand dollars.

Source:

S.L. 1957, ch. 322, § 5; R.C. 1943, 1957 Supp., § 51-1305; S.L. 1959, ch. 352, § 1; 1983, ch. 533, § 1; 1987, ch. 591, § 1; 1993, ch. 491, § 1.

51-13-06. Refinancing retail installment contracts. [Repealed]

Repealed by S.L. 1981, ch. 498, § 2.

51-13-06.1. Authority to purchase retail installment contracts.

Notwithstanding any contrary provision of law:

  1. A financing agency may purchase a retail installment contract from a seller on such terms and conditions and for such price as may be mutually agreed upon.
  2. No filing of the assignment, no notice to the buyer of the assignment, and no requirement that the seller be deprived of dominion over payments upon the contract or over the personal property if repossessed by the seller, shall be necessary to the validity of a written assignment of a retail installment contract as against creditors, subsequent purchasers, pledgees, mortgagees, or encumbrancers of the seller.

Source:

S.L. 1979, ch. 517, § 8.

51-13-06.2. Applicability.

No provision of this chapter applies to a retail installment sale of personal property if:

  1. The cash price of the personal property exceeds twenty-five thousand dollars; or
  2. The personal property is to be used primarily for a business, commercial, or agricultural purpose, not a personal, family, or household purpose.

Source:

S.L. 1979, ch. 517, § 9; 1979, ch. 518, § 1; 1983, ch. 534, § 1.

51-13-07. Enforcement — Powers — Remedies — Penalties.

Any person who willfully violates this chapter is guilty of a class A misdemeanor. A willful violation of section 51-13-02 or 51-13-03 by any person bars that person’s recovery of any finance charge or delinquency or collection charge on the retail installment contract involved. A state’s attorney or the attorney general may enforce this chapter. The attorney general in enforcing this chapter has all the powers provided in this chapter and chapter 51-15 and may seek all remedies in this chapter and chapter 51-15. A violation of this chapter constitutes a violation of chapter 51-15. The remedies, duties, prohibitions, and penalties of this chapter are not exclusive and are in addition to all other causes of action, remedies, and penalties in chapter 51-15, or otherwise provided by law.

Source:

S.L. 1957, ch. 322, § 7; R.C. 1943, 1957 Supp., § 51-1307; S.L. 1959, ch. 352, § 1; 1975, ch. 106, § 559; 1981, ch. 91, § 43; 1983, ch. 82, § 106; 2015, ch. 351, § 2, eff August 1, 2015.

Effective Date.

The 2015 amendment of this section by section 2 of chapter 351, S.L. 2015 became effective August 1, 2015.

51-13-08. Waiver.

Any waiver of the provisions of this chapter is unenforceable and void.

Source:

S.L. 1957, ch. 322, § 8; R.C. 1943, 1957 Supp., § 51-1308; S.L. 1959, ch. 352, § 1.

CHAPTER 51-14 Revolving Charge Accounts

51-14-01. Definitions.

In this chapter, unless the context otherwise requires:

  1. “Credit service charge” means the amount, however expressed, which the retail buyer contracts to pay or pays the retail seller in excess of the amount of credit extended, representing the total charges by the retail seller incident to investigating and extending credit under a revolving charge agreement and for extending to the retail buyer the privilege of paying over a period of time therefor.
  2. “Retail buyer” or “buyer” means a person who buys personal property from a retail seller, or to whom a retail seller otherwise extends credit, pursuant to a revolving charge agreement.
  3. “Retail seller” or “seller” means:
    1. A person that pursuant to a revolving charge agreement, agrees to sell or sells goods or services, other than medical services. The term does not include a medical services provider.
    2. A state-chartered or national bank that extends credit by the advancement of moneys or the payment for goods or services under a revolving charge agreement.
  4. “Revolving charge agreement” means a written instrument, defining the terms of credit extended from time to time under the terms of the agreement. Under the agreement, the buyer’s total unpaid balance, whenever incurred, is payable over a period of time and under the terms of which a credit service charge, other than the portion thereof consisting of late payment or other charges, is to be computed in relation to the buyer’s unpaid balance from time to time.

Source:

S.L. 1959, ch. 350, § 1; 1971, ch. 474, § 1; 1997, ch. 419, § 1; 2005, ch. 124, § 2.

Notes to Decisions

Revolving Charge Agreement Not Established.

In a case involving the default of promissory notes, summary judgment was properly granted in favor of an assignee because the notes, which were executed to finance crops, unambiguously constituted traditional loans of money since they used the terms “principal” and “interest,” rather than “credit extended” and “credit service charge”; therefore, they did not fall under the definition of revolving charge account agreements. AG Acceptance Corp. v. Glinz, 2004 ND 154, 684 N.W.2d 632, 2004 N.D. LEXIS 283 (N.D. 2004).

Collateral References.

Validity and construction of revolving charge account contract or plan, 41 A.L.R.3d 682.

What constitutes “finance charge” under § 106(a) of the Truth in Lending Act (15 UCSC § 1605 (a)) or applicable regulations, 154 A.L.R. Fed. 431.

51-14-02. Contents of revolving charge agreements — Requirements for delivery of monthly statements — Exception.

Every revolving charge agreement must be in writing and must be accepted by the retail buyer. As used in this section, “accepted” means the buyer has signed the revolving charge agreement, the buyer has used the account issued under a revolving charge agreement, or within thirty days from the date of issuance the buyer has not canceled by written notice a credit card or other access device issued under a revolving charge agreement. A copy of the revolving charge agreement must be delivered or mailed to the retail buyer by the retail seller before the date on which the first payment is due under the agreement. A revolving charge agreement must state the amount and rate of the credit service charge to be charged and paid under the agreement. The credit service charge, exclusive of late payment or other fees included therein, must be set forth in the revolving charge agreement in terms of a monthly or annual percentage rate to be applied to the balance outstanding from time to time under the agreement, as of the beginning or end of each billing period or on a daily basis. Upon written notice, a seller may change the terms of any revolving charge agreement, including the credit service charge, if this right of amendment has been reserved. A change under this authority is effective as to existing balances, if within twenty-five days of the effective date of the change, the buyer does not furnish written notice to the seller that the buyer does not agree to abide by the changes. Upon receipt of this written notice by the seller, the buyer has the remainder of the time under the existing terms in which to pay all sums owed to the seller. Any request for additional credit under a revolving charge agreement, including use of a credit card issued under the agreement, after the effective date of the change of terms, including a change in the credit service charge, is deemed to be an acceptance of the new terms, even though the twenty-five days has not expired. The retail seller under a revolving charge agreement shall promptly supply the retail buyer under the agreement with a statement as of the end of each monthly period or other regular period agreed upon by the retail seller and the retail buyer, in which there is any unpaid balance thereunder. Such statement must recite the following:

  1. The unpaid balance under the revolving charge agreement at the beginning or end of the period.
  2. An identification of the goods or services purchased, the cash purchase price and the date of each purchase, unless otherwise furnished by the retail seller to the retail buyer by sales slip, memorandum, or otherwise.
  3. The payments made by the retail buyer to the retail seller and any other credits to the retail buyer during the period.
  4. The amount of the credit service charge, if any, and also the percentage annual simple interest equivalent of this amount.
  5. A legend to the effect that the retail buyer may at any time pay the total indebtedness.

The items need not be stated in the sequence or order set forth in this section. Additional items may be included to explain the computations made in determining the amount to be paid by the retail buyer. If a revolving charge or credit account is also subject to the Truth in Lending Act [15 U.S.C. 1601-1667e], the seller may, instead of complying with this section, comply with all requirements of the Truth in Lending Act.

Source:

S.L. 1959, ch. 350, § 2; 1991, ch. 527, § 1; 1997, ch. 419, § 2.

Notes to Decisions

Interpretation

N.D.C.C. § 51-14-02 did not address unconscionability, nor did it give credit card companies carte blanche to impose upon cardholders whatever terms they desired, regardless of how unfair, one-sided, or oppressive they may be; the statute did not specifically authorize wholesale amendment of a credit card agreement by a sixteen-page bill stuffer, nor did it say all amendments to agreements complying with the statutory procedure were necessarily valid and enforceable. Strand v. U.S. Bank Nat'l Assoc. ND, 2005 ND 68, 693 N.W.2d 918, 2005 N.D. LEXIS 76 (N.D. 2005).

51-14-03. Limitation of credit service charge.

In a revolving charge agreement, a seller may contract for and, if so contracted for, the seller or holder of the agreement may charge, receive, and collect the service charge authorized by this section. The service charge may not exceed the amount agreed to by the parties. In the event any payment by a buyer is insufficient to pay both the credit service charge and that portion of the outstanding indebtedness then due, the payments must first be applied to the credit service charge then due.

Source:

S.L. 1959, ch. 350, § 3; 1995, ch. 476, § 1; 1997, ch. 419, § 3.

Cross-References.

Usury, civil liability, see § 47-14-10.

51-14-03.1. Additional charges on revolving charge accounts.

The seller or holder of a revolving charge account may collect a late payment or other charge not to exceed the amount agreed to by the parties in the revolving charge account agreement.

Source:

S.L. 1997, ch. 419, § 4.

51-14-03.2. Application of other provisions.

Credit extended by a seller or holder of a revolving charge agreement to a buyer is not subject to chapter 13-04.1 or 47-14.

Source:

S.L. 1997, ch. 419, § 5; 1999, ch. 50, § 69; 2009, ch. 141, § 9.

Effective Date.

The 2009 amendment of this section by section 9 of chapter 141, S.L. 2009 became effective August 1, 2009.

51-14-04. Scope of chapter — Effective date.

The service charge allowed in section 51-14-03 shall be allowed to a seller or holder only:

  1. If the seller enters into an agreement subject to the provisions of this chapter with any buyer on or after July 1, 1959; or
  2. In the case of any buyer who had entered into an agreement with a seller prior to July 1, 1959, if the seller or holder delivers or mails to the buyer a copy of a retail installment credit agreement in conformity with this chapter duly executed on behalf of the seller and the seller or holder thereafter complies with all the other provisions of this chapter.

Nothing in this section contained may be construed to affect the validity or invalidity of any agreement or alleged agreement made prior to July 1, 1959.

Source:

S.L. 1959, ch. 350, § 4.

51-14-05. Penalty.

Any person who violates any provision of this chapter is guilty of a class A misdemeanor. Any revolving charge account or any act in the making or collection of any revolving charge account which violates the provisions of this chapter shall result in the forfeiture of all credit service charges that have been paid or that may become due or payable thereunder, and in the event that such violation is willful, the retail seller shall have no right to collect, receive, or retain any principal, credit service charge, interest, or other charge whatsoever.

Source:

S.L. 1959, ch. 350, § 5; 1975, ch. 106, § 560.

CHAPTER 51-14.1 Credit Cards

51-14.1-01. Definition of credit cards and other terms and imposition of liability on cardholder.

In this chapter, unless the context otherwise requires:

  1. “Accepted credit card” means any credit card which the cardholder has requested in writing or has signed or has used, or authorized another to use, for the purpose of obtaining money, property, labor, or services on credit. A renewal credit card must be deemed to be accepted if it is issued within one year after a prior card has been paid for or used. A credit card issued in connection with a merger, acquisition, or the like of card issuers or credit card services in substitution for an accepted credit card must be deemed to be an accepted credit card.
  2. “Adequate notice” means a writing which is conspicuous and which is printed on the credit card or on each periodic statement.
  3. “Card issuer” means any person who issues a credit card.
  4. “Cardholder” means any person to whom a credit card is issued or any person who has agreed with the card issuer to pay obligations arising from the issuance of a credit card to another person.
  5. “Conspicuous” means any term or clause which is so written that a reasonable person against whom it is to operate ought to have noticed it.
  6. “Credit card” means any card, plate, coupon book, or other credit device existing for the purpose of obtaining money, property, labor, or services on credit.
  7. “Unauthorized use” means a use of a credit card by a person other than the cardholder who does not have actual, implied, or apparent authority for such use and from which the cardholder receives no benefit.

Source:

S.L. 1969, ch. 423, § 1.

Notes to Decisions

Accepted Credit Card.

Credit card was not an accepted credit card belonging to a corporation where the card was issued to the corporation upon an employee’s request and the corporation did not sign, use, or authorize the employee to request or use the card. Transamerica Ins. Co. v. Standard Oil Co., 325 N.W.2d 210, 1982 N.D. LEXIS 346 (N.D. 1982).

Unauthorized Use.

The test for determining unauthorized use is agency, with state agency law used to resolve the issue. Transamerica Ins. Co. v. Standard Oil Co., 325 N.W.2d 210, 1982 N.D. LEXIS 346 (N.D. 1982).

Card issuer was unable to rely upon the doctrine of ostensible authority when claiming that corporate cardholder’s employee was authorized to request and use the credit card where the issuer was negligent in issuing the card without independently verifying the employee’s authority. Transamerica Ins. Co. v. Standard Oil Co., 325 N.W.2d 210, 1982 N.D. LEXIS 346 (N.D. 1982).

Collateral References.

Liability of holder of credit card or plate for purchases made thereon by another person, 15 A.L.R.3d 1086.

Criminal liability for unauthorized use of credit card, 24 A.L.R.3d 986.

Limitation of actions, what statute of limitations governs action arising out of transaction consummated by use of credit card, 2 A.L.R.4th 677.

Credit card issuer’s liability under state laws for wrongful billing, cancellation, dishonor, or disclosure, 53 A.L.R.4th 231.

51-14.1-02. Liability of cardholder.

A provision imposing liability on a cardholder for the unauthorized use of a credit card is effective only if the card is an accepted credit card, the liability imposed is not in excess of one hundred dollars, the card issuer gives adequate notice to the cardholder of the potential liability, and the unauthorized use occurs before the cardholder has notified the card issuer of the loss or theft of the card or of any unauthorized use.

Except as hereinbefore provided, a cardholder incurs no liability from the unauthorized use of either an accepted or an unaccepted credit card.

Source:

S.L. 1969, ch. 423, § 1.

Collateral References.

Preemptive Effect of Truth in Lending Act (TILA). 61 A.L.R. Fed. 2d 505.

51-14.1-03. Acceptance of check not conditioned on disclosure of credit card number — Use of credit card for identification allowed.

A person may not require, as a condition of acceptance of a check or other draft, that the person presenting the check provide a credit card number; nor may the person accepting the check or other draft record the credit card number. A person may request the person presenting the check to display a credit card as evidence of creditworthiness or as additional identification; however, only information concerning the type and issuer of the credit card may be recorded.

Source:

S.L. 1991, ch. 528, § 1.

51-14.1-04. Use of credit card when issuer guarantees cardholder checks allowed.

Sections 51-14.1-03 through 51-14.1-05 do not prohibit a person from recording a credit card number as a condition for cashing or accepting the check or other draft when that person has agreed with the card issuer to cash or accept checks or other drafts from the issuer’s cardholders and the issuer guarantees cardholder checks or other drafts cashed or accepted by that person.

Source:

S.L. 1991, ch. 528, § 2.

51-14.1-05. Penalty.

Any person who violates any provision of sections 51-14.1-03 through 51-14.1-05 is guilty of an infraction.

Source:

S.L. 1991, ch. 528, § 3.

CHAPTER 51-15 Unlawful Sales or Advertising Practices

51-15-01. Definitions.

In this chapter, unless the context or subject matter otherwise requires:

  1. “Advertisement” includes the attempt by publication, dissemination, solicitation, or circulation, oral or written, to induce, directly or indirectly, any person to enter into any obligation or acquire any title or interest in any merchandise.
  2. “Attorney general” means the attorney general of North Dakota or the attorney general’s authorized delegate.
  3. “Merchandise” means any objects, wares, goods, commodities, intangibles, real estate, charitable contributions, or services.
  4. “Person” means any natural person or the person’s legal representative, partnership, corporation, limited liability company, company, trust, business entity, or association, and any agent, employee, salesman, partner, officer, director, member, stockholder, associate, trustee, or cestui que trust thereof.
  5. “Sale” means any charitable solicitation or any sale, offer for sale, or attempt to sell any merchandise for any consideration.

Source:

S.L. 1965, ch. 332, § 1; 1993, ch. 54, § 106; 2003, ch. 437, § 2.

Collateral References.

Consumer class actions based on fraud or misrepresentation, 53 A.L.R.3d 534.

Emotional distress: recovery by debtor, under tort of intentional or reckless infliction of emotional distress, for damages resulting from debt collection methods, 87 A.L.R.3d 201.

Who is a “consumer” entitled to protection of state deceptive trade practice and consumer protection acts, 63 A.L.R.5th 1.

Notes to Decisions

Dismissal.

Special master properly dismissed a husband’s claim under the Unlawful Sales or Advertising Practices Act because the complaint failed to allege any misrepresentations by a hospital in connection with the phlebotomy services performed on the husband’s wife. Krebsbach v. Trinity Hosps., Inc., 2020 ND 24, 938 N.W.2d 133, 2020 N.D. LEXIS 24 (N.D. 2020).

51-15-02. Unlawful practices — Fraud — Misrepresentation — Unconscionable.

The act, use, or employment by any person of any deceptive act or practice, fraud, false pretense, false promise, or misrepresentation, with the intent that others rely thereon in connection with the sale or advertisement of any merchandise, whether or not any person has in fact been misled, deceived, or damaged thereby, is declared to be an unlawful practice. The act, use, or employment by any person of any act or practice, in connection with the sale or advertisement of any merchandise, which is unconscionable or which causes or is likely to cause substantial injury to a person which is not reasonably avoidable by the injured person and not outweighed by countervailing benefits to consumers or to competition, is declared to be an unlawful practice.

Source:

S.L. 1965, ch. 332, § 2; 2015, ch. 350, § 2, eff August 1, 2015.

Effective Date.

The 2015 amendment of this section by section 2 of chapter 350, S.L. 2015 became effective August 1, 2015.

Notes to Decisions

Applicability.

In response to a certified question of law from a U.S. district court, the North Dakota Supreme Court concluded that North Dakota’s Consumer Fraud Act, N.D.C.C. ch. 51-15, may apply to a transaction in which a farmer, who purchased confection sunflower seed for use in cultivating a sunflower crop for subsequent sale, alleges the seed to be defective and claims it was marketed and sold in violation of the Act. Jorgenson v. Agway, Inc., 2001 ND 104, 627 N.W.2d 391, 2001 N.D. LEXIS 117 (N.D. 2001).

Provisions of the North Dakota Unlawful Sales or Advertising Practices Act creating a private cause of action were inapplicable in an action by a debtor’s customers against a creditor because statements made by the creditor to the debtor were not made to the customers, nor were they made in connection with the sale or advertisement of any merchandise by the debtor or creditor. Thimjon Farms P'ship v. First Int'l Bank & Trust, 2013 ND 160, 837 N.W.2d 327, 2013 N.D. LEXIS 162 (Sept. 6, 2013).

Because a USDA deregulation petition, earnings conference call, and a request form for a certificate issued by the Chinese government were not directed to defendant's purchasers, then plaintiffs did not state plausible North Dakota consumer protection claims that alleged misrepresentations contained therein were made in connection with the sale or advertisement of defendant's products. In re Syngenta AG MIR 162 Corn Litig., 131 F. Supp. 3d 1177, 2015 U.S. Dist. LEXIS 124087 (D. Kan. 2015).

Civil Action for Damages.

7 U.S.C.S. § 136v(b) of the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) preempted a farm corporation’s Consumer Fraud Act claims against a herbicide manufacturer pursuant to the Supremacy Clause of U.S. Const. art. VI, cl. 2, because N.D.C.C. § 51-15-02 clearly imposed a broader obligation than FIFRA’s requirement that labels not contain “false or misleading” statements, and N.D.C.C.§ 51-15-02 was not genuinely equivalent to FIFRA’s obligation under 7 U.S.C.S. § 136(q)(1)(A). DJ Coleman, Inc. v. Nufarm Ams., Inc., 693 F. Supp. 2d 1055, 2010 U.S. Dist. LEXIS 24707 (D.N.D. 2010).

Pleadings.

District court properly denied a homeowner’s request to amend the complaint on the ground of futility where she sought to add a claim of deceptive/fraudulent acts, she sought leave to amend without requesting additional discovery, a summary judgment motion had been docketed, and the allegations of the proposed amended complaint, with regard to a claim under N.D.C.C. § 51-15-02, were not supported by substantial evidence. Bakke v. Magi-Touch Carpet One Floor & Home, Inc., 2018 ND 273, 920 N.W.2d 726, 2018 N.D. LEXIS 264 (N.D. 2018).

Special master properly dismissed a husband’s claim under the Unlawful Sales or Advertising Practices Act because the complaint failed to allege any misrepresentations by a hospital in connection with the phlebotomy services performed on the husband’s wife. Krebsbach v. Trinity Hosps., Inc., 2020 ND 24, 938 N.W.2d 133, 2020 N.D. LEXIS 24 (N.D. 2020).

Standard of Proof.

When an action brought under N.D.C.C.ch. 51-12 or this chapter is based upon allegations of fraudulent conduct, the “clear and convincing evidence” standard does not apply; the alleged fraudulent conduct must be proved by a preponderance of the evidence. State ex rel. Spaeth v. Eddy Furniture Co., 386 N.W.2d 901, 1986 N.D. LEXIS 317 (N.D. 1986).

Collateral References.

What constitutes “fraudulent” or “unconscionable” agreement or conduct within meaning of state consumer credit protection act, 42 A.L.R.4th 293.

Law Reviews.

Consumer Protection in North Dakota, 49 N.D. L. Rev. 543 (1973).

51-15-02.1. Use of check endorsements for advertising obligations prohibited.

It is a deceptive act or practice in violation of this chapter for a person to offer, through the mail or by other means, a check that contains an obligation to advertise with a person upon the endorsement of a check.

Source:

S.L. 2007, ch. 434, § 1.

Effective Date.

This section became effective April 5, 2007, pursuant to an emergency clause in section 3 of chapter 434, S.L. 2007.

51-15-02.2. Solicitation of payment by bill, invoice, or statement of account due.

It is a deceptive act or practice in violation of this chapter for a person to send, deliver, or transmit a bill, an invoice, or a statement of account due, or a writing that could reasonably be interpreted as a bill, an invoice, or a statement of account due, to solicit payment of money by another person for goods not yet ordered or for services not yet performed and not yet ordered.

Source:

S.L. 2007, ch. 434, § 2.

Effective Date.

This section became effective April 5, 2007, pursuant to an emergency clause in section 3 of chapter 434, S.L. 2007.

51-15-02.3. Facilitating and assisting.

It is a deceptive act or practice in violation of this chapter for any person to provide assistance or support to any person engaged in any act or practice in violation of this chapter when the person providing assistance or support knows or consciously avoids knowing that the other person is engaged in an act or practice in violation of this chapter. This section does not authorize a private claim for relief for a violation of this section and no entity other than the attorney general may enforce this section.

Source:

S.L. 2007, ch. 435, § 1.

Effective Date.

This section became effective April 27, 2007, pursuant to an emergency clause in section 3 of chapter 435, S.L. 2007.

51-15-03. Advertising media excluded.

Nothing herein contained applies to the owner or publisher of newspapers, magazines, publication of printed matter wherein such advertisement appears, or to the owner or operator of a radio or television station which disseminates such advertisement when the owner, publisher, or operator has no knowledge of the intent, design, or purpose of the advertiser.

Source:

S.L. 1965, ch. 332, § 3.

51-15-04. Powers of attorney general.

When it appears to the attorney general that a person has engaged in, or is engaging in, any practice declared to be unlawful by this chapter or by other provisions of law, including chapter 50-22, 51-12, 51-13, 51-14, 51-16.1, or 51-18, or when the attorney general believes it to be in the public interest to investigate whether a person in fact has engaged in, is engaging in, or is about to engage in, any unlawful practice under this chapter or other provisions of law, including chapter 50-22, 51-12, 51-13, 51-14, 51-16.1, or 51-18, the attorney general may:

  1. Require that person to file, on forms the attorney general prescribes, a statement or report in writing, under oath or otherwise, of all the facts and circumstances concerning the sale or advertisement of merchandise by that person, as well as other data and information the attorney general may determine necessary.
  2. Examine under oath any person in connection with the sale or advertisement of any merchandise.
  3. Examine any merchandise or sample thereof, record, book, document, account, or paper as the attorney general may determine necessary.
  4. Pursuant to an order of a district court impound any merchandise or sample thereof, record, book, document, account, or paper material to that practice and retain the same in the attorney general’s possession until the completion of all proceedings undertaken under this section or in the courts.

Source:

S.L. 1965, ch. 332, § 4; 1991, ch. 532, § 1; 2003, ch. 437, § 3.

Notes to Decisions

Authority to Investigate.

Where a corporation engaged in an unlawful check solicitation marketing scheme and had reached a stipulated settlement agreement with the Federal Trade Commission, over which an Arizona district court retained jurisdiction to interpret, modify, or enforce and to punish violations, the Attorney General of North Dakota nevertheless had the power under N.D.C.C. ch. 51-15 to investigate whether the corporation’s marketing practices violated North Dakota law, and the state district court had jurisdiction over proceedings brought by the attorney general; furthermore, North Dakota’s state consumer protection laws were not preempted by the stipulated judgment. State ex rel. Stenehjem v. Simple.net, Inc., 2009 ND 80, 765 N.W.2d 506, 2009 N.D. LEXIS 85 (N.D. 2009).

51-15-05. Subpoena — Hearing — Rules.

To accomplish the objectives and to carry out the duties prescribed by this chapter or by other provisions of law, including chapter 50-22, 51-12, 51-13, 51-14, 51-16.1, or 51-18, the attorney general, in addition to other powers conferred upon the attorney general by this chapter, may issue subpoenas to any person, administer an oath or affirmation to any person, conduct hearings in aid of any investigation or inquiry, and prescribe forms and adopt rules as may be necessary.

Source:

S.L. 1965, ch. 332, § 5; 1991, ch. 532, § 2; 2003, ch. 437, § 4.

Notes to Decisions

Authority to Investigate.

Where a corporation engaged in an unlawful check solicitation marketing scheme and had reached a stipulated settlement agreement with the Federal Trade Commission, over which an Arizona district court retained jurisdiction to interpret, modify, or enforce and to punish violations, the Attorney General of North Dakota nevertheless had the power under N.D.C.C. ch. 51-15 to investigate whether the corporation’s marketing practices violated North Dakota law, and the state district court had jurisdiction over proceedings brought by the attorney general; furthermore, North Dakota’s state consumer protection laws were not preempted by the stipulated judgment. State ex rel. Stenehjem v. Simple.net, Inc., 2009 ND 80, 765 N.W.2d 506, 2009 N.D. LEXIS 85 (N.D. 2009).

51-15-06. Failure to supply information or obey subpoena.

If any person fails or refuses to file any statement or report, or obey any subpoena issued by the attorney general, the attorney general may, after notice, apply to a district court and, after hearing thereon, request an order:

  1. Granting injunctive relief, restraining the sale or advertisement of any merchandise by such persons;
  2. Vacating, annulling, or suspending the charter of a for-profit or nonprofit corporation or limited liability company created by or under the laws of this state or revoking or suspending the certificate of authority to do business in this state of a foreign corporation or limited liability company or revoking or suspending any other licenses, permits, or certificates issued pursuant to law to such person which are used to further the allegedly unlawful practice; and
  3. Granting such other relief as may be required;

until the person files the statement or obeys the subpoena.

Source:

S.L. 1965, ch. 332, § 6; 1993, ch. 54, § 106; 2003, ch. 437, § 5.

Notes to Decisions

Authority to Investigate.

Where a corporation engaged in an unlawful check solicitation marketing scheme and had reached a stipulated settlement agreement with the Federal Trade Commission, over which an Arizona district court retained jurisdiction to interpret, modify, or enforce and to punish violations, the Attorney General of North Dakota nevertheless had the power under N.D.C.C. ch. 51-15 to investigate whether the corporation’s marketing practices violated North Dakota law, and the state district court had jurisdiction over proceedings brought by the attorney general; furthermore, North Dakota’s state consumer protection laws were not preempted by the stipulated judgment. State ex rel. Stenehjem v. Simple.net, Inc., 2009 ND 80, 765 N.W.2d 506, 2009 N.D. LEXIS 85 (N.D. 2009).

51-15-06.1. Assurance of voluntary compliance.

The attorney general may accept an assurance of voluntary compliance for any act or practice the attorney general determines to be in violation of this chapter, or other provisions of law, including chapter 50-22, 51-12, 51-13, 51-14, 51-16.1, 51-18, 51-28, 51-29, 51-30, 51-31, 51-33, or 51-34, from any person the attorney general alleges is engaging in, or has engaged in, the act or practice. The assurance of voluntary compliance must be in writing and must be filed with and is subject to the approval of the district court of the county in which the alleged violator resides or has as a principal place of business, conducts business, or in Burleigh County. Failure to comply with an assurance of voluntary compliance which has been approved by the district court is contempt of court.

Source:

S.L. 1979, ch. 519, § 1; 1991, ch. 532, § 3; 1993, ch. 89, § 30; 2003, ch. 437, § 6; 2013, ch. 389, § 3.

Effective Date.

The 2013 amendment of this section by section 3 of chapter 389, S.L. 2013 became effective August 1, 2013.

51-15-07. Remedies — Injunction — Other relief — Receiver — Cease and desist orders — Civil penalties — Costs recoverable in adjudicative proceedings.

Whenever it appears to the attorney general that a person has engaged in, or is engaging in, any practice declared to be unlawful by this chapter, or by other provisions of law, including chapter 50-22, 51-13, 51-14, 51-16.1, or 51-18, the attorney general may seek and obtain in an action in a district court an injunction prohibiting that person from continuing the unlawful practice or engaging in the unlawful practice or doing any act in furtherance of the unlawful practice after appropriate notice to that person. The notice must state generally the relief sought and be served at least ten days before the hearing of the action. The court may make an order or judgment as may be necessary to prevent the use or employment by a person of any unlawful practices, or which may be necessary to restore to any person in interest any money, or property that may have been acquired by means of any practice in this chapter, or in other provisions of law, including chapter 50-22, 51-13, 51-14, 51-16.1, or 51-18, declared to be unlawful, including the appointment of a receiver.

When it appears to the attorney general that a person has engaged in, or is engaging in, a practice declared to be unlawful by this chapter, or by other provisions of law, including chapter 50-22, 51-13, 51-14, 51-16.1, or 51-18, and that the person is about to conceal assets or oneself or leave the state, the attorney general may apply to the district court, ex parte, for an order appointing a receiver of the assets of that person. Upon a showing made by affidavit or other evidence that the person has engaged in, or is engaging in, a practice declared to be unlawful by this chapter and that the person is about to conceal assets or oneself or leave the state, the court shall order the appointment of a receiver to receive the assets of the person.

When it appears to the attorney general that a person has engaged in, or is engaging in, a practice declared to be unlawful by this chapter, or by other provisions of law, including chapter 50-22, 51-12, 51-13, 51-14, 51-16.1, or 51-18, or by an order of the attorney general issued under this chapter, the attorney general, without notice and hearing, may issue any cease and desist order, which the attorney general deems necessary or appropriate in the public interest, including if a person fails or refuses to file a statement or report, or to obey a subpoena issued by the attorney general under this chapter, or under other provisions of law, including chapter 50-22, 51-12, 51-13, 51-14, 51-16.1, or 51-18. In addition to any other remedy authorized by this chapter, or by other provisions of law, including chapter 50-22, 51-12, 51-13, 51-14, 51-16.1, or 51-18, the attorney general may impose by order and collect a civil penalty against a person found in an adjudicative proceeding to have violated a cease and desist order issued pursuant to this section, in an amount not more than one thousand dollars for each violation. The attorney general may bring an action in district court to recover penalties under this section. A person aggrieved by an order issued under this section may request a hearing before the attorney general if a written request is made within ten days after the receipt of the order. An adjudicative proceeding under this section must be conducted in accordance with chapter 28-32, unless otherwise specifically provided herein. If the attorney general prevails in an adjudicative proceeding pursuant to this section, the attorney general may assess the nonprevailing person for all adjudicative proceeding and hearing costs, including reasonable attorney’s fees, investigation fees, costs, and expenses of any investigation and action.

Source:

S.L. 1965, ch. 332, § 7; 1991, ch. 532, § 4; 2003, ch. 437, § 7.

51-15-08. Powers of receiver.

When a receiver is appointed by the court pursuant to this chapter, the receiver may sue for, collect, receive, or take into possession all the goods and chattels, rights and credits, moneys and effects, lands and tenements, books, records, documents, papers, choses in action, bills, notes, and property of every description, derived by means of any practice declared to be unlawful by this chapter, or by other provisions of law, including chapter 50-22, 51-12, 51-13, 51-14, 51-16.1, or 51-18, including property with which the property has been commingled if it cannot be identified in kind because of the commingling, and sell, convey, and assign the property and hold and dispose of the proceeds under the direction of the court. Any person who has suffered damages as a result of the use or employment of any unlawful practices and submits proof to the satisfaction of the court that that person has in fact been damaged may participate with general creditors in the distribution of the assets to the extent that person has sustained out-of-pocket losses. The court has jurisdiction of all questions arising in these proceedings and may make orders and judgments therein as may be required.

Source:

S.L. 1965, ch. 332, § 8; 1991, ch. 532, § 5; 2003, ch. 437, § 8.

51-15-09. Claims not barred.

Except as provided in section 51-15-02.3, this chapter does not bar any claim for relief by any person against any person who has acquired any moneys or property by means of any practice declared to be unlawful in this chapter. If the court finds the defendant knowingly committed the conduct, the court may order that the person commencing the action recover up to three times the actual damages proven and the court must order that the person commencing the action recover costs, disbursements, and actual reasonable attorney’s fees incurred in the action.

Source:

S.L. 1965, ch. 332, § 9; 1991, ch. 529, § 1; 2007, ch. 435, § 2.

Effective Date.

The 2007 amendment of this section by section 2 of chapter 435, S.L. 2007 became effective April 27, 2007, pursuant to an emergency clause in section 3 of chapter 435, S.L. 2007.

Notes to Decisions

Action by Attorney Against Competitor.

Plain language of N.D.C.C. § 51-15-09 allows an action by an attorney against a competitor for alleged unlawful practices under N.D.C.C. ch. 51-15 and incorporates standing jurisprudence requiring plaintiff to show the putatively illegal action caused some threatened or actual injury to his or her legal rights and interests. Ackre v. Chapman & Chapman, P.C., 2010 ND 167, 788 N.W.2d 344, 2010 N.D. LEXIS 172 (N.D. 2010).

51-15-10. Costs recoverable.

In any action brought under the provisions of this chapter, or under other provisions of law, including chapter 50-22, 51-12, 51-13, 51-14, 51-16.1, or 51-18, the court shall award to the attorney general reasonable attorney’s fees, investigation fees, costs, and expenses of any investigation and action brought under this chapter, or under other provisions of law, including chapter 50-22, 51-12, 51-13, 51-14, 51-16.1, or 51-18. All attorney’s fees, investigation fees, costs, and expenses received by the attorney general under this section must be deposited into the attorney general refund fund.

Source:

S.L. 1965, ch. 332, § 10; 1979, ch. 519, § 3; 1991, ch. 551, § 1; 2003, ch. 437, § 9.

51-15-11. Civil penalties.

The court may assess for the benefit of the state a civil penalty of not more than five thousand dollars for each violation of this chapter or for each violation of chapter 51-12, 51-13, 51-14, or 51-18. The penalty provided in this section is in addition to those remedies otherwise provided by this chapter or by chapter 50-22, 51-12, 51-13, 51-14, 51-16.1, or 51-18.

Source:

S.L. 1979, ch. 519, § 2; 1991, ch. 532, § 6; 2003, ch. 437, § 10.

51-15-12. Limitation of actions.

Notwithstanding chapter 28-01, an action for relief under this chapter is barred if the claim is not commenced within four years after the claim for relief accrues. The period of limitation for a claim for relief may not be deemed to have accrued until the aggrieved party discovers the facts constituting the violation of this chapter.

Source:

S.L. 2021, ch. 382, § 3, eff April 9, 2021.

CHAPTER 51-16 Multilevel Distributorships and Chain Sales Schemes [Repealed]

[Repealed by S.L 1987, ch. 592, § 2]

CHAPTER 51-16.1 Pyramid Promotional and Referral Sales Schemes

51-16.1-01. Definitions.

As used in this chapter, unless the context or subject matter otherwise requires:

  1. “Compensation” includes a payment based on a sale or distribution made to a person who either is a participant in a pyramid promotional scheme or has the right to become a participant upon payment.
  2. “Consideration” means the payment of cash or the purchase of goods, services, or intangible property but does not include:
    1. The purchase of goods or services furnished at cost to be used in making sales and not for resale; or
    2. Time and effort spent in pursuit of sales or recruiting activities.
  3. “Pyramid promotional scheme” means any plan or operation by which a participant gives consideration for the opportunity to receive compensation which is derived primarily from any person’s introduction of other persons into participation in the plan or operation rather than from the sale of goods, services, or intangible property by the participant or other persons introduced into the plan or operation.

Source:

S.L. 1987, ch. 592, § 1.

Cross-References.

Home solicitation sales, rebates or discounts for referrals prohibited, see § 51-18-03.

Collateral References.

Enforceability of transactions entered into pursuant to referral sales arrangement, 14 A.L.R.3d 1420.

Validity of pyramid distribution plan, 54 A.L.R.3d 217.

Practices Forbidden by State Deceptive Trade Practice and Consumer Protection Acts — Pyramid or Ponzi or Referral Sales Schemes. 48 A.L.R.6th 511.

51-16.1-02. Pyramid promotional schemes prohibited — Defenses excluded.

  1. No person may establish, operate, advertise, or promote a pyramid promotional scheme.
  2. It is not a defense to a criminal or civil prosecution under this section that:
    1. The plan contains a limitation as to the number of persons who may participate or the presence of additional conditions affecting eligibility for the opportunity to receive compensation under the plan or operation; or
    2. A participant, on giving consideration, obtains any goods, services, or intangible property in addition to the right to receive compensation.

Source:

S.L. 1987, ch. 592, § 1.

51-16.1-03. Referral selling prohibited.

No seller or lessor may give or offer a rebate, discount, or anything of value to a buyer or lessee as an inducement for a sale or lease in consideration of the buyer or lessee giving to the seller or lessor the names of prospective purchasers or lessees, or otherwise aiding the seller or lessor in making a sale to another person, if the earning of the rebate, discount, or other thing of value is contingent upon the occurrence of an event subsequent to the time the buyer or lessee agrees to the sale or lease.

Source:

S.L. 1987, ch. 592, § 1.

51-16.1-04. Penalty — Civil remedies.

Any person, including the officers and directors of any company, violating any of the provisions of this chapter is:

  1. Guilty of a class A misdemeanor, but a person who has been previously convicted of a class A misdemeanor under this chapter may be charged with and convicted of a class C felony for any violation which occurs after the previous conviction;
  2. Deemed to have committed an unlawful practice in violation of section 51-15-02 and subject to all provisions, procedures, and penalties of chapter 51-15; and
  3. Notwithstanding any agreement to the contrary, subject to the right of any purchaser in a pyramid promotional scheme or referral selling scheme to declare the sale or contract void and also subject to an action in a court of competent jurisdiction by any purchaser to recover three times the damages sustained by the purchaser in participating in the scheme, plus reasonable attorney’s fees and costs.

Source:

S.L. 1987, ch. 592, § 1.

Collateral References.

Practices Forbidden by State Deceptive Trade Practice and Consumer Protection Acts — Pyramid or Ponzi or Referral Sales Schemes. 48 A.L.R.6th 511.

51-16.1-05. Scope of remedies.

  1. The rights and remedies that this chapter grants to purchasers in pyramid promotional schemes and referral selling schemes are independent of and supplemental to any other right or remedy available to them in law or equity, and nothing contained herein may be construed to diminish or to abrogate any such right or remedy.
  2. The provisions of this chapter are in addition to all other causes of action, remedies, and penalties available to the state or any of its governmental agencies.

Source:

S.L. 1987, ch. 592, § 1.

Collateral References.

Practices Forbidden by State Deceptive Trade Practice and Consumer Protection Acts — Pyramid or Ponzi or Referral Sales Schemes. 48 A.L.R.6th 511.

CHAPTER 51-17 Sale of Checks Act [Repealed]

[Repealed by S.L. 2005, ch. 128, § 3]

CHAPTER 51-17.1 Currency Exchange Businesses

51-17.1-01. Currency exchange — Penalty.

  1. A nonbanking institution may engage in the business of a currency exchange if:
    1. The institution does not contract with another person to manage the currency exchange business; however, this does not prohibit the business from employing individuals to operate a currency exchange business;
    2. The institution displays in a prominent manner on the premises of the business the fees charged to exchange currency;
    3. The maximum fees charged to exchange currency are limited to any direct cost of verification fees and:
      1. The greater of five percent of the face amount or five dollars, for cashing a draft, personal check, payroll check, traveler’s check, or money order; and
      2. The greater of three percent of the face amount or five dollars, for cashing a state public assistance check or a federal social security check;
    4. The institution does not accept money or currency for deposit or act as bailee or agent of persons to hold money or currency in escrow for others for any purpose; and
    5. The institution does not exchange currency on the premises of a charitable gaming site.
  2. For purposes of this section, “currency exchange” means cashing a check, draft, money order, or traveler’s check or issuing a money order or traveler’s check as an agent for another, for a fee. The term does not include providing these services incidental to a primary business if there is not a charge for cashing a check or draft.
  3. This section does not authorize a business to make any type of loan, including a deferred presentment service transaction, payday loan, cash advance, payday cash advance, or motor vehicle title loan.
  4. A nonbanking institution may not accept a postdated check in a currency exchange transaction.
  5. A person violating this section is guilty of a class B misdemeanor.

Source:

S.L. 2001, ch. 444, § 1.

CHAPTER 51-18 Regulation of Home Solicitation Sales

51-18-01. Definitions.

In this chapter, unless the context otherwise requires:

  1. “Consumer goods or services” means goods or services purchased, leased, or rented primarily for personal, family, or household purposes, including courses of instruction or training regardless of the purpose for which they are taken.
  2. “Person” includes a corporation, limited liability company, company, partnership, firm, association, or society, as well as a natural person. When the word “person” is used to designate the party whose property may be the subject of a criminal or public offense, the term includes the United States, this state, or any territory, state, or country, or any political subdivision of this state which may lawfully own any property, or a public or private corporation, limited liability company, or partnership or association. When the word “person” is used to designate the violator or offender of any law, it includes corporation, limited liability company, partnership, or any association of persons.
  3. “Personal solicitation sale” means a sale, lease, or rental of consumer goods or services in which the seller or the seller’s representative solicits the sale, lease, or rental, by telephone or in person, and the buyer’s agreement or offer to purchase is made at a place other than the place of business of the person soliciting the same and that agreement or offer to purchase is there given to the seller or the seller’s representative. A transaction is not a personal solicitation sale if it is made pursuant to prior negotiations between the parties at a business establishment at a fixed location where goods or services are offered or exhibited for sale, lease, or rental.
  4. “Seller” means a person who makes a personal solicitation sale.
  5. “Seller’s representative” means a person who makes a personal solicitation sale on behalf of a seller.
  6. “Telepromoter” means any person who, individually, through salespersons or agents, or through the use of an automatic dialing-announcing device initiates telephone contact with a consumer or who by written notice requests that the consumer contact the person by telephone and who represents one or more of the following:
    1. That if the consumer buys one or more items from the telepromoter, the consumer will also receive additional or other items, whether or not of the same type as purchased, without further cost or at a cost which the seller states or implies is less than the regular price of those items.
    2. That a consumer will receive a prize, premium, or gift if the telepromoter also encourages the consumer to do either of the following:
      1. Purchase or rent any goods or services.
      2. Pay any money, including a delivery or handling charge.
    3. That the consumer has in any manner been specially selected to receive the written notice or the offer contained in the written notice.

The term does not include any nonprofit or charitable organization exempt from federal taxation under section 501(c)(3) of the United States Internal Revenue Code [26 U.S.C. 501(c)(3)].

Source:

S.L. 1973, ch. 390, § 1; 1977, ch. 457, §§ 1, 2; 1979, ch. 520, § 1; 1991, ch. 532, § 7; 1993, ch. 54, § 106; 2005, ch. 443, § 2.

Collateral References.

Privacy, unsolicited mailing, distribution, house call, or telephone call as invasion of privacy, 56 A.L.R.3d 457.

What constitutes “finance charge” under applicable § 106(a) of the Truth in Lending Act (15 USCS § 1605(a)) or applicable regulations, 154 A.L.R. Fed. 431.

Validity, construction, and application of state statute or law pertaining to telephone solicitation, 44 A.L.R.5th 619.

51-18-02. Cancellation period — Method of cancellation — Intent.

  1. In addition to any right otherwise to revoke an offer, the buyer may cancel a personal solicitation sale until midnight of the third business day after the day on which the buyer signs an agreement that complies with this chapter. A buyer sixty-five years of age or older may cancel a personal solicitation sale of a product with a purchase price greater than fifty dollars until midnight of the fifteenth business day after the day on which the buyer enters into an enforceable agreement subject to this chapter or must be provided a written agreement that meets the requirements of section 51-18-04. In addition to other requirements of this chapter, the seller shall orally inform the buyer, at the time the transaction is entered into, of the buyer’s right to cancel.
  2. Cancellation occurs when the buyer gives written notice of cancellation to the seller at the address or electronic mail address specified for notice of cancellation provided by the seller by any of the following methods:
    1. Delivering written notice to the seller.
    2. Mailing written notice to the seller.
    3. Sending an electronic mail message to the seller.
  3. Notice of cancellation given by the buyer is effective if it indicates the intention on the part of the buyer not to be bound by the personal solicitation sale.

Source:

S.L. 1973, ch. 390, § 2; 1977, ch. 457, § 3; 1979, ch. 520, § 2; 1991, ch. 530, § 1; 1991, ch. 531, § 1; 2015, ch. 350, § 3, eff August 1, 2015.

Effective Date.

The 2015 amendment of this section by section 3 of chapter 350, S.L. 2015 became effective August 1, 2015.

51-18-03. Referral sales — Rebate or discount violations.

No seller in a personal solicitation sale may offer to pay a commission or give a rebate or discount to the buyer in consideration of the buyer’s giving to the seller the names of prospective purchasers or otherwise aiding the seller in making a sale to another person, if the earning of the commission, rebate, or discount is contingent upon an event that is to happen subsequent to the time the buyer agrees to buy. Any sale made in respect to which a commission, rebate, or discount is offered in violation of this chapter is voidable at the option of the buyer.

Source:

S.L. 1973, ch. 390, § 3; 1977, ch. 457, § 4; 1979, ch. 520, § 3.

Cross-References.

Pyramid promotional and referral sales schemes, see chapter 51-16.1.

Collateral References.

Enforceability of transaction entered into pursuant to referral sales arrangement, 14 A.L.R.3d 1420.

51-18-04. Agreement requirement.

No agreement of the buyer in a personal solicitation sale is enforceable unless it is in writing, dated, contains the signature of the buyer, and contains a conspicuous notice in substantially the following form:

NOTICE TO BUYER

  1. Do not sign this agreement if any of the spaces intended for the agreed terms to the extent of then available information are left blank.
  2. You are entitled to a copy of this agreement at the time you sign it.
  3. You may pay off the full unpaid balance due under this agreement at any time, and in so doing you may receive a full rebate of the unearned finance and insurance charges.
  4. You may cancel this transaction at any time prior to midnight of the third business day after the date of this transaction. See the attached notice of cancellation form for an explanation of this right.
  5. The seller cannot enter your premises unlawfully or commit any breach of the peace to repossess goods purchased under this agreement.
  6. To cancel this transaction, mail or deliver a signed and dated copy of this cancellation notice or any other written notice, or send an electronic mail message to (electronic mail address of seller), to (name of seller), at (address of seller's place of business) not later than midnight of (date).

The agreement must also have attached the following completed form, in duplicate:

NOTICE OF CANCELLATION

(Enter date of transaction)

Click to view

1. You may cancel this transaction, without any penalty or obligation, within three business days from the above date.

2. If you cancel, any property traded in, any payments made by you under the contract or sale, and any negotiable instrument executed by you will be returned within ten business days following receipt by the seller of your cancellation notice, and any security interest arising out of the transaction will be canceled.

3. If you cancel, you must make available to the seller at your residence, in substantially as good condition as when received, any goods delivered to you under this contract or sale; or you may, if you wish, comply with the instructions of the seller regarding the return shipment of the goods at the seller’s expense and risk.

4. If you do make the goods available to the seller and the seller does not pick them up within twenty days of the date of your notice of cancellation, you may retain or dispose of the goods without any further obligation. If you fail to make the goods available to the seller, or if you agree to return the goods to the seller and fail to do so, then you remain liable for performance of all obligations under the contract.

5. Buyer acknowledges receiving an oral notification that the buyer may cancel this transaction at any time before midnight of the third business day after the date of this transaction or fifteen business days if the buyer is sixty-five years of age or older.

(Date) (Buyer’s signature)

Click to view

(Date) (Buyer’s signature)

Click to view

If the buyer is sixty-five years of age or older, and the purchase price of the product is greater than fifty dollars, the agreement required by this chapter must either state that the buyer may cancel the agreement within fifteen business days in accordance with this chapter, or state in a conspicuous manner that if the buyer is not satisfied with the product for any reason, the buyer may contact the seller within a period of not less than thirty days from the date of purchase for a full refund of the purchase price, if the product has not been intentionally damaged or misused.

Source:

S.L. 1973, ch. 390, § 4; 1977, ch. 457, § 5; 1979, ch. 520, § 4; 1991, ch. 530, § 2; 2015, ch. 350, § 4, eff August 1, 2015.

Effective Date.

The 2015 amendment of this section by section 4 of chapter 350, S.L. 2015 became effective August 1, 2015.

51-18-04.1. Notice to consumer — Contract requirement for sales by telepromoter.

In addition to the requirements of section 51-18-04, an agreement by a consumer to obtain a consumer good or service from a telepromoter, seller, or seller’s representative is not enforceable unless it contains the following information:

  1. The name, address, and telephone number of the telepromoter, seller, or seller’s representative;
  2. A statement of the price or fee, including any handling, shipping, delivery, or other charge being requested;
  3. A detailed description of the consumer good or service; and
  4. In a type size in a minimum of twelve points, in a space immediately preceding the space allotted for the consumer signature, the statement: “YOU ARE NOT OBLIGATED TO PAY ANY MONEY UNLESS YOU SIGN THIS CONTRACT AND RETURN IT TO THE SELLER.”

Source:

S.L. 1991, ch. 532, § 8; 1993, ch. 45, § 18; 2015, ch. 350, § 5, eff August 1, 2015.

Effective Date.

The 2015 amendment of this section by section 5 of chapter 350, S.L. 2015 became effective August 1, 2015.

51-18-04.2. Credit card charges.

A telepromoter, seller, or seller’s representative, in a personal solicitation sale, may not make or submit any charge to the consumer’s credit card or bank account, or otherwise solicit or accept any advance payment, until the telepromoter, seller, or seller’s representative has received from the consumer an original copy of a contract that complies with this section.

Source:

S.L. 1991, ch. 532, § 9; 2005, ch. 443, § 3.

51-18-04.3. Agreement by telepromoter or seller in violation of chapter void.

Any agreement for sale, lease, or rental of a consumer good or service in a personal solicitation sale by a telepromoter, seller, or seller’s representative in violation of this chapter is unenforceable and void.

Source:

S.L. 1991, ch. 532, § 10; 2005, ch. 443, § 4.

51-18-05. Evidence of indebtedness.

  1. A note or other evidence of indebtedness given by a buyer in respect of a personal solicitation sale must be dated not earlier than the date of the agreement or offer to purchase. Any transfer of a note or other evidence of indebtedness bearing the statement required by subsection 2 must be deemed an assignment only and any right, title, or interest which the transferee may acquire thereby is subject to all claims and defenses of the buyer against the seller pursuant to this chapter.
  2. Each note or other evidence of indebtedness given by a buyer in respect of a personal solicitation sale must bear on its face a conspicuous statement as follows: “This instrument is based upon a personal solicitation sale, which is subject to the provisions of the North Dakota Century Code. This instrument is not negotiable.”
  3. Compliance with the requirements of this section is a condition precedent to any claim for relief by the seller or any transferee of an instrument bearing the statement required under subsection 2 against the buyer upon such instrument and must be pleaded and proved by any person who may institute an action or suit against a buyer in respect thereof.

Source:

S.L. 1973, ch. 390, § 5; 1977, ch. 457, § 6; 1979, ch. 520, § 5; 1985, ch. 82, § 123.

51-18-06. Time limitation — Disposition of goods.

  1. Except as provided in this section, within ten days after a personal solicitation sale has been canceled, the seller shall tender to the buyer any payments made by the buyer and any note or other evidence of indebtedness and shall take any action necessary to promptly terminate any security interest created in the transaction.
  2. If the downpayment includes goods traded in, the goods must be tendered in substantially as good condition as when received. If the seller fails to tender the goods as provided by this section, the buyer may elect to recover an amount equal to the trade-in allowance stated in the agreement.
  3. The buyer may retain possession of goods delivered to the buyer by the seller and has a lien on the goods for any recovery to which the buyer is entitled until the seller has complied with the obligations imposed by this section.

Source:

S.L. 1973, ch. 390, § 6; 1977, ch. 457, § 7; 1979, ch. 520, § 6.

51-18-07. Buyer responsibility — Services.

  1. Except as provided in subsection 3 of section 51-18-05, within twenty days after a personal solicitation sale has been canceled, the buyer upon demand shall tender to the seller any goods delivered by the seller pursuant to the sale, but the buyer is not obligated to tender at any place other than the buyer’s own address. If the seller fails to take possession of such goods within twenty days after cancellation, the goods become the property of the buyer without obligation to pay for them.
  2. The buyer shall take reasonable care of the goods in the buyer’s possession both prior to cancellation and during the following twenty-day period. During the twenty-day period after cancellation, except for the buyer’s duty of care, the goods are at the seller’s risk.
  3. If the seller has performed any services pursuant to a personal solicitation sale prior to its cancellation, and if the seller’s services result in the alteration of property of the buyer, the seller shall restore the property to substantially as good condition as it was in at the time the services were rendered.
  4. The buyer may not cancel a personal solicitation sale if the buyer initiates the contract with the seller and requests the seller to provide goods or services without delay and the seller in good faith makes a substantial beginning of performance before notice of cancellation, and the goods cannot be returned to the seller in substantially as good condition as when the buyer received them.

Source:

S.L. 1973, ch. 390, § 7; 1977, ch. 457, § 8; 1979, ch. 520, § 7; 1991, ch. 531, § 2.

51-18-07.1. Place of transaction.

Any sale subject to this chapter is considered to have taken place in the state where the consumer resides, regardless of the location of the seller.

Source:

S.L. 1991, ch. 532, § 12.

51-18-08. Exceptions.

The provisions of this chapter do not apply to:

  1. Sales of insurance.
  2. Sales of goods or services with a purchase price of less than twenty-five dollars.
  3. Sales of services provided by a cable television system licensed or franchised by any city.
  4. Sale of a subscription to or advertising in a newspaper of general circulation.
  5. Sales of services or advertising by a broadcaster licensed by the federal communications commission.
  6. Telecommunications companies regulated by the public service commission under title 49 or regulated by the federal communications commission.
  7. Sales when the seller provides that the consumer may receive a full refund for the return of undamaged and unused goods if the consumer requests a refund no later than fifteen days after the date the consumer receives the goods and if the seller provides the refund within thirty days after the date the seller receives the returned goods from the consumer. The return and refund privilege must be disclosed to the consumer orally and in writing with delivery of the goods.
  8. Sales when the seller provides that the consumer may receive a full refund for a cancellation of services if the consumer requests a refund no later than fifteen days after the date the consumer receives the services and if the seller provides the refund within thirty days after the consumer cancels the order for the purchase of services not performed or provides a proportional refund for any services not yet performed for the consumer. The return and refund privilege must be disclosed to the consumer orally and in writing with delivery of the services.

Source:

S.L. 1973, ch. 390, § 8; 1991, ch. 532, § 11; 1993, ch. 492, § 1.

51-18-08.1. Waiver.

Any waiver of this chapter is unenforceable and void.

Source:

S.L. 1991, ch. 532, § 12.

51-18-09. Enforcement — Powers — Remedies — Penalty.

Any person who violates any provision of this chapter is guilty of a class B misdemeanor. The state’s attorney or attorney general may enforce this chapter. The attorney general in enforcing this chapter has all the powers provided in this chapter and chapter 51-15 and may seek all remedies in this chapter and chapter 51-15. A violation of this chapter constitutes a violation of chapter 51-15. The remedies, duties, prohibitions, and penalties of this chapter are not exclusive and are in addition to all other causes of action, remedies, and penalties in chapter 51-15, or otherwise provided by law.

Source:

S.L. 1973, ch. 390, § 9; 1975, ch. 106, § 563; 2005, ch. 443, § 5.

Cross-References.

Consumer fraud and unlawful credit practices, see chapter 51-15.

CHAPTER 51-19 Franchise Investment Law

51-19-01. Short title.

This chapter must be known and may be cited as the Franchise Investment Law.

Source:

S.L. 1975, ch. 452, § 1.

Collateral References.

Fraud in connection with franchise or distributorship relationship, 64 A.L.R.3d 6.

Validity, construction, and effect of state franchising statute, 67 A.L.R.3d 1299.

Obstruction or interference, liability for interference with franchise, 97 A.L.R.3d 890.

Validity, construction, and application of state statutes regulating dealings between automobile manufacturers, dealers, and franchisees, 82 A.L.R.4th 624.

Validity, construction, and effect of state business opportunity statutes, 84 A.L.R.4th 374.

Damages for wrongful termination of franchise other than automobile dealership contracts, 40 A.L.R.5th 57.

51-19-02. Definitions.

When used in this chapter, unless the context otherwise requires:

  1. “Advertisement” means any written or printed communication by means of recorded telephone messages or spoken on radio, television, or similar communications media published in connection with an offer or sale of a franchise.
  2. “Area franchise” means any contract or agreement between a franchisor and a subfranchisor by which the subfranchisor is granted the right, for consideration given in whole or in part for such right, to sell or negotiate the sale of franchises in the name or on behalf of the franchisor.
  3. “Business days” are all days other than every Saturday, every Sunday, and such other days as are specified or provided for as holidays in this code.
  4. “Commissioner” means the securities commissioner.
    1. “Franchise” means a contract or agreement, either expressed or implied, whether oral or written, between two or more persons by which:
      1. A franchisee is granted the right to engage in the business of offering, selling, or distributing goods or services under a marketing plan or system prescribed in substantial part by a franchisor;
      2. The operation of the franchisee’s business pursuant to such plan or system is substantially associated with the franchisor’s trademark, service mark, trade name, logotype, advertising, or other commercial symbol designating the franchisor or its affiliate; and
      3. The franchisee is required to pay, directly or indirectly, a franchise fee.
    2. When used in this chapter, unless specifically stated otherwise, “franchise” includes “area franchise”.
  5. “Franchise fee” means any fee or charge that a franchisee or subfranchisor is required to pay or agrees to pay for the right to enter into a business under a franchise agreement, including, but not limited to, any such payment for such goods and services. However, the following may not be considered the payment of a franchise fee:
    1. The purchase or agreement to purchase goods at a bona fide wholesale price if no obligation is imposed upon the purchaser to purchase or pay for a quantity of such goods in excess of that which a reasonable businessperson normally would purchase by way of a starting inventory or supply or to maintain a going inventory or supply.
    2. The payment of a reasonable service charge to the issuer of a credit card by an establishment accepting or honoring such credit card.
    3. Amounts paid to a trading stamp company by a person issuing trading stamps in connection with the retail sale of merchandise or services.
    4. Any other consideration which the commissioner by rule excludes from “franchise fee”.
  6. “Franchisee” means a person to whom a franchise is granted.
  7. “Franchisor” means a person who grants a franchise.
  8. “Fraud” and “deceit” are not limited to common-law fraud and deceit.
  9. “Order” means a consent, authorization, approval, prohibition, or requirement applicable to a specific case issued by the commissioner.
  10. “Person” means an individual, a corporation, a limited liability company, a partnership, a joint venture, an association, a joint-stock company, a trust, or an unincorporated organization.
  11. “Publish” means publicly to issue or circulate by newspaper, mail, radio, or television or otherwise to disseminate to the public.
  12. “Rule” means any published regulation or standard of general application issued by the commissioner.
    1. (1) “Sale” or “sell” includes every contract or agreement of sale of, contract to sell, or disposition of a franchise or interest in a franchise for value.
      1. An offer or sale of a franchise is made in this state when an offer to sell is made in this state or an offer to buy is accepted in this state, or, if the franchisee is domiciled in this state, the franchised business is or will be operated in this state.
      2. An offer to sell is made in this state when the offer either originates from this state or is directed by the offeror to this state and received at the place to which it is directed. An offer to sell is accepted in this state when acceptance is communicated to the offeror in this state when the offeree directs it to the offeror in this state reasonably believing the offeror to be in this state, and it is received at the place to which it is directed.
      3. An offer to sell is not made in this state merely because the publisher circulates or there is circulated on the publisher’s behalf in this state any bona fide newspaper or other publication of general, regular, and paid circulation which has had more than two-thirds of its circulation outside this state during the past twelve months, or a radio or television program originating outside this state is received in this state.
  13. “State” means any state, territory, or possession of the United States, the District of Columbia, and Puerto Rico.
  14. “Subfranchisor” means a person to whom an area franchise is granted.

(2) “Offer” or “offer to sell” includes every attempt to offer to dispose of or solicitation of an offer to buy a franchise or interest in a franchise for value. The terms defined in this subsection do not include the renewal or extension of an existing franchise where there is no interruption of the operation of the franchised business by the franchisee.

(3) “Offer to purchase” includes every attempt to offer to acquire, or solicitation of an offer to sell, a franchise or interest in a franchise for value.

Source:

S.L. 1975, ch. 452, § 2; 1993, ch. 54, § 106.

Notes to Decisions

Franchise.

Corporation’s multi-level marketing plan through which its products were sold by distributors constituted a “franchise” where persons were required to pay certain fees to become distributors and the products were sold under a marketing plan or system prescribed in substantial part by the corporation. Meadow Fresh Farms v. Sandstrom, 333 N.W.2d 780, 1983 N.D. LEXIS 263 (N.D. 1983).

Cooperative marketing agreements are not excepted from definition of “franchise”. Quist v. Best Western Int'l, 354 N.W.2d 656, 1984 N.D. LEXIS 356 (N.D. 1984).

51-19-03. Registration of offer.

It is unlawful for any person to offer or sell any franchise in this state unless the offer of the franchise has been registered under this chapter or exempted under section 51-19-04.

Source:

S.L. 1975, ch. 452, § 3.

Notes to Decisions

Effect of Failure to Register.

If a franchisor violates the Act by failing to register, a contract between the franchisor and a franchisee is not void as against public policy in the absence of legislative intent, express or implied, to that effect since the Act, sections 51-19-12 and 51-19-14, provides the exclusive remedies for such violation. Country Kitchen of Mount Vernon, Inc. v. Country Kitchen of W. Am., Inc., 293 N.W.2d 118, 1980 N.D. LEXIS 231 (N.D. 1980).

Remedies for Violation.

Failure of franchisor to register the offer when required to do so is a violation of the Franchise Investment Law for which sections 51-19-12 and 51-19-14 provide the exclusive remedies. Country Kitchen of Mount Vernon, Inc. v. Country Kitchen of W. Am., Inc., 293 N.W.2d 118, 1980 N.D. LEXIS 231 (N.D. 1980).

A violation of this section does not, as a matter of law, entitle a franchisee to automatic rescission of the franchise agreement; at a minimum, before a franchisee may rescind a franchise agreement pursuant to section 51-19-12 he must overcome any equitable defenses raised by the franchisor. Peck of Chehalis, Inc. v. C. K. of W. America, 304 N.W.2d 91, 1981 N.D. LEXIS 279 (N.D. 1981).

Plaintiff was precluded from rescinding the membership agreement and seeking restitution under the North Dakota Franchise Investment Law for alleged nonregistration where there was no proof of damages and defendant’s equitable defenses of waiver, estoppel and laches were not overcome. Fargo Biltmore Motor Hotel Corp. v. Best Western Int'l, 563 F. Supp. 1022, 1983 U.S. Dist. LEXIS 18305 (D.N.D. 1983).

51-19-04. Exemptions.

  1. There must be exempted from the provisions of section 51-19-03 the offer to sell, the offer to purchase, the sale, and the purchase of a franchise if the franchisor:
    1. Has a net worth on a consolidated basis according to its most recent audited financial statement of not less than ten million dollars; or the franchisor has a net worth according to its most recent financial statement of not less than one million dollars and is at least eighty percent owned by a corporation which has a net worth on a consolidated basis according to its most recent audited financial statement of not less than ten million dollars;
    2. Has had at least twenty-five franchisees conducting business at all times during the five-year period immediately preceding the offer or sale; or has conducted business which is the subject of the franchise continuously for not less than five years preceding the offer or sale; or if any corporation which owns at least eighty percent of the franchisor has had at least twenty-five franchisees conducting business at all times during the five-year period immediately preceding the offer or sale; or such corporation has conducted business which is the subject of the franchise continuously for not less than five years preceding the offer or sale;
    3. Except as provided in subdivision d, discloses in writing to each prospective franchisee, at least seven days prior to the execution by the prospective franchisee of any binding franchise or other agreement, or at least seven days prior to the receipt of any consideration, whichever occurs first, the following information:
      1. The name of the franchisor, the name under which the franchisor is doing or intends to do business, and the name of any parent or affiliated company that will engage in business transactions with franchisees.
      2. The franchisor’s principal business address and the name and address of its agent in this state authorized to receive service of process.
      3. The business form of the franchisor, whether corporate, limited liability company, partnership, or otherwise.
      4. The business experience of the franchisor, including the length of time the franchisor has conducted a business of the type to be operated by the franchisee, has granted franchises for such business, and has granted franchises in other lines of business.
      5. A copy of the typical franchise contract or agreement proposed for use or in use in this state.
      6. A statement of the franchise fee charged, the proposed application of the proceeds of such fee by the franchisor, and the formula by which the amount of the fee is determined if the fee is not the same in all cases.
      7. A statement describing any payments or fees other than franchise fees that the franchisee or subfranchisor is required to pay to the franchisor, including royalties and payments or fees that the franchisor collects in whole or in part on behalf of a third party or parties.
      8. A statement of the conditions under which the franchise agreement may be terminated or renewal refused, or repurchased at the option of the franchisor.
      9. A statement as to whether, by the terms of the franchise agreement or by other device or practice, the franchisee or subfranchisor is required to purchase from the franchisor or the franchisor’s designee services, supplies, products, fixtures, or other goods relating to the establishment or operation of the franchise business, together with a description thereof.
      10. A statement as to whether, by the terms of the franchise agreement or other device or practice, the franchisee is limited in the goods or services offered by the franchisee to customers.
      11. A statement of the terms and conditions of any financing arrangements when offered directly or indirectly by the franchisor or the franchisor’s agent or affiliate.
      12. A statement of any past or present practice of any intent of the franchisor to sell, assign, or discount to a third party any note, contract, or other obligation of the franchisee or subfranchisor in whole or in part.
      13. If any statement of estimated or projected franchisee earnings is used, a statement of such estimation or projection and the data upon which it is based.
      14. A statement as to whether franchisees or subfranchisors receive an exclusive area or territory;
    4. In the case of a material modification of an existing franchise, discloses in writing to each franchisee information concerning the specific sections of the franchise agreement proposed to be modified and such additional information as may be required by rule or order of the commissioner. Any agreement by such franchisee to such material modifications is not binding upon the franchisee if the franchisee, within ten business days after the receipt of such writing identifying the material modification, notifies the franchisor in writing that the agreement to such modification is rescinded. A writing identifying the material modification is received when delivered to the franchisee. A written notice by the franchisee rescinding an agreement to a material modification is effective when delivered to the franchisor or when deposited in the mail, postage prepaid, and addressed to the franchisor in accordance with any notice provisions in the franchise agreement, or when delivered or mailed to the person designated in the franchise agreement for the receipt of notices on behalf of the franchisor; and
    5. Has filed with the commissioner a notice of exemption and paid the fee required by section 51-19-17 prior to the offer or sale of a franchise in this state. Any notice of exemption and the renewal must contain the following:
      1. The name of the franchisor, the name under which the franchisor is doing or intends to do business, and the name of any parent or affiliated company that will engage in business transactions with franchisees.
      2. The franchisor’s principal business address and the name and address of its agent in this state authorized to receive service of process.
      3. The business form of the franchisor, whether corporate, limited liability company, partnership, or otherwise.
      4. A copy of the typical franchise contract or agreement proposed for use or in use in this state.
      5. Information sufficient to establish that the franchisor satisfies the exemption conditions contained in subdivisions a and b.
  2. The offer or sale of a franchise by a franchisee for the franchisee’s own account or the offer or sale of the entire area franchise owned by a subfranchisor for the subfranchisor’s own account is exempted from the provisions of section 51-19-03 if the sale is not effected by or through a franchisor; provided, however, that no subfranchisor may offer or sell a franchise under this subsection without first obtaining the written approval of the commissioner. The commissioner may require that the subfranchisor and the franchisor provide the prospective purchaser and the commissioner with such information and disclosures as the commissioner deems necessary or appropriate to carry out the purposes of this chapter. A sale is not effected by or through a franchisor merely because a franchisor has a right to approve or disapprove a different franchisee.
  3. There must be exempted from the provisions of section 51-19-03 any other transaction which the commissioner by rule exempts as not being comprehended within the purposes of this chapter and the registration of which the commissioner finds is not necessary or appropriate in the public interest or for the protection of investors.

Any notice of exemption remains in effect for a period of one year from the date the notice is received by the commissioner.

Source:

S.L. 1975, ch. 452, § 4; 1989, ch. 592, § 1; 1993, ch. 54, § 106; 2001, ch. 445, § 1.

51-19-05. Exemption proceedings.

The commissioner may by order deny or revoke any exemption specified in section 51-19-04 with respect to the offer or sale of a specific franchise. No such order may be entered without appropriate prior notice to all interested parties, opportunity for hearing, and written findings of fact and conclusions of law, except that the commissioner may by order summarily deny or revoke any of the specified exemptions pending final determination of any proceeding under this section. Upon the entry of a summary order, the commissioner shall promptly notify all interested parties that it has been entered and the reasons therefor and that within fifteen days of the receipt of a written request the matter will be set down for hearing. If no hearing is requested and none is ordered by the commissioner, the order will remain in effect until it is modified or vacated by the commissioner. If a hearing is requested or ordered, the commissioner, after notice of an opportunity for hearing to all interested persons, may modify or vacate the order or extend it until final determination. No order under this section may operate retroactively. No person may be considered to have violated section 51-19-03 by reason of any offer or sale effected after the entry of an order under this section if the person sustains the burden of proof that the person did not know, and in the exercise of reasonable care would not have known, of the order.

Source:

S.L. 1975, ch. 452, § 5.

51-19-06. Application for registration.

The application for registration of an offer must be filed with the commissioner and must contain the following:

  1. The name of the franchisor, the name under which the franchisor is doing or intends to do business, and the name of any parent or affiliated company that will engage in business transactions with franchisees.
  2. The franchisor’s principal business address and the name and address of its agent in this state authorized to receive service of process.
  3. The business form of the franchisor, whether corporate, partnership, limited liability company, or otherwise.
  4. Such information concerning the identity and business experience of persons affiliated with the franchisor as the commissioner may by rule prescribe.
    1. A statement whether any person identified in the application for registration:
      1. Has been convicted of a felony or pleaded nolo contendere to a felony charge or held liable in a civil action by final judgment if such felony or civil action involved fraud, embezzlement, fraudulent conversion, restraint of trade, unfair or deceptive practices, or misappropriation of property;
      2. Has pending against the person any indictment or information or complaint relating to a felony or is the subject of a civil action involving fraud, embezzlement, fraudulent conversion, restraint of trade, unfair or deceptive practices, or misappropriation of property;
      3. Is subject to any currently effective order of the securities and exchange commission or the securities administrator of any state denying registration to or revoking or suspending the registration of such person as a securities broker or dealer or investment adviser, or is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities and Exchange Act of 1934, suspending or expelling such person from membership in such association or exchange;
      4. Is subject to any currently effective order or ruling of the federal trade commission; or
      5. Is subject to any currently effective injunctive or restrictive order relating to business activity as a result of an action brought by any public agency or department, including, without limitation, actions affecting a license as a real estate broker or salesman.
    2. Such statement must set forth the court, the nature of the matter, the date of conviction or judgment or current status of any pending action or proceeding, and any penalty imposed or damages assessed.
  5. The business experience of the franchisor, including the length of time the franchisor has conducted business of the type to be operated by the franchisees, has granted franchises for such business, and has granted franchises in other lines of business.
  6. A recent financial statement of the franchisor, together with a statement of any material changes in the financial condition of the franchisor from the date thereof. The commissioner may by rule or order prescribe the form and content of financial statements required under this chapter, the circumstances under which consolidated financial statements must be filed, and the circumstances under which financial statements must be audited by independent certified public accountants or public accountants.
  7. A copy of the typical franchise contract or agreement proposed for use or in use in this state, including all amendments thereto.
  8. A statement of the franchise fee charged, the proposed application of the proceeds of such fee by the franchisor, and the formula by which the amount of the fee is determined if the fee is not the same in all cases; a statement indicating whether and under what conditions all or part of the initial franchise fee may be returned; and a statement of the estimated total investment to be made for:
    1. The initial franchise fee and other fees, whether payable in one sum or in installments;
    2. Fixed assets other than real property and leases for real property, whether or not financed by contract or installment purchase, leasing, or otherwise;
    3. Working capital, deposits, and prepaid expenses;
    4. Real property, whether or not financed by contract or installment purchase or otherwise, and leases for real property; and
    5. All other goods and services which the franchisee will be required to purchase or lease.
  9. A statement describing any payments or fees other than franchise fees that the franchisee or subfranchisor is required to pay to the franchisor, including royalties and payments or fees which the franchisor collects in whole or in part on behalf of a third party or parties.
  10. A statement of the conditions under which the franchise agreement may be terminated or renewal refused or repurchased at the option of the franchisor, of any limitations on the right of the franchisee to sell, transfer, assign, move, renew, or terminate the franchise, and of any provisions regarding franchisee equity upon sale, termination, refusal to renew, or repurchase.
  11. A statement as to whether, by the terms of the franchise agreement or other device or practice, the franchisee is limited in the goods or services offered by the franchisee to the franchisee’s customers.
  12. A statement of any conditions imposed by the franchisor, whether by the terms of the franchise agreement or by other device or practice, whereby the franchisee is required to purchase services, supplies, products, fixtures, or other goods relating to the establishment or operation of the franchise business from the franchisor or the franchisor’s designee, together with a statement of whether and of the means by which the franchisor derives income from such purchases.
  13. A statement of the terms and conditions of any financing arrangements when offered directly or indirectly by the franchisor or the franchisor’s agent or affiliate.
  14. A statement of any past or present practice or of any intent of the franchisor to sell, assign, or discount to a third party any note, contract, or other obligation of the franchisee or subfranchisor in whole or in part.
  15. A copy of any statement of estimated or projected franchisee earnings prepared for presentation to prospective franchisees or subfranchisors or other persons, together with a statement setting forth the data upon which such estimation or projection is based and explaining clearly the manner and extent to which such data relates to the actual operations of businesses conducted by the franchisor or its franchisees.
  16. A statement describing the training program, supervision, and assistance the franchisor has provided and will provide the franchisee.
  17. A statement of any compensation or other benefit given or promised to a public figure arising in whole or in part from the use of the public figure in the name or symbol of the franchise or the endorsement or recommendation of the franchise by the public figure in advertisements, and the extent to which such public figure is involved in the actual management of the franchisor.
  18. A statement of the number of franchises presently operating and proposed to be sold.
  19. A statement of business failures of franchisees, resales to the franchisor, sales of the franchise to others, and transfers in this state during the two-year period preceding the date of the statement.
  20. A list of the names, addresses, and telephone numbers of all operating franchise businesses under franchise agreement with the franchisor located in this state.
  21. A statement explaining the terms and effects of any covenant not to compete which is or will be included in the franchise or other agreement to be executed by the franchisee.
  22. A statement as to whether franchisees or subfranchisors receive an exclusive area or territory, and, if so, a map thereof.
  23. Any other information the commissioner may require.
  24. Any other information the franchisor may desire to present.
  25. When the person filing the application for registration is a subfranchisor, the application must also include the same information concerning the subfranchisor as is required from the franchisor pursuant to this section.

Source:

S.L. 1975, ch. 452, § 6; 1993, ch. 54, § 106.

51-19-07. Provisions applicable to registration generally.

  1. Applications for registration, registration renewal statements, and amendments thereto must be signed and notarized by the franchisor or by the subfranchisor.
  2. If the commissioner finds that it is necessary and appropriate for the protection of prospective franchisees or subfranchisors because the applicant has failed to demonstrate that adequate financial arrangements have been made to fulfill the franchisor’s obligations to provide real estate, improvements, equipment, inventory, training, or other items included in the offering, the commissioner may by rule or order require the escrow or impoundment of franchise fees and other funds paid by the franchisee or subfranchisor until such obligations have been satisfied. The franchisor may, at the franchisor’s option, furnish an adequate surety bond as provided by rule of the commissioner.
  3. The commissioner shall have power to place such conditions, limitations, and restrictions on any registration as may be necessary to carry out the purposes of this chapter.
    1. If no stop order under section 51-19-09 is in effect under this chapter, registration of the offer of franchises becomes effective after the filing of the application for registration or the last amendment thereto and upon entry by the commissioner into the register of franchises.
    2. A franchise offering must be deemed duly registered for a period of one year from the effective date of the registration, unless the commissioner by order or rule specifies a different period.
    1. The registration may be renewed for additional periods of one year each, unless the commissioner by rule or order specifies a different period, by submitting to the commissioner a registration renewal statement no later than fifteen business days prior to the expiration of the registration unless such period is waived by order of the commissioner. If no stop order or other order under section 51-19-09 is in effect under this chapter, registration of the offer of the franchises becomes renewed upon entry by the commissioner into the register of franchises.
    2. The registration renewal statement must be in the form prescribed by the commissioner and must be accompanied by a proposed prospectus. Each such registration renewal statement must be accompanied by the fee prescribed in section 51-19-17.
    1. A franchisor shall promptly notify the commissioner in writing, by an application to amend the registration, of any material change in the information contained in the application as originally submitted, amended, or renewed. The commissioner may by rule further define what shall be considered a material change for such purposes and the circumstances under which a revised prospectus must accompany such application.
    2. An amendment to an application filed after the effective date of the registration of the sale of franchises, if such amendment is approved by the commissioner, becomes effective on such date as the commissioner may determine, having due regard for the public interest and the protection of franchisees.

Source:

S.L. 1975, ch. 452, § 7; 1991, ch. 97, § 7.

51-19-08. Prospectus requirements.

  1. The application for registration must be accompanied by a proposed prospectus which must contain the material information set forth in the application for registration, as specified by rule of the commissioner, and such additional disclosures as the commissioner may require.
  2. Except as otherwise provided in this chapter, no part of the prospectus may be underscored, italicized, or printed in larger or bolder type than the rest of the prospectus unless the commissioner requires or permits it. The prospectus must recite in bold type of not less than ten-point type that registration does not constitute approval, recommendation, or endorsement by the commissioner.
  3. The commissioner may by rule or order require that specified parts of the prospectus be emphasized by italics, boldfaced type, or other means, that earnings or sales projections or estimates be qualified by appropriate legend and by the filing with the commissioner of such other information or documents as are necessary or appropriate in the public interest or for the protection of prospective franchisees or subfranchisors and may require that such additional information or documents be furnished to prospective franchisees or subfranchisors as part of the prospectus.
  4. The commissioner may by rule or order provide that any information required to be included in the prospectus need not be included in respect of any class of franchisees if the commissioner finds that such information is inappropriate to such class and that disclosure adequate for the protection of prospective franchisees or subfranchisors is otherwise included within the prospectus.
  5. The commissioner may accept, in lieu of the prospectus meeting the requirements set forth in this chapter, a prospectus which complies with the requirements of any federal law or administrative rule or with the law of any other state requiring substantially the same disclosure of information as is required under this chapter.
  6. It is unlawful to sell any franchise in this state which is subject to registration under this chapter without first providing the prospective franchisee at least seven days prior to the execution by the prospective franchisee of any binding franchise or other agreement or at least seven days prior to the receipt of any consideration, whichever occurs first, a copy of the prospectus, together with a copy of all proposed agreements relating to the sale of the franchise. The franchisee must be permitted to retain the prospectus prior and subsequent to the execution of any franchise or other agreement. The person offering or selling the franchise shall obtain a receipt signed by the prospective franchisee acknowledging that the prospective franchisee has received a copy of the prospectus as required under this subsection. The receipt must be kept in the possession of the person offering or selling the franchise, subject to inspection by the commissioner, for a period of three years from the date the receipt is taken.

Source:

S.L. 1975, ch. 452, § 8.

51-19-09. Denial, suspension, or revocation of registration or exemption.

  1. The commissioner may summarily issue a stop order denying the effectiveness of any registration or of any exemption under section 51-19-05 if the commissioner finds:
    1. That there has been a failure to comply with any of the provisions of this chapter or the rules of the commissioner pertaining thereto.
    2. That the offer, sale, or purchase of the franchise would constitute misrepresentation to or deceit or fraud upon purchasers thereof or has worked or tended to work a fraud upon purchasers or would so operate.
    3. That any person is engaging or about to engage in false, fraudulent, or deceptive practices in connection with the offer, sale, or purchase of a franchise.
    4. That any person identified in an application for registration has been charged with or convicted of a felony or a civil action or proceeding is then pending against the person or the person is subject to an order or has had a civil judgment entered against the person as described in subsection 5 of section 51-19-06 and the involvement of such person in the sale of franchises or the business of the franchisor creates a substantial risk to prospective franchisees.
    5. That the applicant or registrant has failed to pay the proper filing fee, but the commissioner may enter only a denial order under this subdivision and shall vacate any such order when the deficiency has been corrected.
    6. That advertising prohibited by section 51-19-10 has been used in connection with the offer, sale, or purchase of franchises.
    7. That the financial condition of the franchisor adversely affects or would adversely affect the ability of the franchisor to fulfill obligations under the franchise agreement.
    8. That the franchisor’s enterprise or method of business includes or would include activities which are illegal where performed.
    9. That the method of sale or proposed method of sale of franchises or the operation of the business of the franchisor or any term or condition of the franchise agreement or any practice of the franchisor is or would be unfair, unjust, or inequitable to franchisees.
    1. The commissioner may issue a summary order denying, postponing, suspending, or revoking the effectiveness of the registration pending final determination of any proceeding under this subsection. Upon the entry of an order, the commissioner shall promptly notify each person specified in subdivision b that it has been entered and the reasons therefor and that within fifteen days after the receipt of a written request the matter will be set down for hearing. If no hearing is requested and none is ordered by the commissioner, the order will remain in effect until it is modified or vacated by the commissioner. If a hearing is requested or ordered, the commissioner, after notice of and opportunity for hearing to each person specified in subdivision b, may modify or vacate the order or extend it until final determination.
    2. No stop order may be entered under this section, except under subdivision a, without appropriate prior notice to the applicant or registrant and the person on whose behalf the franchise is to be or has been offered, opportunity for hearing, and written findings of fact and conclusions of law.
    3. The commissioner may vacate or modify an order entered under section 51-19-05 or this section if the commissioner finds that the conditions which prompted its entry have changed or that it is otherwise in the public interest to do so.
    4. If a hearing is requested or ordered under this section, it must be conducted in accordance with chapter 28-32.
  2. No action may be brought under this section by the commissioner after ten years from the date of the alleged violation.

Source:

S.L. 1975, ch. 452, § 9; 1995, ch. 100, § 13; 1995, ch. 313, § 6.

51-19-10. Advertisement.

  1. No person may publish in this state any advertisement offering a franchise subject to the registration requirements of this chapter unless a true copy of the advertisement has been filed with the office of the commissioner at least five business days prior to the first publication or such shorter period as the commissioner by rule or order may allow or unless such advertisement has been exempted by rule of the commissioner.
  2. No person may publish any advertisement concerning any franchise in this state after the commissioner finds that the advertisement contains any statement that is false or misleading or omits to make any statement necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading and so notifies the person in writing. Such notification may be given summarily without notice of hearing. At any time after the issuance of a notification under this subsection, the person desiring to use the advertisement may request in writing that the order be rescinded. Upon the receipt of such a written request, the matter must be set down for hearing to commence within fifteen business days after such receipt unless the person making the request consents to a later date. After such hearing, the commissioner shall determine whether to affirm and continue or to rescind such order.

Source:

S.L. 1975, ch. 452, § 10.

51-19-11. Fraudulent and prohibited practices.

  1. It is unlawful for any person knowingly to subscribe to or make or cause to be made any material false statement or representation in any application, financial statement, notice, report, or other document filed under any provision of this chapter or to omit to state any material statement or fact in any such application, financial statement, notice, report, or document which is necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or to fail to notify the commissioner of any material change as required under subsection 6 of section 51-19-07.
  2. It is unlawful for any person in connection with the offer, sale, or purchase of any franchise, directly or indirectly:
    1. To employ any device, scheme, or artifice to defraud;
    2. To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading; or
    3. To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.
  3. It is unlawful for any person to violate any order of the commissioner or condition to the effectiveness of the registration of the offer or sale of franchises.
  4. It is unlawful for any person to effect or attempt to effect a sale of a franchise in this state unless such person is identified in an application or amended application or prospectus filed with the commissioner.
  5. It is unlawful for any person to represent or cause to be represented to any prospective purchaser of a franchise that the filing of any document under this chapter or the registration or exemption from registration of a franchise constitutes a finding by the commissioner that any document filed under this chapter is true, complete, and not misleading, or that the commissioner has passed in any way upon the merits of any franchise, or that a franchise is registered or exempted from registration when in fact such is not the case.
  6. No action may be brought under this section by the commissioner after six years from the date of the alleged violation.

Source:

S.L. 1975, ch. 452, § 11; 1995, ch. 100, § 14.

51-19-12. Civil liability.

  1. Any person who violates any provision of this chapter or any rule or order issued by the commissioner thereunder is liable to the franchisee or subfranchisor who may bring an action for damages, for rescission, or for such other relief as the court may deem appropriate.
  2. Every person who directly or indirectly controls a person liable under subsection 1, every partner in a firm so liable, every principal executive officer or director of a corporation so liable, every president or governor of a limited liability company so liable, every person occupying a similar status or performing similar functions, and every employee of a person so liable who materially aids in the act or transaction constituting the violation is also liable jointly and severally with and to the same extent as such person, unless the other person who is so liable had no knowledge of or reasonable grounds to believe in the existence of the facts by reason of which the liability is alleged to exist.
  3. In any action under this section, the franchisee or subfranchisor, if successful, is also entitled to costs and disbursements plus reasonable attorney’s fees.
  4. No franchisee or subfranchisor may file or maintain an action under this section if the person received a written offer before the action was commenced and at a time when the person owned the franchise to refund the consideration paid together with interest at the rate of seven percent per annum from the date of purchase, less the amount of income received on the franchise, conditioned only upon tender by the franchisee or subfranchisor of all items received by the person for the consideration and not sold, and failed to accept the offer within thirty days of its receipt or if the franchisee received the offer before the action was commenced and at a time when the person did not own the franchise, unless the person rejected the offer in writing within thirty days of its receipt; provided, that in either instance the offering documents and rescission prospectus must be submitted to the commissioner for approval at least fifteen days prior to submission to the franchisee or subfranchisor. The rescission offer must recite the provisions of this section. If the franchise involves a substantial building or substantial equipment and a significant period of time has elapsed since the sale of the franchise, the commissioner, in approving a rescission offer, may approve an equitable offer recognizing depreciation, amortization, and other factors which bear upon the value of the franchise being returned to the franchisor.
  5. No action may be brought under this section after five years from the date that the aggrieved party knew or reasonably should have known about the facts that are the basis for the alleged violation. This subsection does not apply to any action under sections 51-19-09 and 51-19-11.
  6. Except as explicitly provided in this section, no civil liability in favor of any private party may arise against any person by implication from or as a result of the violation of any provision of this chapter or any rule or order issued by the commissioner thereunder. Nothing herein limits any liability which may exist by virtue of any other statute or under common law if this chapter were not in effect.

Source:

S.L. 1975, ch. 452, § 12; 1993, ch. 54, § 106; 1995, ch. 100, § 15.

Notes to Decisions

Exclusive Remedies.

This section and section 51-19-14 provide the exclusive remedies for violation of the Country Kitchen of Mount Vernon, Inc. v. Country Kitchen of W. Am., Inc., 293 N.W.2d 118, 1980 N.D. LEXIS 231 (N.D. 1980).

Failure to Register Offer.

If a franchisor violates the Act by failing to register offer to sell when required to do so, this section and section 51-19-14 provide the exclusive remedies, and since such sections do provide the exclusive remedies, such failure to register does not make a contract between the franchisor and a franchisee void as against public policy, in the absence of legislative intent to that effect. Country Kitchen of Mount Vernon, Inc. v. Country Kitchen of W. Am., Inc., 293 N.W.2d 118, 1980 N.D. LEXIS 231 (N.D. 1980).

Rescission.

A violation of franchise law does not, as a matter of law, entitle a franchisee to automatic rescission of the franchise agreement; at a minimum, before a franchisee may rescind a franchise agreement under this section he must overcome any equitable defenses raised by the franchisor. Peck of Chehalis, Inc. v. C. K. of W. America, 304 N.W.2d 91, 1981 N.D. LEXIS 279 (N.D. 1981).

Collateral References.

Vicarious liability of private franchisor, 81 A.L.R.3d 764.

51-19-13. Powers of the commissioner — Civil penalty.

  1. Whenever it appears to the commissioner that any person has engaged or is about to engage in any act or practice constituting a violation of any provision of this chapter or any rule or order hereunder, the commissioner may bring an action in the name of the people of the state of North Dakota in the district court to enjoin the acts or practices or to enforce compliance with this chapter or any rule or order hereunder. Upon a proper showing, a permanent or preliminary injunction, restraining order, or writ of mandamus must be granted and a receiver or conservator may be appointed for the defendant or the defendant’s assets. The court may not require the commissioner to post a bond.
    1. The commissioner may make such public and private investigations within or outside of this state as the commissioner deems necessary to determine whether any person has violated or is about to violate any provision of this chapter or any rule or order hereunder or to aid in the enforcement of this chapter or in the prescribing of rules and forms hereunder and publish information concerning the violation of this chapter or any rule or order hereunder.
    2. The commissioner may require or permit any person to file a statement under oath or otherwise subject to the penalties of perjury as the commissioner requires in writing as to all the facts and circumstances concerning the matter to be investigated. Failure to reply with all required information to the commissioner’s letter within fifteen days after receipt thereof shall be the basis for issuance of a cease and desist order.
    3. For the purpose of any investigation or proceeding under this chapter, the commissioner or any officer designated by the commissioner may administer oaths and affirmations, subpoena witnesses and compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, agreements, or other documents or records which the commissioner deems relevant or material to the inquiry.
    4. In case of contumacy by, or refusal to obey a subpoena issued to, any person, the district court upon application by the commissioner may issue to the person an order requiring the person to appear before the commissioner or the officer designated by the commissioner there to produce documentary evidence, if so ordered, or to give evidence touching the matter under investigation or in question. Failure to obey the order of the court may be punished by the court as a contempt.
    5. No person is excused from attending and testifying or from producing any document or record before the commissioner or in obedience to the subpoena of the commissioner or any officer designated by the commissioner or in any proceeding instituted by the commissioner on the ground that the testimony or evidence, documentary or otherwise, required of the person may tend to incriminate the person or subject the person to a penalty or forfeiture. No testimony or evidence, documentary or otherwise, compelled from an individual after a valid claim of the privilege against self-incrimination has been made may be used against the individual in any criminal proceeding, or in any proceeding to subject the individual to a penalty or forfeiture, except that the individual testifying is not exempt from prosecution and punishment for perjury or contempt committed in testifying.
    6. If, in the opinion of the commissioner, the offer of any franchise is subject to registration under this chapter and it is being or has been offered for sale without the offer first being registered, the commissioner may order the franchisor or offeror of the franchise to desist and refrain from the further offer or sale of the franchise unless and until the offer has been duly registered under this chapter. In addition to any other remedy authorized by this chapter, the commissioner may impose by order and collect a civil penalty in an amount not to exceed ten thousand dollars for each violation against any person found in an administrative action to have violated this chapter. The commissioner may bring an action in district court to recover penalties under this section. If, within fifteen days after the order has been served on the respondent, a request for a hearing is filed in writing by the person to whom the order was directed, a hearing must be held within fifteen business days after the request is made unless the persons affected consent to a later date. If a request for hearing is not made within the fifteen days permitted herein, the order is final.
    7. If, in the opinion of the commissioner, the offer of any franchise exempt from registration under this chapter is being or has been offered for sale without complying with section 51-19-04 or subsection 2 of section 51-19-11, the commissioner may order the franchisor or offeror of the franchise to desist and refrain from the further offer or sale of the franchise unless and until an offer is made in compliance with this chapter. In addition to any other remedy authorized by this chapter, the commissioner may impose by order and collect a civil penalty in an amount not to exceed ten thousand dollars for each violation against any person found in an administrative action to have violated this chapter. The commissioner may bring an action in district court to recover penalties under this section. If, within fifteen days after the order has been served on the respondent, a request for a hearing is filed in writing by the person to whom the order was directed, a hearing must be held within fifteen business days after the date. If a request for hearing is not made within the fifteen days permitted herein, the order is final.
    8. The commissioner may refer evidence available concerning any violation of this chapter or of any rule or order issued under this chapter to the appropriate criminal prosecutor who may, with or without the reference, institute criminal proceedings under this chapter. The criminal prosecutor may apply for and on due showing be issued the court’s subpoena requiring the appearance forthwith of any defendant and the defendant’s agents, employees, partners, officers, and directors, and the production of any documents, books, and records necessary for the prosecution of the criminal proceedings.
  2. No action may be brought under this chapter by the commissioner after five years from the date that the commissioner knew or reasonably should have known about the facts that are the basis for the alleged violation. This subsection does not apply to any action under sections 51-19-09 and 51-19-11.

Source:

S.L. 1975, ch. 452, § 13; 1991, ch. 97, § 8; 1995, ch. 100, §§ 16, 17; 2001, ch. 445, § 2.

51-19-14. Criminal penalties.

  1. Any person who willfully violates any provision of this chapter or who willfully violates any rule or order under this chapter is guilty of a class B felony.
  2. Any person who willfully employs, directly or indirectly, any device, scheme, or artifice to defraud in connection with the offer or sale of any franchise or willfully engages, directly or indirectly, in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person in connection with the offer, purchase, or sale of any franchise is guilty of a class B felony.
  3. Nothing in this chapter limits the power of the state to punish any person for any conduct that constitutes a crime.
  4. An information must be filed or an indictment must be found under this chapter within five years after the commissioner or criminal prosecutor knew or reasonably should have known about the facts that are the basis for the prosecution.
  5. “Willfully” means the person was aware of the consequences of the person’s actions, and proof of evil motive or intent to violate the law or knowledge that the law was being violated is not required. Each act or omission is a separate offense, and a prosecution or conviction for an offense does not bar a prosecution or conviction for any other offense.

Source:

S.L. 1975, ch. 452, § 14; 1995, ch. 100, § 18.

Notes to Decisions

Exclusive Remedies.

This section and section 51-19-12 provide the exclusive remedies for violation of the Country Kitchen of Mount Vernon, Inc. v. Country Kitchen of W. Am., Inc., 293 N.W.2d 118, 1980 N.D. LEXIS 231 (N.D. 1980).

Failure to Register Offer.

If a franchisor violates the Act by failing to register offer to sell when required to do so, this section and section 51-19-12 provide the exclusive remedies, and since such sections do provide the exclusive remedies, such failure to register does not make a contract between the franchisor and a franchisee void as against public policy, in the absence of legislative intent to that effect. Country Kitchen of Mount Vernon, Inc. v. Country Kitchen of W. Am., Inc., 293 N.W.2d 118, 1980 N.D. LEXIS 231 (N.D. 1980).

51-19-15. Service of process.

  1. Every applicant for registration of an offer to sell franchises under this chapter, other than a domestic corporation or limited liability company, shall file with the commissioner in such form as the commissioner prescribes an irrevocable consent appointing the commissioner or commissioner’s successor in office to be the applicant’s attorney to receive service of any lawful process in any noncriminal suit, action, or proceeding against the applicant or applicant’s successor, executor, or administrator, which arises under this chapter or any rule or order hereunder after the consent has been filed with the same force and validity as if served personally on the person filing the consent. A person who has filed such a consent in connection with a previous registration under this chapter need not file another. Service may be made by leaving a copy of the process in the office of the commissioner but it is not effective unless the plaintiff, who may be the commissioner in a suit, action, or proceeding instituted by the commissioner, forthwith sends notice of the service and a copy of the process by registered or certified mail to the defendant or respondent at the defendant’s or respondent’s last address on file with the commissioner and the plaintiff’s affidavit of compliance with this section is filed in the case on or before the return day of the process, if any, or within such further time as the court allows.
  2. When any person, including any nonresident of this state, engages in conduct prohibited or made actionable by this chapter or any rule or order hereunder, whether or not the person has filed a consent to service of process under subsection 1 and personal jurisdiction over the person cannot otherwise be obtained in this state, that conduct must be considered equivalent to the person’s appointment of the commissioner or commissioner’s successor in office to be the person’s attorney to receive service of any lawful process in any noncriminal suit, action, or proceeding against the person or the person’s successor, executor, or administrator which grows out of that conduct and which is brought under this chapter or any rule or order hereunder with the same force and validity as if served on the person personally. Service may be made by leaving a copy of the process in the office of the commissioner, but it is not effective until the plaintiff, who may be the commissioner in a suit, action, or proceeding instituted by the commissioner, forthwith sends notice of the service and a copy of the process by registered or certified mail to the defendant or respondent at the defendant’s or respondent’s last-known address or takes other steps which are reasonably calculated to give actual notice and the plaintiff’s affidavit of compliance with this section is filed in the case on or before the return day of the process, if any, and within such further time as the court allows.

Source:

S.L. 1975, ch. 452, § 15; 1993, ch. 54, § 106.

51-19-16. General provisions.

  1. Every franchisor or subfranchisor offering franchises for sale in this state shall at all times keep and maintain a complete set of books, records, and accounts of such sales, which must at all times be open to inspection by the commissioner, and shall make and file with the commissioner such reports as the commissioner may by rule or order prescribe.
  2. The commissioner may accept and act upon the opinions, appraisals, and reports of any engineers, appraisers, or other experts which may be presented by an applicant or any interested party on any question of fact concerning or affecting the franchises proposed to be offered and sold. In lieu of, or in addition to, such opinions, appraisals, and reports, the commissioner may have any or all matters concerning or affecting such franchises investigated, appraised, passed upon, and certified to the commissioner by engineers, appraisers, or other experts selected by the commissioner.
  3. Any document filed under this chapter may be incorporated by reference in a subsequent application filed under this chapter if it was filed within four years prior to the filing of such application or is otherwise available in the files of the commissioner, to the extent that the document is currently accurate.
  4. In any proceeding under this chapter, the burden of proving an exemption or exception from a definition is upon the person claiming it.
  5. The commissioner may honor requests from interested persons for interpretive opinions.
  6. No provision of this chapter imposing any liability applies to any act done or omitted in good faith in conformity with any rule, form, order, or written interpretive opinion of the commissioner or any opinion of the attorney general, notwithstanding that the rule, form, order, or written interpretive opinion may later be amended or rescinded or be determined by judicial or other authority to be invalid for any reason.
  7. Any condition, stipulation, or provision purporting to bind any person acquiring any franchise to waive compliance with any provision of this chapter or any rule or order hereunder is void.
  8. Every final order, decision, license, or other official act of the commissioner is subject to judicial review in accordance with chapter 28-32.

Source:

S.L. 1975, ch. 452, § 16.

51-19-17. Administration.

  1. This chapter must be administered by the commissioner.
    1. The commissioner shall charge and collect the fees fixed by this section. All fees and charges collected under this section must be transmitted to the state treasurer and must be credited to the general fund.
    2. The fee for filing an application for registration of the sale of franchises is two hundred fifty dollars.
    3. The fee for filing an application for renewal of an application is one hundred dollars.
    4. The fee for filing an amendment to the application is fifty dollars.
    5. The fee for filing a notice of exemption is one hundred dollars.
    6. The fee for filing for renewal of a notice of exemption is fifty dollars.
    7. The expenses reasonably attributable to the investigation or examination of any matter arising under this chapter must be charged to the applicant or registrant involved, but the expenses so charged may not exceed such maximum amounts as the commissioner by rule prescribes.
    1. The commissioner may from time to time make, amend, and rescind such rules, forms, and orders as are necessary to carry out the provisions of this chapter, including rules and forms governing applications and reports and defining any terms, whether or not used in this chapter, insofar as the definitions are not inconsistent with the provisions of this chapter.
    2. All rules of the commissioner, other than those relating solely to the internal administration of the commissioner’s office, must be made, amended, or rescinded in accordance with chapter 28-32.
    1. All applications, reports, and other papers and documents filed with the commissioner under this chapter must be open to public inspection, except that the commissioner may withhold from public inspection any information the disclosure of which is, in the judgment of the commissioner, not necessary in the public interest or for the protection of investors. The commissioner may publish any information filed with the commissioner or obtained by the commissioner, if, in the judgment of the commissioner, such action is in the public interest. No provision of this chapter authorizes the commissioner or any of the commissioner’s assistants, clerks, or deputies to disclose any information withheld from public inspection except among themselves or when necessary or appropriate in a proceeding or investigation under this chapter or to other federal or state regulatory agencies. No provision of this chapter either creates or derogates from any privilege which exists at common law or otherwise when documentary or other evidence is sought under a subpoena directed to the commissioner or any of the commissioner’s assistants, clerks, or deputies.
    2. It is unlawful for the commissioner or any of the commissioner’s assistants, clerks, or deputies to use for personal benefit any information which is filed with or obtained by the commissioner and which is not then generally available to the public.
  2. A document is filed when it is received by the commissioner.
  3. Upon request and at such reasonable charges as the commissioner prescribes by rule, the commissioner shall furnish to any person photostatic or other copies, certified under the commissioner’s seal of office if requested, of any document which is retained as a matter of public record except that the commissioner may not charge or collect any fee for photostatic or other copies of any document furnished to public officers for use in their official capacity. In any judicial proceeding or prosecution, any copy so certified is prima facie evidence of the contents of the document certified.

Source:

S.L. 1975, ch. 452, § 17; 1989, ch. 592, § 2.

51-19-18. Franchisor-franchisee liability protection.

Notwithstanding any other provision of law or any voluntary agreement between the United States department of labor and a franchisee, a franchisee or an employee of a franchisee is not considered an employee of the franchisor.

History. S.L. 2017, ch. 355, § 1, eff August 1, 2017.

CHAPTER 51-20 Recreation Vehicle Franchises

51-20-01. Definitions.

As used in this chapter, unless the context requires otherwise:

  1. “Contractual arrangement” means a written franchise or other written agreement, by whatever name such agreement may be called, between a distributor and a dealer by which the dealer agrees to sell at retail and service the distributor’s recreation vehicles in a given location or locations, whether or not exclusively with respect to a given geographic area, and the distributor authorizes the dealer to sell, or sell and service, and agrees to supply an inventory of recreation vehicles, and, if the dealer is to perform service, an inventory of parts for those vehicles.
  2. “Dealer” means a person, partnership, corporation, limited liability company, or other business entity which sells at retail and services new recreation vehicles.
  3. “Distributor” means any manufacturer, wholesaler, or distributor of recreation vehicles who has a contractual arrangement with a dealer in such vehicles.
  4. “Recreation vehicle” includes snowmobiles as defined in section 39-24-01, plus trailers for transporting same when those trailers are furnished by the same distributor who furnishes the snowmobiles; off-highway vehicles as defined in section 39-29-01; motorcycles as defined in section 39-01-01; travel trailers, which term means vehicles without motive power designed for recreational use as living or sleeping quarters for people and which do not exceed forty feet [12.19 meters] in length; and motorboats, whether propelled by an inboard or outboard marine engine, plus any outboard marine engines and boat trailers.
  5. “Repair parts” includes accessories.

Source:

S.L. 1975, ch. 453, § 1; 1993, ch. 54, § 106; 2001, ch. 446, § 1; 2005, ch. 340, § 7; 2005, ch. 344, § 13.

Collateral References.

Validity, construction, and application of state statutes regulating dealings between automobile manufacturers, dealers, and franchisees, 82 A.L.R.4th 624.

51-20-02. Recreation vehicle dealers may recover value of vehicles or parts from distributor in certain cases.

  1. If a dealer has entered a written contract with a distributor in which the dealer agrees to maintain a stock of recreation vehicles, repair parts, or both recreation vehicles and repair parts, and either the dealer or the distributor desires to cancel or discontinue the contract, the distributor shall pay to the dealer, unless the dealer desires to keep the recreation vehicles or repair parts, the following amounts:
    1. A sum equal to one hundred percent of the net cost of all current year, unused, and complete recreation vehicles;
    2. Eighty-five percent of the current net prices on repair parts, including the superseded parts listed in current price lists or catalogs, if the superseded parts have previously been purchased from the distributor and were in the dealer’s inventory on the date of cancellation or discontinuance of the contract or were thereafter received by the dealer from the distributor;
    3. A sum equal to five percent of the current net price of all parts returned as reimbursement for handling, packing, and loading of those parts; and
    4. Any freight charges on the equipment or repair parts paid by the dealer.
  2. When a distributor has made payment in accordance with this section, title to the recreation vehicles and repair parts must pass to the distributor and the distributor is entitled to possession of the recreation vehicles and repair parts. The provisions of this section are supplemental to any contractual rights which the dealer may have with respect to reimbursement for recreation vehicles and parts inventory held by the dealer at cancellation or discontinuance of a contractual arrangement. The dealer may elect to pursue the dealer’s rights under the contractual arrangement and under this section. An election by a dealer to pursue a contractual remedy does not bar the dealer’s right to the remedy provided by this section with respect to those pieces of recreation vehicles and repair parts not affected by the contract remedy.
  3. This section applies to every contract now in effect which has no stated expiration date and to all other contracts entered after July 31, 2001. Contracts in force and effect on July 31, 2001, which by their terms will terminate on a date subsequent to July 31, 2001, are governed by the law existing before August 1, 2001.

Source:

S.L. 1975, ch. 453, § 2; 2001, ch. 446, § 2.

CHAPTER 51-20.1 Heavy Construction Equipment Franchise Termination

51-20.1-01. Definitions.

As used in this chapter, unless the context requires otherwise:

  1. “Distributor” means any person involved in manufacturing, wholesaling, or distributing heavy construction equipment or repair parts for heavy construction equipment, or both equipment and parts, who is authorized to, and does, enter into a written contract with a retail dealer.
  2. “Heavy construction equipment” means self-propelled or pull-type construction machinery, and accessories therefor, primarily used in projects requiring paving, earthmoving, or bridge, road, highway, and commercial building construction.
  3. “Person” includes any individual, firm, partnership, joint venture, association, corporation, limited liability company, or other business entity.
  4. “Retail dealer” means every person engaged in the business of selling heavy construction equipment at retail.

Source:

S.L. 1981, ch. 499, § 1; 1993, ch. 54, § 106.

51-20.1-02. Retail dealers may recover cost of equipment and parts upon discontinuance of contract with distributor.

If a retail dealer has entered into a written contract with a distributor in which the retail dealer agrees to maintain a stock of heavy construction equipment, repair parts, or both heavy construction equipment and repair parts, and either the distributor or the retail dealer desires to cancel or discontinue the contract, the distributor shall pay to the retail dealer, unless the retail dealer desires to keep the equipment or repair parts, the following amounts:

  1. A sum equal to one hundred percent of the net cost of all unused, complete heavy construction equipment.
  2. Eighty-five percent of the current net prices on repair parts, including the superseded parts listed in current price lists or catalogs, if the superseded parts have previously been purchased from the distributor, and were in the retail dealer’s inventory on the date of cancellation or discontinuance of the contract, or were thereafter received by the retail dealer from the distributor.
  3. A sum equal to five percent of the current net price of all parts returned as reimbursement for handling, packing, and loading of those parts.
  4. Any freight charges on the equipment or repair parts paid by the retail dealer.

When a distributor has made payment in accordance with this section, title to the heavy construction equipment and repair parts shall pass to the distributor, and the distributor is entitled to possession of the heavy construction equipment and repair parts. This section is supplemental to any provisions contained in any contract between the retail dealer and the distributor relating to the return of heavy construction equipment and repair parts. Thus, the retail dealer can elect to pursue the retail dealer’s remedy under this section, or under the contract relating to return of heavy construction equipment and repair parts. An election by a retail dealer to pursue a contractual remedy does not bar the retail dealer’s right to the remedy provided by this section with respect to those pieces of heavy construction equipment and repair parts not affected by the contract remedy.

The provisions of this section apply to every contract now in effect which has no stated expiration date, and to all other contracts entered into after June 30, 1981. Contracts in force and effect on June 30, 1981, which by their terms will terminate on a date subsequent to June 30, 1981, shall be governed by the law existing prior to July 1, 1981.

Source:

S.L. 1981, ch. 499, § 2.

51-20.1-03. Termination of contractual arrangements to be done with good cause — Good cause defined.

  1. Any distributor of heavy construction equipment, repair parts, or both, who enters into a written contract with any retail dealer in heavy construction equipment, repair parts, or both, in which the retail dealer agrees to maintain a stock of heavy construction equipment, repair parts, or both, may not terminate, cancel, or fail to renew the contract without good cause.
  2. As used in this section, “good cause” means that the retail dealer has failed to comply with the requirements imposed upon the retail dealer by the terms of the written contract between the retail dealer and the distributor. The determination by the distributor that the distributor has good cause for termination, cancellation, or nonrenewal must be made in good faith.
  3. In any civil action against a distributor for violating this section, the distributor must establish that the contract termination, cancellation, or nonrenewal was made in good faith for good cause. If the distributor fails to establish good cause for its termination, cancellation, or nonrenewal action, the distributor is liable for all special and general damages sustained by the retail dealer, including, but not limited to, the costs of the litigation and reasonable attorney’s fees for prosecuting the civil action. In addition, the retail dealer, where appropriate, is entitled to injunctive relief. The provisions of this section apply to contracts in effect on July 1, 1981, which have no expiration date and are continuing contracts, and to all other contracts entered into, amended, or renewed after June 30, 1981. This section does not apply to contracts in force and effect on June 30, 1981, which by their terms will terminate on a date subsequent to June 30, 1981. Those contracts are governed by the law as it existed prior to July 1, 1981.

Source:

S.L. 1981, ch. 499, § 3.

51-20.1-04. Determination of retail dealer’s reimbursement.

The extent of reimbursement of the retail dealer for heavy construction equipment and repair parts pursuant to section 51-20.1-02 must be determined by taking one hundred percent of the net cost on unused, complete heavy construction equipment, and eighty-five percent of the current net price of repair parts, as shown in the distributor’s price lists or catalogs in effect at the time the contract was canceled, terminated, or not renewed.

Source:

S.L. 1981, ch. 499, § 4.

51-20.1-05. Failure to make reimbursement on cancellation of contract — Liability.

If any heavy construction equipment distributor fails or refuses, upon cancellation, termination, or nonrenewal of a contract by either a retail dealer or the distributor, to make payment to the retail dealer as required by section 51-20.1-02, the distributor is liable in a civil action brought by the retail dealer for one hundred percent of the net cost of the unused, complete heavy construction equipment, plus transportation charges paid by the retail dealer, and eighty-five percent of the current net price of repair parts, plus five percent of that current net price for handling and loading plus freight charges on the repair parts which have been paid by the retail dealer. A distributor is liable for equivalent amounts in a civil action if the distributor refuses to supply heavy construction equipment, repair parts, or both, to a retail dealer who has a contract dated after June 30, 1981, or a contract with no expiration date which is continuing in force on July 1, 1981.

Source:

S.L. 1981, ch. 499, § 5.

CHAPTER 51-20.2 Franchise Merchandise Return

51-20.2-01. Definitions.

As used in this chapter, unless the context requires otherwise:

  1. “Contractual arrangement” means a written franchise or other written agreement, by whatever name such agreement may be called, between a distributor and a dealer by which the dealer agrees to sell at retail and service the distributor’s merchandise in a given location or locations, whether or not exclusively with respect to a given geographic area, and the distributor authorizes the dealer to sell, or sell and service, and agrees to supply an inventory of merchandise and, if the dealer is to perform service, an inventory of parts for that merchandise.
  2. “Dealer” means a person, partnership, corporation, limited liability company, or other business entity which sells at retail and services new merchandise and is not engaged in the business of home solicitation sales.
  3. “Distributor” means any manufacturer, wholesaler, or distributor of merchandise who has a contractual arrangement with a dealer for such merchandise.
  4. “Merchandise” includes all new products of inventory intended for resale or retail sale by franchised dealers.

Source:

S.L. 1987, ch. 593, § 1; 1993, ch. 54, § 106.

Collateral References.

Primary liability of private chain franchisor for injury or death caused by franchise premises or equipment, 59 A.L.R.4th 1142.

51-20.2-02. Dealers may recover value of merchandise or parts from distributor in certain cases.

  1. Whenever:
    1. A distributor cancels or discontinues a contractual arrangement; or
    2. A dealer cancels or discontinues a contractual arrangement because the distributor entered into a contractual arrangement with another dealer to sell in the same geographical area for which the first dealer had an exclusive dealership,
  2. The provisions of this section are supplemental to any contractual rights which the dealer may have with respect to reimbursement for merchandise and parts inventory held by the dealer at cancellation or discontinuance of a contractual arrangement. The dealer may elect to pursue the dealer’s rights under the contractual arrangement and under this section, but the dealer’s total recovery may not exceed the net cost of the merchandise and parts, plus freight costs for return of the merchandise and parts, remaining in the dealer’s hands at the time of cancellation or discontinuance, plus legal costs awarded by the court.

the dealer may recover from the distributor the net cost to the dealer of all new and unused merchandise, and parts for such merchandise, held by the dealer at the time of cancellation or discontinuance of the contractual arrangement. The dealer may enforce the right given under this section by civil action commenced in district court in the county where the dealer has the dealer’s principal place of business in North Dakota.

Source:

S.L. 1987, ch. 593, § 1.

51-20.2-03. Exception.

The provisions of this chapter do not apply to chapters 51-07, 51-19, 51-20, and 51-20.1.

Source:

S.L. 1987, ch. 593, § 1.

CHAPTER 51-21 Retail Theft Act

51-21-01. Definitions.

As used in this chapter, unless the context requires otherwise:

  1. An item is “concealed” within the meaning of this chapter if, even though there is some notice of its presence, the item itself is not visible through ordinary observation.
  2. “Full retail value” means the merchant’s stated or advertised price of the merchandise.
  3. “Merchandise” means any item of tangible personal property and specifically includes shopping carts.
  4. “Merchant” means an owner or operator of any retail mercantile establishment or any agent, employee, lessee, consignee, officer, franchisee, or independent contractor or such owner or operator.
  5. “Person” means any natural person or individual.
  6. “Premises of a retail mercantile establishment” includes, but is not limited to, the retail mercantile establishment, any common-use areas in shopping centers, and all parking areas set aside by a merchant, or on behalf of a merchant, for the parking of vehicles for the convenience of the patrons of said retail mercantile establishment.
  7. “Retail mercantile establishment” means any place where merchandise is displayed, held, offered, or stored for sale to the public.
  8. “Shopping cart” means those pushcarts of the type or types which are commonly provided by grocery stores, drugstores, or other retail mercantile establishments for the use of the public in transporting commodities in stores and markets and, incidentally, from the stores to a place outside the store.

Source:

S.L. 1975, ch. 454, § 1.

Collateral References.

Rules or instructions: admissibility of defendant’s rules or instructions for dealing with shoplifters, in action for false imprisonment or malicious prosecution, 31 A.L.R.3d 705.

Detention statutes: construction and effect, in false imprisonment action, of statute providing for detention of suspected shoplifters, 47 A.L.R.3d 998.

Price tags, changing of by patron in self-service store as criminal offense, 60 A.L.R.3d 1293.

Larceny, what conduct amounts to an overt act or acts done toward commission of larceny so as to sustain charge of attempt to commit larceny, 76 A.L.R.3d 842.

Electronic sensing device, use of to detect shoplifting as unconstitutional search and seizure, 10 A.L.R.4th 376.

Validity, construction, and effect of statutes establishing shoplifting or its equivalent as separate criminal offense, 64 A.L.R.4th 1088.

51-21-02. Presumption.

Any person concealing upon that person’s person or among that person’s belongings, or causing to be concealed upon the person or among the belongings of another, unpurchased merchandise displayed, held, offered, or stored for sale in a retail mercantile establishment and removing it to a point beyond the last station for receiving payments in that retail mercantile establishment shall be prima facie presumed to have so concealed such merchandise with the intention of permanently depriving the merchant of possession or of the full retail value of such merchandise.

Source:

S.L. 1975, ch. 454, § 2.

51-21-03. Detention of suspect — Procedure.

Any peace officer or merchant who reasonably believes that a person has committed, or is in the process of committing, theft may detain such person, on or off the premises of a retail mercantile establishment, in a reasonable manner and for a reasonable length of time for all or any of the following purposes:

  1. To require the person to identify oneself.
  2. To verify such identification.
  3. To determine whether such person has in the person’s possession unpurchased merchandise and, if so, to recover such merchandise.
  4. To inform a peace officer of the detention of the person and surrender custody of that person to a peace officer.
  5. In the case of a minor, to inform a peace officer, the parents, guardian, or other private person interested in the welfare of that minor of this detention and to surrender custody of said minor to the person informed.

Source:

S.L. 1975, ch. 454, § 3.

Notes to Decisions

Color of State Law.

Where it was not alleged that retail store had a policy or custom of false arrests or malicious prosecution, retail store could not be held liable under section 1983 (42 USCS § 1983) even though it was assumed to be acting “under color of state law” by virtue of this section. Sanders v. Sears, Roebuck & Co., 984 F.2d 972, 1993 U.S. App. LEXIS 1494 (8th Cir. N.D. 1993).

Section 1983 Action.

The issue of the legality of the arrest of plaintiff in a section 1983 action (42 USCS § 1983) who alleged that a retail security guard maliciously detained him on suspicion of shoplifting had been previously litigated where there was no suppression hearing at the state criminal trial, and a motion for dismissal for lack of probable cause clearly referred to whether there was sufficient evidence to go to the jury, not whether there was sufficient probable cause for arrest; therefore, the district court erred in finding defendant collaterally estopped from raising the issue of probable cause and in granting summary judgment for dismissal of the section 1983 claim and other pendent state claims. Sanders v. Sears, Roebuck & Co., 984 F.2d 972, 1993 U.S. App. LEXIS 1494 (8th Cir. N.D. 1993).

51-21-04. Civil and criminal immunity for acts of detention.

Any peace officer or merchant who detains any person as permitted under section 51-21-03 may not be held civilly or criminally liable for any claim for relief allegedly arising from such detention.

Source:

S.L. 1975, ch. 454, § 4; 1985, ch. 82, § 124.

51-21-05. Civil remedy against adult shoplifters or the parent of a minor shoplifter.

  1. An adult who commits the offense of theft from a merchant is civilly liable to the merchant for the retail value of the merchandise, plus exemplary damages of not more than two hundred fifty dollars, costs of the civil action, and reasonable attorney’s fees.
  2. The parent or legal guardian of an unemancipated minor who while living with the parent or legal guardian commits the offense of theft from a merchant is civilly liable to the merchant for the retail value of the merchandise, plus exemplary damages of not more than two hundred fifty dollars, costs of the civil action, and reasonable attorney’s fees. If the merchant knows or reasonably should know that the individual believed to have committed theft is a minor, the merchant may not request that the individual sign an admission of theft or other similar declaration unless the minor’s parent, guardian, or attorney is present. An admission in violation of this subsection is not valid and is inadmissible in a civil or criminal action.
  3. A conviction or plea of guilty for the theft is not a prerequisite to the bringing of a civil action under this section. However, if a criminal theft charge is filed against the individual, the merchant may not pursue civil damages until completion of the criminal action.
  4. A parent or legal guardian of an unemancipated minor is not civilly liable under this section if it is determined by the court that one of the principal rationales for the shoplifting was a desire on the part of the minor to cause the minor’s parent or legal guardian to be liable under this section.

Source:

S.L. 1975, ch. 454, § 5; 1979, ch. 521, § 1; 2011, ch. 374, § 1.

Effective Date.

The 2011 amendment of this section by section 1 of chapter 374, S.L. 2011 became effective August 1, 2011.

CHAPTER 51-22 Data Processing Information Confidentiality

51-22-01. Definitions.

As used in this chapter:

  1. “Business entity” means a sole proprietorship, partnership, corporation, limited liability company, association, or other group, however organized and whether or not organized to operate at a profit, doing business in this state.
  2. “Data processing services” means any systematic sequence of operations, including but not limited to bookkeeping functions, inventory control, storage, or manipulation and retrieval of management or personnel information, performed upon data by electronic devices which perform logical, arithmetic, and memory functions by the manipulation of electronic or magnetic impulses. The term does not include operations performed by telecommunication devices.
  3. “Individual” means a natural person.
  4. “Person” means any natural person, corporation, limited liability company, partnership, firm, association, or governmental entity.
  5. “Record” means any item, collection, or grouping of information about an individual or business entity.

Source:

S.L. 1981, ch. 500, § 1; 1993, ch. 54, § 106.

51-22-02. Prohibition against disclosure except upon written consent — Application of section.

  1. No business entity which charges a fee for data processing services performed may disclose in whole or in part the contents of any record, including the disclosure of information contained in the record through inclusion in any composite of information, which is prepared or maintained by such business entity to any person, other than the individual or business entity which is the subject of the record, without the express written consent of such individual or business entity.
  2. This section does not apply to the following:
    1. A disclosure to any person pursuant to a subpoena or court order.
    2. A disclosure which is discoverable pursuant to the North Dakota Rules of Civil Procedure.
    3. A disclosure to any person pursuant to a lawful search warrant.

Source:

S.L. 1981, ch. 500, § 2.

51-22-03. Initiation of civil action — Liability for damages — Limitation.

  1. A person may initiate a civil action against a business entity in accordance with state law whenever a business entity violates the provisions of section 51-22-02.
  2. In any suit brought pursuant to the provisions of subsection 1, a business entity which has violated section 51-22-02 is liable to the person in an amount equal to the actual damages sustained by the person as a result of such violation, but in no case less than five hundred dollars.
  3. An action to enforce any liability created under this chapter may be brought in any court of competent jurisdiction within two years from the date on which the claim for relief arose.

Source:

S.L. 1981, ch. 500, § 3; 1985, ch. 82, § 125.

Collateral References.

What is computer “trade secret” under state law, 53 A.L.R.4th 1046.

CHAPTER 51-23 Commodities Transactions

51-23-01. Title.

This chapter must be known as the Commodities Act of 1989.

Source:

S.L. 1989, ch. 593, § 1.

51-23-02. Definitions.

When used in this chapter, unless the context or subject matter otherwise requires:

  1. “Board of trade” means any person or group of persons engaged in buying or selling any commodity or receiving any commodity for sale on consignment, whether the person or group of persons is characterized as a board of trade, exchange, or other form of marketplace.
  2. “CFTC rule” means any rule, regulation, or order of the commodity futures trading commission in effect on April 7, 1989.
  3. “Commissioner” means the securities commissioner of this state.
  4. “Commodity” means, except as otherwise specified by the commissioner by rule or order, any agricultural, grain, or livestock product or byproduct; any metal or mineral, including a precious metal; any gem or gemstone, whether characterized as precious, semiprecious, or otherwise; any fuel whether liquid, gaseous, or otherwise; any foreign currency; and all other goods, articles, products, or items of any kind. The term commodity does not include:
    1. A numismatic coin with a fair market value at least fifteen percent higher than the value of the metal it contains;
    2. Real property or any timber, agricultural, or livestock product grown or raised on real property and offered or sold by the owner or lessee of the real property; or
    3. Any work of art offered or sold by art dealers, at public auction or offered or sold through a private sale by the owner.
  5. “Commodity contract” means any account, agreement, or contract for the purchase or sale, primarily for speculation or investment purposes and not for use or consumption by the offeree or purchaser, of one or more commodities, whether for immediate or subsequent delivery or whether delivery is intended by the parties, and whether characterized as a cash contract, deferred shipment or deferred delivery contract, forward contract, futures contract, installment or margin contract, leverage contract, or otherwise. Any commodity contract offered or sold must, in the absence of evidence to the contrary, be presumed to be offered or sold for speculation or investment purposes. A commodity contract may not include any contract or agreement which requires, and under which the purchaser receives within twenty-eight calendar days from the payment in good funds of any portion of the purchase price, physical delivery of the total amount of each commodity to be purchased under the contract or agreement.
  6. “Commodity Exchange Act” means the act of Congress known as the Commodity Exchange Act, as amended to April 7, 1989.
  7. “Commodity futures trading commission” means the independent regulatory agency established by Congress to administer the Commodity Exchange Act.
  8. “Commodity merchant” means any of the following, as defined or described in the Commodity Exchange Act or by CFTC rule:
    1. Futures commission merchant.
    2. Commodity pool operator.
    3. Commodity trading advisor.
    4. Introducing broker.
    5. Leverage transaction merchant.
    6. An associated person of any of the foregoing.
    7. Floor broker.
    8. Any other person other than a futures association required to register with the commodity futures trading commission.
  9. “Commodity option” means any account, agreement, or contract giving a party thereto the right but not the obligation to purchase or sell one or more commodities or one or more commodity contracts, whether characterized as an option, privilege, indemnity, bid, offer, put, call, advance guaranty, decline guaranty or otherwise, but does not include an option traded on a national securities exchange registered with the United States securities and exchange commission.
  10. “Financial institution” means a bank, savings institution, or trust company organized under, or supervised under, the laws of the United States or of any state.
  11. “Offer” includes every offer to sell, offer to purchase, or offer to enter into a commodity contract or commodity option.
  12. “Person” means an individual, a corporation, a limited liability company, a partnership, an association, a joint-stock company, a trust in which the interests of the beneficiaries are evidenced by a security, an unincorporated organization, a government, or a political subdivision of a government, but does not include a contract market designated by the commodity futures trading commission or any clearinghouse thereof or a national securities exchange registered with the securities and exchange commission or any employee, officer, or director of such contract market, clearinghouse, or exchange acting solely in that capacity.
  13. “Precious metal” means the following in either coin, bullion, or other form: silver, gold, platinum, palladium, copper, and such other items as the commissioner may specify by rule or order.
  14. “Sale” or “sell” includes every sale, contract of sale, contract to sell, or disposition, for value.

Source:

S.L. 1989, ch. 593, § 1; 1993, ch. 54, § 106.

Note.

Commodity Exchange Act, see 7 USCS § 1 et seq.

51-23-03. Unlawful commodity transactions.

Except as otherwise provided in section 51-23-04 or 51-23-05, no person may sell or purchase or offer to sell or purchase any commodity under any commodity contract or under any commodity option or offer to enter into or enter into as seller or purchaser any commodity contract or any commodity option.

Source:

S.L. 1989, ch. 593, § 1.

51-23-04. Exempt person transactions.

The prohibitions in section 51-23-03 do not apply to any transaction offered by and in which any of the following persons or any employee, officer, or director thereof acting solely in that capacity is the purchaser or seller:

  1. A person registered with the commodity futures trading commission as a futures commission merchant or as a leverage transaction merchant whose activities require such registration.
  2. A person registered with the securities and exchange commission as a broker-dealer whose activities require such registration.
  3. A person affiliated with, and whose obligations and liabilities under the transaction are guaranteed by, a person referred to in subsection 1 or 2.
  4. A person who is a member of a contract market designated by the commodity futures trading commission or any clearinghouse thereof.
  5. A financial institution.
  6. A person registered under the laws of this state as a securities dealer whose activities require such registration.
  7. A public warehouseman as defined in section 60-02-01.

The exemption provided by this section does not apply to any transaction or activity which is prohibited by the Commodity Exchange Act or CFTC rule.

Source:

S.L. 1989, ch. 593, § 1.

51-23-05. Exempt transactions.

  1. The prohibitions in section 51-23-03 do not apply to the following:
    1. An account, agreement, or transaction within the exclusive jurisdiction of the commodity futures trading commission as granted under the Commodity Exchange Act.
    2. A commodity contract for the purchase of one or more precious metals which requires, and under which the purchaser receives, within twenty-eight calendar days from the payment in good funds of any portion of the purchase price, physical delivery of the quantity of the precious metals purchased by such payment, provided that, for purposes of this subdivision, physical delivery must be deemed to have occurred if, within such twenty-eight-day period, such quantity of precious metals purchased by such payment is delivered, whether in specifically segregated or fungible bulk form, into the possession of a depository, other than the seller, which is either:
      1. A financial institution;
      2. A depository the warehouse receipts of which are recognized for delivery purposes for any commodity on a contract market designated by the commodity futures trading commission;
      3. A storage facility licensed or regulated by the United States or any agency thereof; or
      4. A depository designated by the commissioner;
    3. A commodity contract solely between persons engaged in producing, processing, using commercially or handling as merchants, each commodity subject thereto, or any byproduct thereof.
    4. A commodity contract under which the offeree or the purchaser is a person referred to in section 51-23-04, an insurance company, or an investment company as defined in the Investment Company Act of 1940.
  2. The commissioner may issue rules or orders prescribing the terms and conditions of all transactions and contracts covered by the provisions of this chapter which are not within the exclusive jurisdiction of the commodity futures trading commission as granted by the Commodity Exchange Act, exempting any person or transaction from any provision of this chapter conditionally or unconditionally and otherwise implementing the provisions of this chapter for the protection of purchasers and sellers of commodities.

and such depository, or other person which itself qualifies as a depository as aforesaid, issues and the purchaser receives, a certificate, document of title, confirmation, or other instrument evidencing that such quantity of precious metals has been delivered to the depository and is being and will continue to be held by the depository on the purchaser’s behalf, free and clear of all liens and encumbrances, other than liens of the purchaser, tax liens, liens agreed to by the purchaser, or liens of the depository for fees and expenses, which have previously been disclosed to the purchaser.

Source:

S.L. 1989, ch. 593, § 1.

Note.

Commodity Exchange Act, see 7 USCS § 1 et seq.

51-23-06. Unlawful commodity activities.

  1. No person may engage in a trade or business or otherwise act as a commodity merchant unless such person:
    1. Is registered or temporarily licensed with the commodity futures trading commission for each activity constituting such person as a commodity merchant and such registration or temporary license shall not have expired, nor been suspended nor revoked; or
    2. Is exempt from such registration by virtue of the Commodity Exchange Act or of a CFTC rule.
  2. No board of trade may trade, or provide a place for the trading of, any commodity contract or commodity option required to be traded on or subject to the rules of a contract market designated by the commodity futures trading commission unless such board of trade has been so designated for such commodity contract or commodity option and such designation has not been vacated, suspended, or revoked.

Source:

S.L. 1989, ch. 593, § 1.

Note.

Commodity Exchange Act, see 7 USCS § 1 et seq.

51-23-07. Fraudulent conduct.

No person may, directly or indirectly:

  1. Cheat or defraud, or attempt to cheat or defraud, any other person or employ any device, scheme, or artifice to defraud any other person;
  2. Make any false report, enter any false record, or make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading;
  3. Engage in any transaction, act, practice, or course of business, including, without limitation, any form of advertising or solicitation, which operates or would operate as a fraud or deceit upon any person; or
  4. Misappropriate or convert the funds, security, or property of any other person;

in or in connection with the purchase or sale of, the offer to sell, the offer to purchase, the offer to enter into, or the entry into of, any commodity contract or commodity option subject to the provisions of section 51-23-03 or 51-23-04, or subdivision b or d of subsection 1 of section 51-23-05. No action may be brought under this section by the commissioner after six years from the date of the alleged violation.

Source:

S.L. 1989, ch. 593, § 1; 1995, ch. 100, § 19.

51-23-08. Liability of principals, controlling persons, and others.

  1. The act, omission, or failure of any official, agent, or other person acting for any individual, association, partnership, corporation, limited liability company, or trust within the scope of the person’s employment or office must be deemed the act, omission, or failure of such individual, association, partnership, corporation, limited liability company, or trust, as well as of such official, agent, or other person.
  2. Every person who directly or indirectly controls another person liable under any provision of this chapter, every partner, officer, or director of such other person, every person occupying a similar status or performing similar functions, and every employee of such other person who materially aids in the violation is also liable jointly and severally with and to the same extent as such other person, unless the person who is also liable by virtue of this provision sustains the burden of proof that the person did not know, and in the exercise of reasonable care could not have known, of the existence of the facts by reason of which the liability is alleged to exist.

Source:

S.L. 1989, ch. 593, § 1; 1993, ch. 54, § 106.

51-23-09. Securities laws unaffected.

Nothing in this chapter impairs, derogates, or otherwise affects the authority or powers of the commissioner under the Securities Act of 1951 or the application of any provision thereof to any person or transaction subject thereto.

Source:

S.L. 1989, ch. 593, § 1.

Cross-References.

Securities Act of 1951, see chapter 10-04.

51-23-10. Purpose.

This chapter may be construed and implemented to effectuate its general purpose to protect investors, to prevent and prosecute illegal and fraudulent schemes involving commodity contracts, and to maximize coordination with federal and other states’ law and the administration and enforcement thereof. This chapter is not intended to create any rights or remedies upon which actions may be brought by private persons against persons who violate the provisions of this chapter.

Source:

S.L. 1989, ch. 593, § 1.

51-23-11. Investigations.

  1. The commissioner may make investigations, within or without this state, as the commissioner finds necessary or appropriate to:
    1. Determine whether any person has violated, or is about to violate, any provision of this chapter or any rule or order of the commissioner.
    2. Aid in enforcement of this chapter.
  2. The commissioner may publish information concerning any violation of this chapter or any rule or order of the commissioner.
  3. For purposes of any investigation or proceeding under this chapter, the commissioner or any officer or employee designated by rule or order, may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, agreements, or other documents or records which the commissioner finds to be relevant or material to the inquiry.
    1. If a person does not give testimony or produce the documents required by the commissioner or a designated employee pursuant to an administrative subpoena, the commissioner or designated employee may apply for a court order compelling compliance with the subpoena or the giving of the required testimony.
    2. The request for order of compliance may be addressed to either:
      1. The district court of Burleigh County, North Dakota, or the district court of any county in this state, where service may be obtained on the person refusing to testify or produce, if the person is within this state; or
      2. The appropriate court of the state having jurisdiction over the person refusing to testify or produce, if the person is outside this state.

Source:

S.L. 1989, ch. 593, § 1.

51-23-12. Enforcement of chapter.

  1. If the commissioner believes, whether or not based upon an investigation conducted under section 51-23-11, that any person has engaged or is about to engage in any act or practice constituting a violation of any provision of this chapter or any rule or order hereunder, the commissioner may:
    1. Issue a cease and desist order;
    2. Issue an order imposing a civil penalty in an amount which may not exceed ten thousand dollars for any single violation or one hundred thousand dollars for multiple violations in a single proceeding or a series of related proceedings; and
    3. Initiate any of the actions specified in subsection 2.
  2. The commissioner may institute any of the following actions in the appropriate courts of this state, or in the appropriate courts of another state, in addition to any legal or equitable remedies otherwise available:
    1. A declaratory judgment;
    2. An action for a prohibitory or mandatory injunction to enjoin the violation and to ensure compliance with this chapter or any rule or order of the commissioner;
    3. An action for disgorgement; and
    4. An action for appointment of a receiver or conservator for the defendant or the defendant’s assets.

Source:

S.L. 1989, ch. 593, § 1.

51-23-13. Power of court to grant relief.

    1. Upon a proper showing by the commissioner that a person has violated, or is about to violate, any provision of this chapter or any rule or order of the commissioner, the district court of Burleigh County, North Dakota, may grant appropriate legal or equitable remedies.
    2. Upon showing of violation of this chapter or a rule or order of the commissioner, the court, in addition to traditional legal and equitable remedies, including temporary restraining orders, permanent or temporary prohibitory or mandatory injunctions, and writs of prohibition or mandamus, may grant the following special remedies:
      1. Imposition of a civil penalty in an amount that may not exceed ten thousand dollars for any single violation or one hundred thousand dollars for multiple violations in a single proceeding or a series of related proceedings;
      2. Disgorgement;
      3. Declaratory judgment;
      4. Restitution to investors wishing restitution; and
      5. Appointment of a receiver or conservator for the defendant or the defendant’s assets.
    3. Appropriate remedies when the defendant is shown only about to violate this chapter or a rule or order of the commissioner must be limited to:
      1. A temporary restraining order;
      2. A temporary or permanent injunction;
      3. A writ of prohibition or mandamus; and
      4. An order appointing a receiver or conservator for the defendant or the defendant’s assets.
  1. The court may not require the commissioner to post a bond in any official action under this chapter.
    1. Upon a proper showing by the commissioner or securities or commodity agency of another state that a person other than a government or governmental agency or instrumentality has violated, or is about to violate, any provision of the commodity code of that state or any rule or order of the administrator or securities or commodity agency of that state, the district court of Burleigh County, North Dakota, may grant appropriate legal and equitable remedies.
    2. Upon showing of a violation of the securities or commodity act of the foreign state or a rule or order of the administrator or securities or commodity agency of the foreign state, the court, in addition to traditional legal or equitable remedies including temporary restraining orders, permanent or temporary prohibitory or mandatory injunctions, and writs of prohibition or mandamus, may grant the following special remedies:
      1. Disgorgement; and
      2. Appointment of a receiver, conservator, or ancillary receiver or conservator for the defendant or the defendant’s assets located in this state.
    3. Appropriate remedies when the defendant is shown only about to violate the securities or commodity act of the foreign state or a rule or order of the administrator or securities or commodity agency of the foreign state must be limited to:
      1. A temporary restraining order;
      2. A temporary or permanent injunction;
      3. A writ of prohibition or mandamus; and
      4. An order appointing a receiver, conservator, or ancillary receiver or conservator for the defendant or the defendant’s assets located in this state.

Source:

S.L. 1989, ch. 593, § 1.

51-23-14. Criminal penalties.

  1. Any person who willfully violates any provision of this chapter, or any rule or order of the commissioner under this chapter, is guilty of a class B felony.
  2. Any person convicted of violating a rule or order under this chapter may be fined, but may not be imprisoned, if the person proves the person had no knowledge of the rule or order.

Source:

S.L. 1989, ch. 593, § 1.

51-23-15. Administration of chapter.

  1. This chapter must be administered by the securities commissioner.
  2. Neither the commissioner nor any employees of the commissioner may use any information which is filed with or obtained by the commissioner which is not public information for personal gain or benefit, nor may the commissioner nor any employees of the commissioner conduct any securities or commodity dealings whatsoever based upon any such information, even though public, if there has not been a sufficient period of time for the securities or commodity markets to assimilate such information.
    1. Except as provided in subdivision b, all information collected, assembled, or maintained by the commissioner is public information and is available for the examination of the public.
    2. The commissioner may keep confidential information obtained in private investigations pursuant to this chapter and information obtained from federal agencies which may not be disclosed under federal law.
    3. No provision of this chapter either creates or derogates any privilege which exists at common law, by statute, or otherwise when any documentary or other evidence is sought under subpoena directed to the commissioner or any employee of the commissioner.

Source:

S.L. 1989, ch. 593, § 2.

51-23-16. Cooperation with other agencies.

  1. To encourage uniform application and interpretation of this chapter and securities regulation and enforcement in general, the commissioner and the employees of the commissioner may cooperate, including bearing the expense of the cooperation, with the securities agencies or administrator of another jurisdiction, Canadian province or territory or such other agencies administering this chapter, the commodity futures trading commission, the securities and exchange commission, any self-regulatory organization established under the Commodity Exchange Act or the Securities Exchange Act of 1934, any national or international organization of commodities or securities officials or agencies, and any governmental law enforcement agency.
  2. The cooperation authorized by subsection 1 includes, but need not be limited to, the following:
    1. Making joint examinations or investigations;
    2. Holding joint administrative hearings;
    3. Filing and prosecuting joint litigation;
    4. Sharing and exchanging personnel;
    5. Sharing and exchanging information and documents;
    6. Formulating and adopting mutual regulations, statements of policy, guidelines, proposed statutory changes, and releases; and
    7. Issuing and enforcing subpoenas at the request of the agency administering this chapter in another jurisdiction, the securities agency of another jurisdiction, the commodity futures trading commission, or the securities and exchange commission if the information sought would also be subject to lawful subpoena for conduct occurring in this state.

Source:

S.L. 1989, ch. 593, § 2.

Note.

Commodity Exchange Act, see 7 USCS § 1 et seq.

Securities Exchange Act of 1934, see 15 USCS 78a et seq.

51-23-17. General authority to adopt rules, forms, and orders.

  1. In addition to specific authority granted elsewhere in this chapter, the commissioner may make, amend, and rescind rules and orders as are necessary to carry out the provisions of this chapter.
  2. No provision of this chapter imposing any liability applies to any act done or omitted in good faith in conformity with a rule, order, or form adopted by the commissioner, notwithstanding that the rule, order, or form may later be amended, or rescinded, or be determined by judicial or other authority to be invalid for any reason.

Source:

S.L. 1989, ch. 593, § 2.

51-23-18. Consent to service of process.

When a person, including a nonresident of this state, engages in conduct prohibited or made actionable by this chapter or any rule or order of the commissioner, the engaging in the conduct constitutes the appointment of the commissioner as the person’s attorney to receive service of any lawful process in a noncriminal proceeding against the person, a successor, or personal representative, which grows out of that conduct and which is brought under this chapter or any rule or order of the commissioner with the same force and validity as if served personally.

Source:

S.L. 1989, ch. 593, § 2.

51-23-19. Scope of this chapter.

  1. Sections 51-23-03, 51-23-06, and 51-23-07 apply to persons who sell or offer to sell when an offer to sell is made in this state or an offer to buy is made and accepted in this state.
  2. Sections 51-23-03, 51-23-06, and 51-23-07 apply to persons who buy or offer to buy when an offer to buy is made in this state or an offer to sell is made and accepted in this state.
  3. For the purpose of this section, an offer to sell or to buy is made in this state, whether or not either party is then present in this state, when the offer originates from this state, or is directed by the offeror to this state and received at the place to which it is directed or at any post office in this state in the case of a mailed offer.
  4. For the purpose of this section, an offer to buy or to sell is accepted in this state when acceptance is communicated to the offeror in this state, and has not previously been communicated to the offeror, orally or in writing, outside this state; and acceptance is communicated to the offeror in this state, whether or not either party is then present in this state, when the offeree directs it to the offeror in this state, reasonably believing the offeror to be in this state, and it is received at the place to which it is directed, or at any post office in this state in the case of a mailed acceptance.
  5. An offer to sell or to buy is not made in this state when:
    1. The publisher circulates or there is circulated on the publisher’s behalf in this state any bona fide newspaper or other publication of general, regular, and paid circulation which is not published in this state or which is published in this state but has had more than two-thirds of its circulation outside this state during the past twelve months; or
    2. A radio or television program originating outside this state is received in this state.

Source:

S.L. 1989, ch. 593, § 2.

51-23-20. Procedure for entry of an order.

  1. The commissioner  shall commence an administrative proceeding under this chapter by  entering either a notice of intent to do a contemplated act or a summary  order. The notice of intent or summary order may be entered without  notice, without opportunity for hearing, and need not be supported  by findings of fact or conclusions of law, but must be in writing.
  2. Upon entry of  a notice of intent or summary order, the commissioner shall promptly  notify all interested parties that the notice or summary order has  been entered and the reasons therefor. If the proceeding is pursuant  to a notice of intent, the commissioner shall inform all interested  parties of the date, time, and place set for the hearing on the notice.  If the proceeding is pursuant to a summary order, the commissioner  shall inform all interested parties that they have thirty business  days from the entry of the order to file a written request for a hearing  on the matter with the commissioner and that the hearing will be scheduled  to commence within thirty business days after the receipt of the written  request.
  3. If the proceeding  is pursuant to a summary order, the commissioner, whether or not a  written request for a hearing is received from any interested party,  may set the matter down for hearing on the commissioner’s own  motion.
  4. If no hearing  is requested and none is ordered by the commissioner, the summary  order will automatically become a final order after thirty business  days.
  5. If a hearing  is requested or ordered, the commissioner, after extending notice  of an opportunity for hearing to all interested persons, may modify  or vacate the order or extend it until final determination.
  6. No final order  or order after hearing may be returned without:
    1. Appropriate notice  to all interested persons;
    2. Opportunity for  hearing by all interested persons; and
    3. Entry of written  findings of fact and conclusions of law.
  7. If a hearing  is requested or ordered under this section, it must be conducted in  accordance with chapter 28-32.
  8. No action may  be brought under this chapter after five years from the date that  the commissioner knew or reasonably should have known about the facts  that are the basis for the alleged violation. This subsection does  not apply to any action under section 51-23-07.

Every hearing in an administrative proceeding under this chapter must be public unless the commissioner grants a request joined in by all the respondents that the hearing be conducted privately.

Source:

S.L. 1989, ch. 593, § 2; 1995, ch. 100, § 20; 1995, ch. 313, § 7.

51-23-21. Pleading exemptions.

It is not necessary to negative any of the exemptions of this chapter in any complaint, information, or indictment, or any writ or proceeding brought under this chapter and the burden of proof of any such exemption is upon the party claiming the same.

Source:

S.L. 1989, ch. 593, § 2.

51-23-22. Affirmative defense.

It is a defense in any complaint, information, indictment, or any writ or proceeding brought under this chapter alleging a violation of section 51-23-03 based solely on the failure in an individual case to make physical delivery within the applicable time period under subsection 5 of section 51-23-02 or subdivision b of subsection 1 of section 51-23-05 if:

  1. Failure to make physical delivery was due solely to factors beyond the control of the seller, the seller’s officers, directors, partners, agents, servants, or employees, every person occupying a similar status or performing similar functions, every person who directly or indirectly controls or is controlled by the seller, or any of them, the seller’s affiliates, subsidiaries, or successors; and
  2. Physical delivery was completed within a reasonable time under the applicable circumstances.

Source:

S.L. 1989, ch. 593, § 2.

51-23-23. Remedies.

Every sale or contract for sale made in violation of this chapter, or of any rule or order issued by the commissioner under this chapter, is voidable at the election of the purchaser. The person making a sale or contract for sale, and every director, officer, salesperson, or agent of or for the person who participated or aided in any way in making the sale is jointly and severally liable to the purchaser. The purchaser may sue either to recover the full amount paid by the purchaser and any court costs, interest at a rate consistent with section 47-14-05, and reasonable attorney’s fees, less the amount of any income received on the commodities upon tender to the seller of the commodities sold or of the contracts made. If the person no longer owns the commodities, the person may sue for damages that would be recoverable upon a tender, less the value of the commodities when the purchaser disposed of the commodities and interest from the date of disposition. However:

  1. No action may be brought under this section for the recovery of the purchase price after five years from the date of the sale or contract for sale.
  2. No purchaser may claim or have the benefit of this section if the purchaser refused or failed to accept, within thirty days from the date of the offer, an offer in writing of the seller to take back the commodity contract in question and to refund the full amount paid by the purchaser, together with interest on the amount for the period from the date of payment by the purchaser to the date of repayment.
  3. This chapter does not limit any statutory or common-law right of any person in any court for any act involved in the sale of commodities.

Source:

S.L. 1995, ch. 100, § 21.

CHAPTER 51-24 Assistive Technology Device Warranties

51-24-01. Definitions.

In this chapter, unless the context otherwise requires:

  1. “Assistive technology device” means any item, piece of equipment, or product system that a consumer purchases or accepts transfer of in this state and which is used to increase, maintain, or improve the functional capabilities of individuals with disabilities.
    1. The term includes:
      1. Manual wheelchairs, motorized wheelchairs, motorized scooters, and other aids that enhance the mobility or positioning of an individual, such as positioning features, the switches and controls for any motorized or nonmotorized features, and hydraulic or nonhydraulic lifts or elevators designed to transport an individual from one location or level to another in private personal vehicles or private residences.
      2. Telephone communication devices for the deaf, assistive listening devices, and other aids that enhance an individual’s ability to hear, except for hearing instruments excluded by subdivision b.
      3. Voice-synthesized computer modules, optical scanners, talking software, braille printers, artificial larynges, voice amplification devices, alternative augmentative communication devices, and other devices that enhance an individual’s ability to communicate, except for those items excluded by subdivision b.
      4. Voice recognition computer equipment, software and hardware accommodations, switches, and other forms of alternative access to computers.
      5. Adapted environmental control units.
      6. Any other assistive device, instrument, apparatus, or any component, part, or accessory that enables an individual with a disability to perform tasks such as communicating, speaking, seeing, hearing, maneuvering, moving, walking, standing, reaching, grasping, working, sleeping, learning, or caring for oneself, or which is used or intended to be used to assist, affect, or replace the structure or any function of the body of an individual with a disability, except for those items excluded by subdivision b.
    2. The term does not include:
      1. Devices that are modified or customized pursuant to consumer design and specifications;
      2. Hearing instruments as defined in subsection 2 of section 43-33-01;
      3. Eyeglasses;
      4. A surgical implant performed by a physician or surgeon; or
      5. A restoration or dental prosthesis provided by a dentist.
  2. “Commercial lessor” means a person who is in the business of leasing assistive technology devices to consumers or who holds the lessor’s rights.
  3. “Commercial seller” means a person who is in the business of selling or manufacturing assistive technology devices.
  4. “Consumer” means:
    1. The purchaser of an assistive technology device from a commercial seller for personal use;
    2. A person to whom an assistive technology device is transferred for personal use when all express warranties have not yet expired;
    3. A person who may enforce the warranty on an assistive technology device;
    4. A person who leases an assistive technology device from a commercial lessor; or
    5. The parent or guardian of a person who is a consumer under subdivisions a through d.
    1. “In need of repair” means:
      1. A specific condition, generic defect, or malfunction that substantially impairs the use, value, or safety of an assistive technology device or any of its component parts; or
      2. The assistive technology device or a component of the assistive technology device fails to conform to:
        1. Any applicable express warranties; or
        2. Any implied warranties including the implied warranty of merchantability described in section 41-02-31 and the implied warranty of fitness for a particular purpose described in section 41-02-32.
    2. The term does not include a condition or defect that is the result of abuse or unforeseen alteration of the assistive technology device by the consumer.
  5. “Loaner” means an assistive technology device that is loaned to the user without charge while repairs are made to the user’s assistive technology device. A loaner must:
    1. Be in good working order;
    2. Perform the essential functions of the assistive technology device that is being repaired, considering the needs of the user; and
    3. Not create a threat to the safety of the user.
  6. “Manufacturer” means:
    1. A person who manufactures or assembles assistive technology devices;
    2. A person who manufactures or assembles any part of an assistive technology device; and
    3. All persons involved in the manufacture, distribution, or sales of assistive technology devices up to the final retail seller or commercial lessor.
  7. “Reasonable attempt to repair” means that, within one year after first delivery of the assistive technology device to a consumer or within the life of an express warranty, whichever is longer:
    1. The assistive technology device is presented to the commercial seller in need of repair at least four times and it is again in need of repair; or
    2. The assistive technology device is in need of repair and available to the seller for repair for at least thirty days. These thirty days may be consecutive or nonconsecutive.
  8. “Transaction costs” means expenses caused by a covered repair including the costs of a loaner.

Source:

S.L. 1997, ch. 420, § 1.

51-24-02. Express written warranties for assistive technology devices.

  1. A manufacturer who sells an assistive technology device to a consumer, either directly or through another commercial seller, shall furnish the consumer with an express written warranty to preserve and maintain the utility and performance of the assistive technology device.
  2. The express written warranty must be in effect for at least one year after first delivery of the assistive technology device to the consumer.
  3. If a manufacturer fails to furnish an express written warranty to the consumer, the assistive technology device must be covered by an express warranty that meets the requirements of this section.
  4. An express written warranty must guarantee that the assistive technology device:
    1. Has no defects in parts or performance; and
    2. Is free from any condition and defect that would substantially impair the device’s use, value, or safety to the consumer.

Source:

S.L. 1997, ch. 420, § 1.

51-24-03. Warranty claims.

  1. A consumer may present a warranty claim for an assistive technology device by:
    1. Reporting the warranty problem to the manufacturer, the commercial lessor, or the commercial seller within the life of the express warranty; and
    2. Making the assistive technology device reasonably available to the manufacturer, the commercial lessor, or the commercial seller for repair.
  2. If the terms of a warranty are invoked and a warranty claim is made, the assistive technology device must be repaired at no charge to the consumer, including parts, labor, shipping, delivery, and all other costs, regardless of whether the repairs are made after the expiration of the warranty period.
  3. The commercial seller or the commercial lessor shall provide the consumer with a loaner and with reimbursement for transaction costs to the consumer from the repair:
    1. If the repair period is expected to be at least ten days; or
    2. If the repair period is not expected to be ten days but actually is ten days or more.
  4. The costs of any warranty repair, loaner, or transaction costs due the consumer from the repair are to be borne in the first instance by the commercial seller or commercial lessor. The commercial seller and the commercial lessor may have rights to reimbursement or compensation from the manufacturer or other prior parties in the sales or distribution chain. Those rights of the commercial seller or commercial lessor are not affected by this chapter.

Source:

S.L. 1997, ch. 420, § 1.

51-24-04. Remedies — Sales.

  1. If, after a reasonable attempt to repair by the commercial seller or manufacturer, the assistive technology device is not repaired, the warranty is considered breached.
  2. If the warranty is breached, the consumer may return the assistive technology device to the commercial seller that sold the device and the consumer may choose to either:
    1. Receive a new replacement assistive technology device from the commercial seller and be reimbursed by the commercial seller for transaction costs; or
    2. Receive a full refund of the purchase price plus any finance charges from the commercial seller and be reimbursed by the commercial seller for transaction costs.
  3. The following conditions apply to the remedies in this section:
    1. The commercial seller is allowed up to thirty days after return of the original assistive technology device to pay transaction costs to the consumer and to provide the consumer with either a new replacement assistive technology device or a full refund of the purchase price plus any finance charges.
    2. If a new replacement assistive technology device is not provided or if a full refund is not paid when the consumer returns the original assistive technology device, the commercial seller must provide a loaner to the consumer to use until the commercial seller has provided to the consumer a new replacement assistive technology device or a full refund of the purchase price plus any finance charges.
    3. The consumer may not be required to deal directly with any person other than the commercial seller that sold the assistive technology device. If agreeable, the consumer may deal with the manufacturer or other prior parties in the sales or distribution chain. If the commercial seller is no longer selling assistive technology devices, the consumer may deal with the seller’s successor.
    4. The costs of a new replacement assistive technology device, a full refund, any loaner, and transaction costs due the consumer are to be borne in the first instance by the commercial seller. The commercial seller may have rights to reimbursement or compensation from the manufacturer or other prior parties in the sales or distribution chain. Those rights of the commercial seller are not affected by this chapter.

Source:

S.L. 1997, ch. 420, § 1.

51-24-05. Remedies — Leases.

  1. If, after a reasonable attempt to repair by the commercial lessor or manufacturer, the assistive technology device is not repaired, the warranty is considered breached.
  2. If the warranty is breached, the consumer may return the assistive technology device to the commercial lessor that leased the device and the consumer may choose to either:
    1. Receive a new replacement assistive technology device from the commercial lessor; or
    2. Receive a full refund from the commercial lessor of all moneys paid under the lease, including all finance charges.
  3. The following conditions apply to the remedies in this section:
    1. The commercial lessor is allowed up to thirty days after return of the original assistive technology device to provide to the consumer either a new replacement assistive technology device or a full refund of all moneys paid under the lease, including any finance charges.
    2. If a new replacement assistive technology device is not provided or if a full refund is not paid when the consumer returns the original assistive technology device, the commercial lessor shall provide a loaner to the consumer to use until the lessor has provided to the consumer a new replacement assistive technology device or a full refund of all moneys paid under the lease, including any finance charges.
    3. The consumer may not recover transaction costs and the commercial lessor may not recover for use of the assistive technology device before the return of the device on a warranty claim.
    4. The consumer may not be required to deal directly with any person other than the commercial lessor that leased the assistive technology device. If agreeable, the consumer may deal with the manufacturer or other prior parties in the leasing, sales, or distribution chain. If the commercial lessor is no longer dealing in assistive technology devices, the consumer may deal with the lessor’s successor.
    5. The costs of a new replacement assistive technology device, a full refund, and any loaner are to be borne in the first instance by the commercial lessor. The commercial lessor may have rights to reimbursement or compensation from the manufacturer or other prior parties in the leasing, sales, or distribution chain. Those rights of the commercial lessor are not affected by this chapter.

Source:

S.L. 1997, ch. 420, § 1.

51-24-06. Thirty-day return.

A commercial seller or commercial lessor who sells or leases an assistive technology device to a consumer may not refuse to accept a return of the assistive technology device within thirty days after the purchase or lease if the assistive technology device has not met the needs of the consumer.

Source:

S.L. 1997, ch. 420, § 1.

51-24-07. Sale or lease of a returned assistive technology device.

No assistive technology device returned by a consumer or lessor may be sold or leased again in this state unless full disclosure of the reasons for the return of the device is made to the consumer.

Source:

S.L. 1997, ch. 420, § 1.

51-24-08. Other remedies — Penalties.

  1. This chapter does not limit rights or remedies available to a consumer under any other law or contract.
  2. Any waiver of rights by a consumer under this chapter, any waiver of the implied warranty of merchantability for an assistive technology device, and any waiver of the implied warranty of fitness for a particular purpose for an assistive technology device is void.
  3. In addition to pursuing any other remedy, a consumer may bring an action to recover for any damages caused by a violation of this chapter. The court shall award a consumer who prevails in an action to recover damages caused by a violation of this chapter twice the amount of any pecuniary loss together with costs, disbursements, reasonable attorney’s fees, and any equitable relief that the court finds appropriate.
  4. Any right to bring a class action under this chapter is properly regulated by the judiciary. The supreme court, acting in its rulemaking capacity or otherwise, has full authority under the Constitution of North Dakota to regulate class actions.

Source:

S.L. 1997, ch. 420, § 1.

CHAPTER 51-25 Tobacco Product Manufacturer Sales

51-25-01. Definitions.

  1. “Adjusted for inflation” means increased in accordance with the formula for inflation adjustment set forth in exhibit C to the master settlement agreement.
  2. “Affiliate” means a person who directly or indirectly owns or controls, is owned or controlled by, or is under common ownership or control with, another person. Solely for purposes of this definition, the terms “owns”, “is owned”, and “ownership” mean ownership of an equity interest, or the equivalent thereof, of ten percent or more, and the term “person” means an individual, partnership, committee, association, corporation, or any other organization or group of persons.
  3. “Allocable share” means allocable share as that term is defined in the master settlement agreement.
  4. “Cigarette” means any product that contains nicotine, is intended to be burned or heated under ordinary conditions of use, and consists of or contains:
    1. Any roll of tobacco wrapped in paper or in any substance not containing tobacco;
    2. Tobacco, in any form, that is functional in the product, which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette; or
    3. Any roll of tobacco wrapped in any substance containing tobacco which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette described in subdivision a.
  5. “Master settlement agreement” means the settlement agreement and related documents entered on November 23, 1998, by the state and leading United States tobacco product manufacturers.
  6. “Qualified escrow fund” means an escrow arrangement with a federally or state chartered financial institution having no affiliation with any tobacco product manufacturer and having assets of at least one billion dollars if the arrangement requires that the financial institution hold the escrowed funds’ principal for the benefit of releasing parties and prohibits the tobacco product manufacturer placing the funds into escrow from using, accessing, or directing the use of the funds’ principal except as consistent with subdivision b of subsection 2 of section 51-25-02.
  7. “Released claims” means released claims as that term is defined in the master settlement agreement.
  8. “Releasing parties” means releasing parties as that term is defined in the master settlement agreement.
  9. “Tobacco product manufacturer” means an entity that after April 8, 1999, directly, and not exclusively through any affiliate:
    1. Manufactures cigarettes anywhere that the manufacturer intends to be sold in the United States, including cigarettes intended to be sold in the United States through an importer (except when the importer is an original participating manufacturer, as that term is defined in the master settlement agreement, which will be responsible for the payments under the master settlement agreement with respect to such cigarettes as a result of the provisions of subsection II(mm) of the master settlement agreement and which pays the taxes specified in subsection II(z) of the master settlement agreement, and provided that the manufacturer of such cigarettes does not market or advertise the cigarettes in the United States);
    2. Is the first purchaser anywhere for resale in the United States of cigarettes manufactured anywhere which the manufacturer does not intend to be sold in the United States; or
    3. Becomes a successor of an entity described in subdivision a or b.
  10. “Units sold” means the number of individual cigarettes sold in the state by the applicable tobacco product manufacturer, whether directly or through a distributor, retailer, or similar intermediary or intermediaries, during the year in question, as measured by excise taxes collected by the state on packs or “roll-your-own” tobacco containers. The state tax commissioner shall adopt rules as are necessary to ascertain the amount of state excise tax paid on the cigarettes of the tobacco product manufacturer for each year.

The term “cigarette” includes “roll-your-own”, which means any tobacco that, because of its appearance, type, packaging, or labeling is suitable for use and likely to be offered to, or purchased by, consumers as tobacco for making cigarettes. For purposes of this definition of “cigarette”, 0.09 ounces [2.556 grams] of “roll-your-own” tobacco constitutes one individual “cigarette”.

The term “tobacco product manufacturer” does not include an affiliate of a tobacco product manufacturer unless the affiliate itself falls within subdivision a, b, or c.

Source:

S.L. 1999, ch. 430, § 1; 2001, ch. 55, § 19.

Collateral References.

Validity, Construction, Application, and Effect of Master Settlement Agreement (MSA) Between Tobacco Companies and Various States, and State Statutes Implementing Agreement; Use and Distribution of MSA Proceeds. 25 A.L.R.6th 435.

51-25-02. Requirements.

A tobacco product manufacturer selling cigarettes to consumers within the state, whether directly or through a distributor, retailer, or similar intermediary or intermediaries, after April 8, 1999, must do one of the following:

  1. Become a participating manufacturer, as that term is defined in section II(jj) of the master settlement agreement, and generally perform its financial obligations under the master settlement agreement; or
    1. Place into a qualified escrow fund by April fifteenth of the year following the year in question, the following amounts, as such amounts are adjusted for inflation:
      1. 1999: $.0094241 per unit sold after April 8, 1999;
      2. 2000: $.0104712 per unit sold;
      3. For each of 2001 and 2002: $.0136125 per unit sold;
      4. For each of 2003 through 2006: $.0167539 per unit sold; and
      5. For each of 2007 and each year thereafter: $.0188482 per unit sold.
    2. A tobacco product manufacturer that places funds into escrow pursuant to subdivision a shall receive the interest or other appreciation on the funds as earned. The funds may be released from escrow only under the following circumstances:
      1. To pay a judgment or settlement on any released claim brought against the tobacco product manufacturer by the state or any releasing party located or residing in the state. Funds must be released from escrow under this paragraph in the order in which they were placed into escrow and only to the extent and at the time necessary to make payments required under the judgment or settlement;
      2. To the extent that a tobacco product manufacturer establishes that the amount it was required to place into escrow on account of units sold in the state in a particular year was greater than the master settlement agreement payments, as determined pursuant to section IX(i) of that agreement, including after final determination of all adjustments, that the manufacturer would have been required to make on account of such units sold had it been a participating manufacturer, the excess must be released from escrow and revert back to such tobacco product manufacturer; or
      3. To the extent not released from escrow under paragraph 1 or 2, funds must be released from escrow and revert back to the tobacco product manufacturer twenty-five years after the date on which they were placed into escrow.
    3. Each tobacco product manufacturer that elects to place funds into escrow pursuant to this subsection shall annually certify to the state tax commissioner that it is in compliance with this subsection. The state tax commissioner shall refer every instance of noncompliance to the attorney general. The attorney general may bring a civil action on behalf of the state against any tobacco product manufacturer that fails to place into escrow the funds required under this section. Any tobacco product manufacturer that fails in any year to place into escrow the funds required under this section must:
      1. Be required within fifteen days to place the funds into escrow as will bring it into compliance with this section. The court, upon a finding of a violation of this subdivision, may impose a civil penalty to be paid to the general fund of the state in an amount not to exceed five percent of the amount improperly withheld from escrow per day of the violation and in a total amount not to exceed one hundred percent of the original amount improperly withheld from escrow;
      2. In the case of a knowing violation, be required within fifteen days to place the funds into escrow as will bring it into compliance with this section. The court, upon a finding of a knowing violation of this subdivision, may impose a civil penalty to be paid to the general fund of the state in an amount not to exceed fifteen percent of the amount improperly withheld from escrow per day of the violation and in a total amount not to exceed three hundred percent of the original amount improperly withheld from escrow; and
      3. In the case of a second knowing violation, be prohibited from selling cigarettes to consumers within the state, whether directly or through a distributor, retailer, or similar intermediary, for a period not to exceed two years.

Each failure to make an annual deposit required under this section constitutes a separate violation.

Source:

S.L. 1999, ch. 430, § 2; 2005, ch. 444, § 1.

Note.

Section 2 of chapter 444, S.L. 2005, provides: “ SAVINGS CLAUSE. If any portion of the amendment to paragraph 2 of subdivision b of subsection 2 of section 51-25-02 in section 1 of this Act is held by a court of competent jurisdiction to be unconstitutional, then paragraph 2 is deemed to be invalidated in its entirety. If subdivision b of subsection 2 of section 51-25-02 is thereafter held by a court of competent jurisdiction to be unconstitutional, then section 1 of this Act is deemed invalidated, and paragraph 2 of subdivision b of subsection 2 of section 51-25-02 is restored as it existed on the day before the effective date of this Act. Neither any holding of unconstitutionality nor the invalidation of paragraph 2 of subdivision b of subsection 2 of section 51-25-02 affects, impairs, or invalidates any other portion of section 51-25-02 or the application of that section to any other person or circumstance and the remaining portions of section 51-25-02 at all times will continue in full force and effect.”

Ch. 51-25.1

Source:

S.L. 2021, SB2259, § 1, eff August 1, 2021.

51-25.1-01. Definitions.

As used in this chapter:

  1. “Brand family” means any style of cigarettes sold under the same trademark and differentiated from one another by means of additional modifiers or descriptors, including “menthol”, “lights”, “kings”, and “100 s”, and includes any brand name alone or in conjunction with any other word, trademark, logo, symbol, motto, selling message, recognizable pattern of colors, or any other indicia of product identification identical or similar to, or identifiable with, a previously known brand of cigarettes.
  2. “Cigarette” has the same meaning as in section 51-25-01.
  3. “Commissioner” means the tax commissioner.
  4. “Distributor” has the same meaning as in section 57-36-01.
  5. “Master settlement agreement” has the same meaning as in section 51-25-01.
  6. “Nonparticipating manufacturer” means a tobacco product manufacturer that is not a participating manufacturer.
  7. “Participating manufacturer” has the same meaning as in section II(jj) of the master settlement agreement of 1998.
  8. “Qualified escrow fund” has the same meaning as in section 51-25-01.
  9. “Tobacco product manufacturer” has the same meaning as in section 51-25-01.
  10. “Units sold” has the same meaning as in section 51-25-01.

Source:

S.L. 2021, ch. 383, § 1, eff August 1, 2021.

51-25.1-02. Certification — Directory.

  1. Before April thirtieth of each year, a tobacco product manufacturer whose cigarettes are sold in this state, whether directly or through a distributor, retailer, or similar intermediary, shall execute and deliver on a form prescribed by the attorney general a certification to the attorney general certifying under penalty of perjury that, as of the date of the certification, the tobacco product manufacturer either is a participating manufacturer or is in compliance with subsection 5 of section 51-25.1-04, subsection 2 of section 51-25-02, and any rules adopted under these provisions.
    1. The participating manufacturer shall include a list of its brand families in the participating manufacturer’s certification. The participating manufacturer shall update the list thirty calendar days before any addition to, or modification of, the participating manufacturer’s brand families by executing and delivering a supplemental certification to the attorney general. The participating manufacturer shall include an electronic mail address and facsimile number in the certification to receive any notification required by this chapter.
    2. A nonparticipating manufacturer shall include in the certification:
      1. A list of all the nonparticipating manufacturer’s brand families and the number of units sold for each brand family sold in the state during the preceding calendar year;
      2. A list of all the nonparticipating manufacturer’s brand families sold in the state during the current calendar year; and
        1. Indicate by an asterisk any brand family sold in the state during the preceding calendar year which is no longer being sold in the state as of the date of certification; and
        2. Identify by name and address any other manufacturer of the brand families in the preceding or current calendar year; and
      3. An electronic mail address and facsimile number to receive any notification required by this chapter.
    3. The nonparticipating manufacturer shall update its list of brand families thirty days before any addition to, or modification of, the nonparticipating manufacturer’s brand families by executing and delivering a supplemental certification to the attorney general.
    4. The certification of the nonparticipating manufacturer further must certify:
      1. The nonparticipating manufacturer is registered to do business in the state or has appointed a resident agent for service of process, and provided notice thereof, as required by section 51-25.1-03.
      2. The nonparticipating manufacturer has:
        1. Established and continues to maintain a qualified escrow fund; and
        2. Executed a qualified escrow agreement that has been reviewed and approved by the attorney general which governs the qualified escrow fund.
      3. The nonparticipating manufacturer is in compliance with this chapter, chapter 51-25, and any rules adopted under these chapters.
      4. With respect to a qualified escrow fund:
        1. The name, address, and telephone number of the financial institution in which the nonparticipating manufacturer has established the qualified escrow fund, and any rules adopted thereunder;
        2. The account number of the qualified escrow fund and any subaccount number for the state;
        3. The amount the nonparticipating manufacturer placed in the qualified escrow fund for cigarettes sold in the state during the preceding calendar year, the date and amount of each deposit, and any evidence or verification the attorney general deems necessary; and
        4. The amount and date of any withdrawal or transfer of funds the nonparticipating manufacturer made at any time from the qualified escrow fund or from any other qualified escrow fund into which the nonparticipating manufacturer ever made any escrow payment under subsection 5 of section 51-25.1-04, chapter 51-25, and any rules adopted under these provisions.
    5. A tobacco product manufacturer may not include a brand family in the certification unless:
      1. In the case of a participating manufacturer, the participating manufacturer affirms the brand family is the participating manufacturer’s cigarettes for purposes of calculating the participating manufacturer’s payments under the master settlement agreement for the relevant year, in the volume and shares determined under the master settlement agreement; and
      2. In the case of a nonparticipating manufacturer, the nonparticipating manufacturer affirms the brand family is to be deemed the nonparticipating manufacturer’s cigarettes for purposes of chapter 51-25.
    6. This section does not limit the state’s right to maintain that a brand family constitutes the cigarettes of a different tobacco product manufacturer for purposes of calculating payments under the master settlement agreement or for purposes of chapter 51-25.
    7. The tobacco product manufacturer shall retain all invoices and documentation of sales and other information relied on for the certification for a period of five years, unless otherwise required by law.
  2. The attorney general shall develop and publish on the attorney general’s website, a directory listing all tobacco product manufacturers that have provided current and accurate certifications conforming to the requirements of subsection 1 and all brand families listed in the certifications, except as otherwise provided in this subsection.
    1. The attorney general may not include or retain in the directory the name or brand family of any tobacco product manufacturer that fails to provide the required certification or whose certification the attorney general determines is not in compliance with subsection 1, unless the attorney general has determined the violation has been cured.
    2. A tobacco product manufacturer or brand family may be included or retained in the directory if the attorney general determines:
      1. In the case of a nonparticipating manufacturer, an escrow payment required under subsection 5 of section 51-25.1-04 or subsection 2 of section 51-25-02, for any period for any brand family, whether listed by the nonparticipating manufacturer, has not been fully paid into a qualified escrow fund governed by a qualified escrow agreement approved by the attorney general.
      2. Any outstanding final judgment, including any interest, for a violation of chapter 51-25 has not been fully satisfied for the brand family and the tobacco product manufacturer.
    3. The attorney general shall update the directory as necessary to correct mistakes, to add or remove a tobacco product manufacturer or brand family, and to keep the directory in conformity with the requirements of this chapter.
  3. The attorney general may not remove a tobacco product manufacturer or the tobacco product manufacturer’s brand family from the directory until the tobacco product manufacturer has been provided at least fifteen days’ notice of the intended action. Notice is sufficient if sent either electronically or by facsimile to the electronic mail address or facsimile number provided by the tobacco product manufacturer in the tobacco product manufacturer’s most recent certification filed under subsection 1.
  4. It is unlawful for any person to sell, offer, or possess for sale in this state, cigarettes of a tobacco product manufacturer or brand family not included in the directory.
  5. A person is deemed to have received notice that cigarettes of a tobacco product manufacturer or a brand family are not included in the directory maintained by the attorney general under subsection 2 at the time the attorney general’s website fails to list any tobacco product manufacturer or brand family in the directory or at the time the attorney general removes the tobacco product manufacturer or brand family from the directory.

Source:

S.L. 2021, ch. 383, § 1, eff August 1, 2021.

51-25.1-03. Agent for service of process.

  1. Any nonresident or foreign nonparticipating manufacturer that has not registered to do business in the state as a foreign corporation or business entity, as a condition precedent to having the nonparticipating manufacturer’s brand families included or retained in the directory, shall appoint and continually engage without interruption the services of an agent in this state to act as agent for service of process on whom all process, and any action or proceeding against the nonparticipating manufacturer concerning or arising out of the enforcement of this chapter and chapter 51-25, may be served in any manner authorized by law. This service constitutes legal and valid service of process on the nonparticipating manufacturer. The nonparticipating manufacturer shall provide the name, address, telephone number, and proof of the appointment and availability of the agent to the attorney general.
  2. The nonparticipating manufacturer shall provide notice to the attorney general no less than thirty days before termination of the authority of an agent. The nonparticipating manufacturer shall provide proof, to the satisfaction of the attorney general, of the appointment of a new agent no less than five days before the termination of an existing agent appointment. If an agent terminates an agency appointment, the nonparticipating manufacturer shall notify the attorney general of the termination within five days and shall include proof, to the satisfaction of the attorney general, of the appointment of a new agent.
  3. A nonparticipating manufacturer whose products are sold in this state, without appointing or designating an agent as required by this section, is deemed to have appointed the secretary of state as the agent and the nonparticipating manufacturer may be proceeded against in courts of this state by service of process upon the secretary of state. The appointment of the secretary of state as the agent does not satisfy the condition precedent in subsection 1 for having the nonparticipating manufacturer’s brand families included or retained in the directory.

Source:

S.L. 2021, ch. 383, § 1, eff August 1, 2021.

51-25.1-04. Reporting of information — Escrow installments.

  1. Not later than twenty days after the end of each calendar quarter, and more frequently if directed by the attorney general, a distributor shall submit information the attorney general requires to facilitate compliance with this chapter, including a list by brand family of the total number of cigarettes or, in the case of “roll-your-own”, the equivalent stick count the distributor paid the excise tax due for the cigarettes. The distributor shall maintain and make available to the attorney general all invoices and documentation of sales of all nonparticipating manufacturer cigarettes and any other information relied upon in reporting to the attorney general for a period of five years. The distributor shall provide the information and documentation to the commissioner, together with any other information and documentation requested by the commissioner. The commissioner shall process the information and documentation as needed by the commissioner and as needed by the attorney general for the purposes of this chapter and chapter 51-25.
  2. The commissioner may disclose to the attorney general any information in the commissioner’s possession requested by the attorney general for purposes of determining compliance with and enforcement of this chapter. The commissioner and attorney general may share the information received under this chapter, and may share the information with a federal, state, or local agency for purposes of enforcement of chapter 51-25, this chapter, or any equivalent law of another state.
  3. The attorney general may require from the nonparticipating manufacturer, at any time, proof from the financial institution in which the nonparticipating manufacturer has established a qualified escrow fund for the purpose of compliance with subsection 2 of section 51-25-02 of the amount of money in the qualified escrow fund, exclusive of interest, being held on behalf of the state, and the amount and date of each deposit to, and withdrawal from, the qualified escrow fund.
  4. In addition to the information required to be submitted under chapter 51-25 and this chapter, the attorney general may require a distributor or tobacco product manufacturer to submit any additional information, including samples of packaging or labeling of a brand family, as necessary to enable the attorney general to determine whether a tobacco product manufacturer is or will continue to be in compliance with this chapter and chapter 51-25.
  5. In addition to the requirements of subsection 2 of section 51-25-02, and to promote compliance with this chapter:
    1. The attorney general may require any nonparticipating manufacturer to make escrow deposits required by subsection 2 of section 51-25-02 in quarterly installments. Any escrow deposits required to be made in quarterly installments must be deposited into a qualified escrow fund no later than thirty calendar days after the end of the quarter in which the sales were made. The failure by a nonparticipating manufacturer to make any quarterly installment required by the attorney general subjects the nonparticipating manufacturer to any penalty and other remedy provided under section 51-25.1-02 and subsection 2 of section 51-25-02.
    2. The attorney general may require production of information sufficient to enable the attorney general to determine the adequacy of each escrow deposit under this subsection and subsection 2 of section 51-25-02.

Source:

S.L. 2021, ch. 383, § 1, eff August 1, 2021.

51-25.1-05. Penalties — Remedies.

  1. In addition to any other civil or criminal remedy provided by law, upon a determination that a distributor has violated subsection 4 of section 51-25.1-02, or any rule adopted under that subsection, the attorney general may revoke the license of a distributor in the manner provided by section 57-36-04. Each sale or offer to sell cigarettes in violation of subsection 4 of section 51-25.1-02 constitutes a separate violation. For each violation, the attorney general may impose a civil penalty in an amount not to exceed five hundred percent of the retail value of the cigarettes sold or five thousand dollars, whichever is greater, upon a determination of violation of subsection 4 of section 51-25.1-02 or any rules adopted under that subsection.
  2. Any cigarettes sold, offered for sale, or possessed for sale in this state, or imported for personal consumption in this state in violation of subsection 4 of section 51-25.1-02 are deemed contraband and are subject to seizure, by a law enforcement officer, and forfeiture as follows:
    1. Upon the seizure of the cigarettes, and within two days thereafter, the law enforcement officer making the seizure shall deliver an inventory of the cigarettes seized to the person from whom the seizure was made, if known, and shall file a copy of the inventory with the attorney general.
    2. Within ten days after the date of service of the inventory, the person from whom the seizure was made, or any other person claiming an interest in the cigarettes seized, may file a demand with the attorney general for a judicial determination of the issues of whether the cigarettes seized were, or lawfully are, subject to seizure and forfeiture. Within thirty days of the date of a timely demand, the attorney general shall institute an action in the district court of the county in which the seizure was made for a determination of the issues. The action must be brought by the attorney general in the name of the state. The district court shall hear the action and determine the issues of fact and law.
    3. If a judgment of forfeiture is entered, the attorney general shall destroy the forfeited cigarettes unless the judgment is stayed pending an appeal to the supreme court.
    4. If a demand for a judicial determination is made, and in the absence of an action commenced under this section or a stipulated settlement, the attorney general shall release the seized cigarettes to the person entitled to the cigarettes.
    5. If a demand for judicial determination is not made, the seized cigarettes must be deemed forfeited to the state by operation of law and the cigarettes must be destroyed.
  3. The attorney general may seek an injunction to restrain a threatened or actual violation of subsection 4 of section 51-25.1-02 or subsections 1 or 4 of section 51-25.1-04 by any person and to compel the person to comply with this subsection. In an action brought under this section, the state is entitled to recover the costs of investigation, costs of the action, and reasonable attorney’s fees.
  4. A person may not sell, distribute, acquire, hold, own, possess, transport, import, or cause to be imported cigarettes the person knows or should know are intended for distribution or sale in the state in violation of subsection 4 of section 51-25.1-02. A violation of this subsection is a class A misdemeanor.

Source:

S.L. 2021, ch. 383, § 1, eff August 1, 2021.

51-25.1-06. Miscellaneous provisions — Penalties and remedies cumulative — Joint and several liability.

  1. Any determination by the attorney general not to include in or to remove from the directory a tobacco product manufacturer or brand family is subject to judicial review by the filing of a civil action for prospective declaratory or injunctive relief. The Burleigh County district court has exclusive jurisdiction over the civil action.
  2. A license or renewal of a license to act as a distributor may not be issued to a person unless the person certifies in writing the person will comply with this chapter.
  3. A licensed distributor shall provide to the attorney general, and update as necessary, an electronic mail address and facsimile number to receive any notification required by this chapter.
  4. The first report of a distributor required under subsection 1 of section 51-25.1-04 is due thirty days after the effective date of this chapter.
    1. The first certification of a tobacco product manufacturer described under subsection 1 of section 51-25.1-02 is due forty-five days after the effective date of this chapter.
    2. The directory described in subsection 2 of section 51-25.1-02 must be developed and made available for public inspection within one hundred twenty days after the effective date of this chapter.
  5. The attorney general and commissioner may adopt rules necessary to effect the purposes of this chapter and chapter 51-25.
  6. In any action brought by the state to enforce this chapter, the state is entitled to recover the costs of investigation, expert witness fees, costs of the action, and reasonable attorney’s fees.
  7. If a court determines a person has violated this chapter, the court shall order any profits, gain, gross receipts, or other benefit from the violation disgorged and paid to the general fund, and the court shall order payment of any taxes due under chapter 57-36.
  8. Unless otherwise provided, remedies or penalties provided by this chapter are cumulative to each other and to remedies or penalties available under all other laws of this state.
  9. If a court of competent jurisdiction finds this chapter in conflict with chapter 51-25 and the conflict cannot be harmonized, chapter 51-25 must control. If any portion of this chapter causes chapter 51-25 to no longer constitute a qualifying or model statute, as the terms are defined in the master settlement agreement, that portion of this chapter must be held to be invalid.
  10. For each nonparticipating manufacturer located outside the United States, each importer into the United States of the nonparticipating manufacturer’s brand families sold in the state has joint and several liability with the nonparticipating manufacturer for deposit of all escrow amounts due under subsection 2 of section 51-25-02 and payment of all penalties imposed under subsection 2 of section 51-25-02.

Source:

S.L. 2021, ch. 383, § 1, eff August 1, 2021.

CHAPTER 51-26 Farm Equipment Nonconformity Remedies

51-26-01. Definitions.

As used in this chapter:

  1. “Collateral charges” means those additional charges to a consumer not directly attributable to a manufacturer’s suggested retail price label for farm machinery.
  2. “Comparable farm machinery” means an identical or reasonably equivalent piece of farm machinery.
  3. “Consumer” means the purchaser, other than for the purposes of resale of new farm machinery primarily used for agricultural purposes; any person to whom the new farm machinery is transferred for the same purposes during the duration of an express warranty applicable to that new farm machinery; and any other person entitled by the terms of the warranty to enforce the obligations of the warranty.
  4. “Express warranty” means any written affirmation of fact or promise made by a manufacturer to a consumer in connection with the sale of new farm machinery which relates to the nature of the material or workmanship or will meet a specified level of performance over a specified period of time. The term does not include an implied warranty.
  5. “Farm machinery” means any self-propelled equipment or machinery used for agricultural purposes being transferred for the first time from a manufacturer, distributor, or new farm machinery dealer which has not been registered or titled and which is offered for sale, barter, or exchange by a dealer who is franchised to sell, barter, or exchange that particular make of new farm machinery. The term includes farm machinery propelled by power other than muscular power but does not include off-road vehicles other than self-propelled equipment and machinery used for agricultural purposes.
  6. “Manufacturer” means any person engaged in the manufacturing or assembling of new farm machinery as a regular business.
  7. “Nonconformity” means any condition of the farm machinery which makes it impossible to use for the purpose for which it was intended.
  8. “Reasonable allowance for consumer use” means:
    1. That amount attributable to use by the consumer before the consumer’s first report of the nonconformity to the manufacturer or its authorized dealers;
    2. That amount attributable to use by the consumer during any period subsequent to the first report of nonconformity when the farm machinery is not out of service by reason of repair of the reported nonconformity; and
    3. That amount attributable to use by the consumer of the farm machinery provided by the manufacturer or its authorized dealer while the machine is out of service by reason of repair of the reported nonconformity, but not less than the fair rental value of the farm machinery.

Source:

S.L. 2001, ch. 447, § 1.

51-26-02. Law applicable to breach of new farm machinery warranties — Report of nonconformity required — Repairs — Duty of manufacturer or agent.

Notwithstanding any other provision of law, a sale of new farm machinery is governed by this chapter. For the purposes of this chapter, if new farm machinery does not conform to all applicable express warranties and the consumer reports the nonconformity to the manufacturer or its agent during the term of the express warranties or during the period of one year following the date of original delivery of the new farm machinery to the consumer, whichever period expires earlier, the manufacturer or its agent shall make any necessary repairs to conform the new machinery to the express warranties, notwithstanding the fact that the repairs are made after the expiration of the term or the one-year period.

Source:

S.L. 2001, ch. 447, § 2.

Cross-References.

Implied warranty, see §§ 41-02-31, 41-02-32.

51-26-03. Replacement of farm machinery or refund of purchase price — Allowance deducted for consumer’s use — Refund.

If the manufacturer or its agent cannot conform the new farm machinery to any applicable express warranty by repairing or correcting any default or condition that substantially impairs the use or market value of the new farm machinery to the consumer after a reasonable number of attempts, the manufacturer shall give the consumer the option of having the manufacturer either replace the new farm machinery with a comparable new farm machinery acceptable to the consumer, or take title of the machine from the consumer and refund to the consumer the full purchase price, including all reasonably incurred collateral charges, less a reasonable allowance for the consumer’s use of the machine. The subtraction of a reasonable allowance for use shall apply when either a replacement or refund of the new farm machinery occurs. Refunds must be made to the consumer and lienholder of record, if any, as their interests may appear.

Source:

S.L. 2001, ch. 447, § 3.

51-26-04. Affirmative defenses.

  1. It is an affirmative defense to any claim under this chapter that:
    1. An alleged nonconformity does not substantially impair the use, market value, or safety of the farm machinery;
    2. A nonconformity is the result of abuse, neglect, or unauthorized modifications or alterations of farm machinery by a consumer;
    3. A claim by a consumer was not filed in good faith; or
    4. Any other affirmative defense allowed by law.
  2. It is presumed that a reasonable number of attempts have been undertaken to conform new farm machinery to the applicable express warranties if within the terms, conditions, or limitations of the express warranty, or during the period of one year following the date of original delivery of the new farm machinery to a consumer, whichever expires earlier, either:
    1. The same nonconformity has been subject to repair five or more times by the manufacturer or its agents and the nonconformity continues to exist; or
    2. The new farm machinery is out of service by reason of repair of the nonconformity by the manufacturer or its agents for a cumulative total of thirty or more working days, exclusive of downtime for routine maintenance as prescribed by the manufacturer, since delivery of the new farm machinery to the consumer. The thirty-day period may be extended by a period of time during which repair services are not available to the consumer because of conditions beyond the control of the manufacturer or its agents.

Source:

S.L. 2001, ch. 447, § 4.

51-26-05. Information on remedies to be furnished consumer — Notice of complaint to manufacturer required — Manufacturer’s duties.

  1. The manufacturer shall provide information for consumer complaint remedies with each new farm machinery. Before taking action under this chapter, a consumer shall give written notification to the manufacturer of the need for the repair of the nonconformity to allow the manufacturer an opportunity to cure the alleged defect. The manufacturer immediately shall notify the consumer of a reasonably accessible repair facility of a franchised new farm machinery dealer to conform the new farm machinery to the express warranty. After delivery of the new farm machinery to an authorized repair facility by the consumer, the manufacturer shall conform the new farm machinery to the express warranty within thirty calendar days in appropriate seasonable use times and within sixty days in other times. The agriculture commissioner shall designate appropriate seasonal use times for all machinery covered by this chapter. Upon notification from the consumer that the new farm machinery has not been conformed to the express warranty, the manufacturer shall inform the consumer if an informal dispute settlement procedure has been established by the manufacturer. If prior notice by the manufacturer of an informal dispute settlement procedure has been given, no further notice is required. If any repair that may be required under any warranty takes more than fourteen working days to complete, the manufacturer shall supply at no cost a like piece of farm machinery for use by the consumer if requested by the consumer during the time of repair. The manufacturer shall reimburse any costs incurred by a dealer under this chapter.
  2. An action brought under this chapter must be commenced within six months following expiration of the terms, conditions, or limitations of the express warranty or within eighteen months following the date of original delivery of the new farm machinery to a consumer, whichever is earlier. However, if a consumer resorts to an informal dispute settlement procedure, any action must be commenced within ninety days following the final action of any panel established pursuant to the procedure. If an action is brought under this chapter, the prevailing party may recover any court costs and reasonable attorney’s fees.

Source:

S.L. 2001, ch. 447, § 5.

51-26-06. Application — Dealers reimbursed for warranty repair.

  1. If warranty repair work or service is performed for a consumer by a farm equipment dealer under a manufacturer’s express warranty, the manufacturer shall provide the dealer with reasonable and adequate compensation for diagnostic work, as well as repair service, parts, and labor, for warranty work compensation, a product improvement program, a maintenance plan, an extended warranty, a certified preowned warranty or a service contract, issued by the manufacturer or distributor or its common entity. In addition, a manufacturer shall provide reasonable and adequate time allowances for the diagnosis and performance of warranty work and service for the work performed and the time allowances may not be less than the average time spent by the dealer on similar work for nonwarranty customers. The hourly labor rate and parts reimbursement rate paid by a manufacturer to the dealer under this subsection may not be less than the average rate charged by the dealer for similar service or sales to nonwarranty customers. A manufacturer or distributor may not pay its dealers an amount of money for warranty work, parts, or service that is less than the average rate charged by the dealer for similar service or sales to nonwarranty customers. The dealer may accept the manufacturer’s or supplier’s warranty labor reimbursement terms and conditions in lieu of the above.
  2. The compensation required under subsection 1 includes transportation services, including labor and equipment, necessary to transport equipment under warranty to perform the service and to return the equipment to the customer. If transporting the equipment to the dealership to perform the service is not mechanically or financially feasible, the compensation required under subsection 1 includes travel to and from the location of the equipment if the service or repairs are performed at the location of the equipment. Reimbursement for travel time required under this subsection may not exceed six hours.
  3. A manufacturer shall pay a dealer on a claim made by a dealer under this section within thirty days of the approval of the claim. The manufacturer shall either approve or disapprove a claim within thirty days after the claim is submitted to the manufacturer. The manufacturer may prescribe the manner in which and the forms on which the dealer must present the claim. A claim not specifically disapproved in writing within thirty days after the manufacturer receives the claim must be construed to be approved and the manufacturer shall pay the claim within thirty days.
  4. As used in this section, “farm equipment” has the same meaning as in section 51-07-01.2.

Source:

S.L. 2001, ch. 447, § 6; 2017, ch. 354, § 3, eff August 1, 2017.

CHAPTER 51-27 Commercial Electronic Mail Consumer Protection

51-27-01. Definitions. [Contingent expiration date – See note]

In this chapter, unless the context otherwise requires:

  1. “Assist the transmission” means actions taken by a person to provide substantial assistance or support that enables any person to formulate, compose, send, originate, initiate, or transmit a commercial electronic mail message when the person providing the assistance knows or consciously avoids knowing that the initiator of the commercial electronic mail message is engaged, or intends to engage, in any practice that violates chapter 51-15.
  2. “Commercial electronic mail message” means an electronic mail message sent to promote real property, goods, or services for sale or lease. The term does not mean an electronic mail message to which an interactive computer service provider has attached an advertisement in exchange for free use of an electronic mail account if the sender has agreed to such an arrangement.
  3. “Electronic mail address” means a destination, commonly expressed as a string of characters, to which electronic mail may be sent or delivered.
  4. “Identifying information” means any information that can be used to access an individual’s financial account or to obtain goods and services, including an individual’s address, birth date, social security number, driver’s license number, nondriver governmental identification number, telephone number, bank account number, student identification, credit or debit card number, personal identification number, unique biometric data, employee or payroll number, automated or electronic signature, computer image, photograph, screen name, or password. The term does not include information that is lawfully obtained from publicly available sources or from federal, state, or local government records lawfully made available to the general public.
  5. “Initiate the transmission” refers to the action by the original sender of an electronic mail message, not to the action by any intervening interactive computer service that may handle or retransmit the message, unless the intervening interactive computer service assists in the transmission of an electronic mail message when the interactive computer service knows, or consciously avoids knowing, that the person initiating the transmission is engaged, or intends to engage, in any act or practice that violates chapter 51-15.
  6. “Interactive computer service” means any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server, including a service or system that provides access to the internet and systems operated or services offered by libraries and educational institutions.
  7. “Internet domain name” refers to a globally unique, hierarchical reference to an internet host or service, assigned through centralized internet naming authorities, comprising a series of character strings separated by periods, with the right-most string specifying the top of the hierarchy.
  8. “Web page” means a location that has a single uniform resource locator with respect to the world wide web or another location that can be accessed on the internet.

Source:

S.L. 2003, ch. 439, § 1; 2007, ch. 436, § 2.

Effective Date.

The 2007 amendment of this section by section 2 of chapter 436, S.L. 2007 became effective August 1, 2007.

Note.

Section 2 of chapter 439, S.L. 2003, provides:

EXPIRATION DATE. The governor shall certify to the legislative council the effective date of any federal legislation that preempts state regulation of false, misleading, or unsolicited commercial electronic mail messages. This Act becomes ineffective upon the effective date contained in the certification of federal legislation that preempts state regulation of false, misleading, or unsolicited commercial electronic mail messages.”

51-27-01. Definitions. [Contingent effective date – See note]

Source:

S.L. 2003, ch. 439, § 1; 2007, ch. 436, § 2.

51-27-02. False or misleading messages prohibited. [Contingent expiration date – See note]

  1. A person may not initiate the transmission, conspire with another to initiate the transmission, or assist the transmission of a commercial electronic mail message from a computer located in this state or to an electronic mail address that the sender knows, or has reason to know, is held by a resident of this state that:
    1. Uses a third-party’s internet domain name without permission of the third party or otherwise misrepresents or obscures any information in identifying the point of origin or the transmission path of a commercial electronic mail message; or
    2. Contains false or misleading information in the subject line.
  2. For purposes of this section, a person knows that the intended recipient of a commercial electronic mail message is a resident of this state if that information is available, upon request, from the registrant of the internet domain name contained in the recipient’s electronic mail address.

Source:

S.L. 2003, ch. 439, § 1.

Note.

Section 2 of chapter 439, S.L. 2003, provides:

EXPIRATION DATE. The governor shall certify to the legislative council the effective date of any federal legislation that preempts state regulation of false, misleading, or unsolicited commercial electronic mail messages. This Act becomes ineffective upon the effective date contained in the certification of federal legislation that preempts state regulation of false, misleading, or unsolicited commercial electronic mail messages.”

51-27-02. False or misleading messages prohibited. [Contingent effective date – See note]

Source:

S.L. 2003, ch. 439, § 1.

51-27-03. Unpermitted or misleading electronic mail — Violation of consumer protection law. [Contingent expiration date – See note]

  1. It is a violation of chapter 51-15 to conspire with another person to initiate the transmission or to initiate the transmission of a commercial electronic mail message that:
    1. Uses a third-party’s internet domain name without permission of the third party or otherwise misrepresents or obscures any information in identifying the point of origin or the transmission path of a commercial electronic mail message; or
    2. Contains false or misleading information in the subject line.
  2. It is a violation of chapter 51-15 to assist in the transmission of a commercial electronic mail message if the person providing the assistance knows, or consciously avoids knowing, that the initiator of the commercial electronic mail message is engaged, or intends to engage, in any act or practice that violates chapter 51-15.

Source:

S.L. 2003, ch. 439, § 1.

Note.

Section 2 of chapter 439, S.L. 2003, provides:

EXPIRATION DATE. The governor shall certify to the legislative council the effective date of any federal legislation that preempts state regulation of false, misleading, or unsolicited commercial electronic mail messages. This Act becomes ineffective upon the effective date contained in the certification of federal legislation that preempts state regulation of false, misleading, or unsolicited commercial electronic mail messages.”

51-27-03. Unpermitted or misleading electronic mail — Violation of consumer protection law. [Contingent effective date – See note]

Source:

S.L. 2003, ch. 439, § 1.

51-27-04. Subject disclosure — Violation of consumer protection law. [Contingent expiration date – See note]

  1. The subject line of a commercial electronic mail message must include “ADV” as the first characters. If the message contains information that consists of material of a sexual nature that may only be viewed by an individual eighteen years of age or older, the subject line of the message must include “ADV-ADULT” as the first characters.
  2. For purposes of this section, a commercial electronic mail message does not include a message if the recipient has consented to receive or has solicited electronic mail messages from the initiator, from an organization using electronic mail to communicate exclusively with its members, from an entity which uses electronic mail to communicate exclusively with its employees or contractors, or if there is a business or personal relationship between the initiator and the recipient.
  3. For purposes of this section, a business relationship means a prior or existing relationship formed between the initiator and the recipient, with or without an exchange of consideration, on the basis of an inquiry, application, purchase, or services offered by the initiator or an affiliate or agent of the initiator. “Affiliate” means a person that directly or indirectly controls, is controlled by, or is under common control with a specified person.
  4. It is a violation of chapter 51-15 to conspire with another person to initiate the transmission or to initiate the transmission of a commercial electronic mail message that violates this section.

Source:

S.L. 2003, ch. 439, § 1.

Note.

Section 2 of chapter 439, S.L. 2003, provides:

EXPIRATION DATE. The governor shall certify to the legislative council the effective date of any federal legislation that preempts state regulation of false, misleading, or unsolicited commercial electronic mail messages. This Act becomes ineffective upon the effective date contained in the certification of federal legislation that preempts state regulation of false, misleading, or unsolicited commercial electronic mail messages.”

51-27-04. Subject disclosure — Violation of consumer protection law. [Contingent effective date – See note]

Source:

S.L. 2003, ch. 439, § 1.

51-27-05. Toll-free number. [Contingent expiration date – See note]

  1. A sender initiating the transmission of a commercial electronic mail message shall establish a toll-free telephone number, a valid sender-operated return electronic mail address, or another easy-to-use electronic method that the recipient of the commercial electronic mail message may call or access by electronic mail or other electronic means to notify the sender not to transmit any further unsolicited commercial electronic mail messages. The notification process may include the ability for the commercial electronic mail messages recipient to direct the initiator to transmit or not transmit particular commercial electronic mail messages based upon products, services, divisions, organizations, companies, or other selections of the recipient’s choice.
  2. A commercial electronic mail message must include a statement informing the recipient of a toll-free telephone number that the recipient may call, or a valid return address to which the recipient may write or access by electronic mail or another electronic method established by the initiator, notifying the sender not to transmit to the recipient any further unsolicited commercial electronic mail messages to the electronic mail address specified by the recipient, and explaining the manner in which the recipient may specify what commercial electronic mail messages the recipient does and does not want to receive.

Source:

S.L. 2003, ch. 439, § 1.

Note.

Section 2 of chapter 439, S.L. 2003, provides:

EXPIRATION DATE. The governor shall certify to the legislative council the effective date of any federal legislation that preempts state regulation of false, misleading, or unsolicited commercial electronic mail messages. This Act becomes ineffective upon the effective date contained in the certification of federal legislation that preempts state regulation of false, misleading, or unsolicited commercial electronic mail messages.”

51-27-05. Toll-free number. [Contingent effective date – See note]

Source:

S.L. 2003, ch. 439, § 1.

51-27-06. Violations — Damages. [Contingent expiration date – See note]

  1. Damages to the recipient of a commercial electronic mail message sent in violation of this chapter are five hundred dollars, or actual damages, whichever is greater.
  2. Damages to an interactive computer service resulting from a violation of this chapter are one thousand dollars, or actual damages, whichever is greater.

Source:

S.L. 2003, ch. 439, § 1.

Note.

Section 2 of chapter 439, S.L. 2003, provides:

EXPIRATION DATE. The governor shall certify to the legislative council the effective date of any federal legislation that preempts state regulation of false, misleading, or unsolicited commercial electronic mail messages. This Act becomes ineffective upon the effective date contained in the certification of federal legislation that preempts state regulation of false, misleading, or unsolicited commercial electronic mail messages.”

51-27-06. Violations — Damages. [Contingent effective date – See note]

Source:

S.L. 2003, ch. 439, § 1.

51-27-07. Blocking of commercial electronic mail by interactive computer service — Immunity from liability. [Contingent expiration date – See note]

  1. An interactive computer service may block the receipt or transmission through its service of any commercial electronic mail that it reasonably believes is, or will be, sent in violation of this chapter.
  2. An interactive computer service may not be held liable for any action voluntarily taken in good faith to block the receipt or transmission through its service of any commercial electronic mail which it reasonably believes is, or will be, sent in violation of this chapter.

Source:

S.L. 2003, ch. 439, § 1.

Note.

Section 2 of chapter 439, S.L. 2003, provides:

EXPIRATION DATE. The governor shall certify to the legislative council the effective date of any federal legislation that preempts state regulation of false, misleading, or unsolicited commercial electronic mail messages. This Act becomes ineffective upon the effective date contained in the certification of federal legislation that preempts state regulation of false, misleading, or unsolicited commercial electronic mail messages.”

51-27-07. Blocking of commercial electronic mail by interactive computer service — Immunity from liability. [Contingent effective date – See note]

Source:

S.L. 2003, ch. 439, § 1.

51-27-08. Nonexclusive causes of action, remedies, and penalties. [Contingent expiration date – See note]

The remedies, duties, prohibitions, and penalties of this chapter are not exclusive and are in addition to all other causes of action, remedies, and penalties in chapter 51-15 or otherwise provided by law.

Source:

S.L. 2003, ch. 439, § 1.

Note.

Section 2 of chapter 439, S.L. 2003, provides:

EXPIRATION DATE. The governor shall certify to the legislative council the effective date of any federal legislation that preempts state regulation of false, misleading, or unsolicited commercial electronic mail messages. This Act becomes ineffective upon the effective date contained in the certification of federal legislation that preempts state regulation of false, misleading, or unsolicited commercial electronic mail messages.”

51-27-08. Nonexclusive causes of action, remedies, and penalties. [Contingent effective date – See note]

Source:

S.L. 2003, ch. 439, § 1.

51-27-09. Relationship to federal law. [Contingent expiration date – See note]

If any federal law is enacted that regulates false, misleading, or unsolicited commercial electronic mail messages, but does not preempt state law on the subject, the federal law supersedes any conflicting provision of this chapter.

Source:

S.L. 2003, ch. 439, § 1.

Note.

Section 2 of chapter 439, S.L. 2003, provides:

EXPIRATION DATE. The governor shall certify to the legislative council the effective date of any federal legislation that preempts state regulation of false, misleading, or unsolicited commercial electronic mail messages. This Act becomes ineffective upon the effective date contained in the certification of federal legislation that preempts state regulation of false, misleading, or unsolicited commercial electronic mail messages.”

51-27-09. Relationship to federal law. [Contingent effective date – See note]

Source:

S.L. 2003, ch. 439, § 1.

51-27-10. Fraudulent or misleading communications — Penalty.

  1. A person is guilty of a class C felony if, with intent to defraud or injure an individual, or with knowledge that the person is facilitating a fraud or injury to be perpetrated by any other person:
    1. The actor makes any communication that is not true and is calculated to mislead by purporting to be by or on behalf of another person without the authority or approval of that person; and
    2. The actor uses that communication to induce, request, or solicit the individual to provide property or identifying information.
  2. A person is guilty of a class C felony if, with intent to defraud or injure an individual, or with knowledge that a person is facilitating a fraud or injury to be perpetrated by any other person:
    1. The actor creates or operates a web page that falsely represents the actor as being associated with another person without the authority or approval of that person and the web page may induce a user of the internet to provide property or identifying information; or
    2. The actor alters a setting on a user’s computer or similar device or software program through which the user may search the internet, the alteration causes the user to view a communication that falsely represents the actor as being associated with another person, and the communication has been created or is operated without the authority or approval of the other person and induces, requests, or solicits the user to provide property or identifying information.

Source:

S.L. 2007, ch. 436, § 3.

Note.

The act creating this section did not apply the expiration date provision applicable to the remainder of the chapter.

CHAPTER 51-28 Telephone Solicitations

51-28-01. Definitions.

In this chapter, unless the context or subject matter otherwise requires, the terms shall have the meanings as follows:

  1. “Automatic dialing-announcing device” means a device that selects and dials telephone numbers and that, working alone or in conjunction with other equipment, disseminates a prerecorded or synthesized voice message to the telephone number called.
  2. “Caller” means a person, corporation, firm, partnership, association, or legal or commercial entity that attempts to contact, or that contacts, a subscriber in this state by using a telephone or a telephone line.
  3. “Caller identification service” means a telephone service that permits telephone subscribers to see the telephone number of incoming telephone calls.
  4. “Established business relationship” means a relationship between a seller and consumer based on a free trial newspaper subscription or on the consumer’s purchase, rental, or lease of the seller’s goods or services or a financial transaction between the consumer and seller, within the twenty-four months immediately preceding the date of a telemarketing call.
  5. “Message” means any telephone call, including voice, text, or other electronic communication, regardless of its content.
  6. “Subscriber” means a person who has subscribed to a residential telephone line or the other persons living or residing with the subscribing person.
  7. “Telephone line” means a telephone service to a subscriber, regardless of the technology used to provide such service, including traditional wireline or cable telephone service; cellular, broadband PCS, or other wireless telephone service; microwave, satellite, or other terrestrial telephone service; and voice over internet protocol telephone service.
  8. “Telephone solicitation” means any voice, text, or other electronic communication over a telephone line for the purpose of encouraging charitable contributions, or the purchase or rental of, or investment in, property, goods, services, or merchandise, including as defined in subsection 3 of section 51-15-01, whether the communication is made by a live operator, through the use of an automatic dialing-announcing device, or by other means. Telephone solicitation does not include communications:
    1. To any subscriber with that subscriber’s prior express written request, consent, invitation, or permission.
    2. By or on behalf of any person with whom the subscriber has an established personal or business relationship.
    3. By or on behalf of a charitable organization that is exempt from federal income taxation under section 501 of the Internal Revenue Code, but only if the following applies:
      1. The telephone call is made by a volunteer or employee of the charitable organization; and
      2. The person who makes the telephone call immediately discloses the following information upon making contact with the consumer:
        1. The person’s true first and last name; and
        2. The name, address, and telephone number of the charitable organization.
    4. By or on behalf of any person whose exclusive purpose is to poll or solicit the expression of ideas, opinions, or votes, unless the communication is a text message.
    5. By the individual soliciting without the intent to complete, and who does not in fact complete, the sales presentation during the call, but who will complete the sales presentation at a later face-to-face meeting between the individual solicitor or person who makes the initial call and the prospective purchaser, unless the communication is a text message.
    6. By or on behalf of a political party, candidate, or other group with a political purpose, as defined in section 16.1-08.1-01, unless the communication is a text message.

Source:

S.L. 2003, ch. 438, § 1; 2007, ch. 437, § 1; 2013, ch. 389, § 4.

Effective Date.

The 2013 amendment of this section by section 4 of chapter 389, S.L. 2013 became effective August 1, 2013.

The 2007 amendment of this section by section 1 of chapter 437, S.L. 2007 became effective April 5, 2007, pursuant to an emergency clause in section 2 of chapter 437, S.L. 2007.

Notes to Decisions

Constitutionality.

Where the exemption under N.D.C.C. § 51-28-01(7) (now N.D.C.C. § 51-28-01(8)) of charitable telephone solicitations from the prohibition against solicitations to residents on the state’s do-not-call registry only applied if the charitable solicitation was made by a volunteer or employee of the charitable organization, the exclusion of professional solicitors from the exemption was not unconstitutional; the content-neutral statute significantly furthered the state’s interest in residential privacy, did not substantially limit charitable solicitations, did not preclude alternative means of solicitation, and was not overbroad. FOP v. Stenehjem, 431 F.3d 591, 2005 U.S. App. LEXIS 26646 (8th Cir. N.D. 2005), cert. denied, 547 U.S. 1129, 126 S. Ct. 2058, 164 L. Ed. 2d 781, 2006 U.S. LEXIS 3907 (U.S. 2006).

51-28-02. Use of prerecorded or synthesized voice messages.

A caller may not use or connect to a telephone line an automatic dialing-announcing device or deliver a prerecorded or synthesized voice message to a subscriber unless the subscriber has knowingly requested, consented to, permitted, or authorized receipt of the message or the message is immediately preceded by a live operator who obtains the subscriber’s consent before the message is delivered. This section and section 51-28-05 do not apply to a message from a public safety agency notifying a person of an emergency; a message from a school district to a student, a parent, or an employee; a message to a subscriber with whom the caller has a current business relationship; or a message advising an employee of a work schedule.

Source:

S.L. 2003, ch. 438, § 1; 2005, ch. 445, § 1; 2013, ch. 389, § 5.

Effective Date.

The 2013 amendment of this section by section 5 of chapter 389, S.L. 2013 became effective August 1, 2013.

Notes to Decisions

No Federal Preemption.

Telephone Consumer Protection Act of 1991, 47 U.S.C.S. § 227, does not preempt the application of N.D.C.C. § 51-28-02 to automated political polling calls made from Virginia to residents in North Dakota; thus, summary judgment finding a telemarketer to be in violation of the North Dakota statute was affirmed. State ex rel. Stenehjem v. FreeEats.com, Inc., 2006 ND 84, 712 N.W.2d 828, 2006 N.D. LEXIS 87 (N.D.), cert. denied, 549 U.S. 953, 127 S. Ct. 383, 166 L. Ed. 2d 270, 2006 U.S. LEXIS 7525 (U.S. 2006).

Collateral References.

2006 to 2007 A.L.R. United States Supreme Court Review. 26 A.L.R.6th 659.

51-28-03. Message requirements.

When the message is immediately preceded by a live operator, the operator must disclose at the outset of the message:

  1. The name of the business, firm, organization, association, partnership, or entity for which the message is being made;
  2. The purpose of the message;
  3. The identity or kinds of goods or services the message is promoting; and
  4. If applicable, the fact that the message intends to solicit payment or commitment of funds.

Source:

S.L. 2003, ch. 438, § 1.

51-28-04. Requirements on automatic dialing-announcing devices.

A caller may not use an automatic dialing-announcing device unless the device is designed and operated so as to disconnect within ten seconds after termination of the telephone call by the subscriber. A caller may not use an automatic dialing-announcing device that uses a random or sequential number generator unless the equipment excludes calls to the following telephone numbers:

  1. Emergency telephone numbers, including 911, of any hospital, medical physician, health care facility, ambulance or emergency medical provider, fire protection facility, or law enforcement agency.
  2. Any guest room or patient room of a hospital, health care facility, elderly care home, or similar establishment.
  3. A paging service, a cellular telephone service, a specialized mobile radio service, or any service for which the called party is charged for the call.
  4. The telephone numbers maintained on a do-not-call list established pursuant to section 51-28-09.

Source:

S.L. 2003, ch. 438, § 1.

51-28-05. Time of day limit.

A caller may not use an automatic dialing-announcing device nor make any telephone solicitation before eight a.m. or after nine p.m. at the telephone subscriber’s location.

Source:

S.L. 2003, ch. 438, § 1.

51-28-06. Prohibited telephone solicitations.

A caller may not make or cause to be made any telephone solicitation to the telephone line of any subscriber in this state who, for at least thirty-one days before the date the call is made, has been on the do-not-call list established and maintained or used by the attorney general under section 51-28-09 or the national do-not-call registry established and maintained by the federal trade commission under title 16, Code of Federal Regulations, part 310.

Source:

S.L. 2003, ch. 438, § 1; 2005, ch. 443, § 6.

51-28-07. Identification by caller.

Any caller who makes a telephone solicitation to a subscriber in this state shall immediately and clearly state at the beginning of the call the caller’s true first and last name, the caller’s telephone number, the caller’s city and state of location, and the name of the business on whose behalf the telephone solicitation is made.

Source:

S.L. 2003, ch. 438, § 1.

51-28-08. Interference with caller identification.

A caller who makes a telephone solicitation to a subscriber in this state may not knowingly use any method to block or otherwise deliberately circumvent the subscriber’s use of a caller identification service.

Source:

S.L. 2003, ch. 438, § 1.

51-28-08.1 Telephone caller identification system fraud — Exceptions — Definitions.

  1. A person may not, in connection with any telecommunications service or internet protocol enabled voice service, knowingly cause any telephone caller identification system to:
    1. Transmit misleading or inaccurate caller identification information with the intent to defraud or cause harm; or
    2. Use or display a telephone number the caller does not own or has not received consent to use from the owner of the telephone number.
  2. This section does not apply to:
    1. The blocking of caller identification information;
    2. A law enforcement agency of the federal, state, county, or municipal government;
    3. An intelligence or security agency of the federal government;
    4. A telecommunications, broadband, or voice over internet protocol service provider acting solely as an intermediary for the transmission of telephone service between the caller and the recipient;
    5. Activity engaged in under a court order that specifically authorizes the use of caller manipulation; or
    6. A caller who, based on the telephone number called, reasonably believes the recipient of the call is not physically within the state.
  3. Any person who receives a call in violation of subsection 1 may bring a civil action in a court of this state in the county in which the call recipient resides to enjoin such action, or for damages, or both. If the plaintiff prevails, the court must award the plaintiff the plaintiff’s actual damages or damages in an amount not less than five thousand dollars and not more than ten thousand dollars per violation, whichever is greater. Each call is a separate violation under this chapter. The court shall award the plaintiff’s costs, expenses, and reasonable attorney’s fees. The relief provided in this section is in addition to all remedies available to the attorney general under this chapter in any investigation or action brought by the attorney general against the caller in the plaintiff’s private action. This section may not be interpreted to limit any other claims the person may have against the caller or any other claims the attorney general may bring under this chapter, chapter 51-15, or any other state or federal laws.
  4. In addition to the remedies and penalties provided in this chapter, a person violating subsection 1 is guilty of a class A misdemeanor, and the venue must be in the county in which the call recipient received the call or the county in which the call recipient resides.
  5. As used in this section:
    1. “Call” means any type of telephonic communication made using a public switched telephone network, wireless cellular telephone service, or voice over internet protocol service that has the capability of accessing users on the public switched telephone network or a successor network.
    2. “Caller” means a person that places a call, whether by telephone, over a telephone line, or on a computer.
    3. “Defraud” means taking anything of value, including money, property, or time, without consent from the recipient of a call.
    4. “Telephone caller identification system” means a listing of a caller’s name, telephone number, or name and telephone number shown to a recipient of a call when it is received.

Source:

S.L. 2019, ch. 423, § 1, eff August 1, 2019.

Notes to Decisions

Constitutionality.

North Dakota’s Anti-Spoofing Act had the practical effect of regulating interstate commerce because it was impossible for plaintiffs to determine whether a call recipient was physically within North Dakota. N.D.C.C. § 51-28-08.1, therefore, violated U.S. Const. art. I, § 8, cl.3. SpoofCard, LLC v. Burgum, 499 F. Supp. 3d 647, 2020 U.S. Dist. LEXIS 233980 (D.N.D. 2020).

51-28-09. Establishment of do-not-call list — Federal trade commission do-not-call registry.

  1. The attorney general shall establish and maintain a list of telephone numbers of subscribers who object to receiving telephone solicitations. The attorney general may fulfill the requirements of this section by contracting with an agent for the establishment and maintenance of the list or by using the national do-not-call registry established and maintained by the federal trade commission under title 16, Code of Federal Regulations, part 310. The attorney general may adopt rules governing the establishment, distribution, and operation of the do-not-call list, as the attorney general deems necessary and appropriate to fully implement the provisions of this chapter, in addition to the following provisions:
    1. Any subscriber may contact the attorney general or the attorney general’s agent and give notice, in the manner prescribed by the attorney general, that the subscriber objects to receiving telephone solicitations. The attorney general shall add the telephone number of any subscriber who gives notice of objection to the list maintained pursuant to this section.
    2. Any notice given by a subscriber under this section is effective for five years unless revoked by the subscriber. Any subsequent notices given by the same subscriber related to a different telephone number are separate from the original notice.
    3. The attorney general shall allow subscribers to give notice under this section by mail, telephone, or electronically.
    4. The attorney general shall establish the procedures by which a person wishing to make telephone solicitations may obtain access to the list. To the extent practicable, those procedures shall allow for access to paper or electronic copies of the list.
    5. The attorney general may include in the list established under this section subscribers who live in North Dakota and are included in the national do-not-call registry established and maintained by the federal trade commission under title 16, Code of Federal Regulations, part 310. The attorney general may provide to the federal trade commission the telephone numbers of North Dakota subscribers who are in the attorney general’s do-not-call list or who have otherwise notified the attorney general of the subscriber’s objection to receiving telephone solicitations for inclusion in the national do-not-call registry.
    6. A person or entity desiring to make telephone solicitations shall pay a fee, payable to the attorney general, for access to, or for paper or electronic copies of, the list established under section 51-28-09. The fee for acquisition of the list may not exceed two hundred dollars per quarter, or eight hundred dollars per year.
  2. Notwithstanding any other provision of this chapter, the attorney general may designate the national do-not-call registry established and maintained by the federal trade commission under title 16, Code of Federal Regulations, part 61, as the state do-not-call list.

Source:

S.L. 2003, ch. 438, § 1.

51-28-10. Release of information.

Information contained in the list established under section 51-28-09 may not be used for any purposes except compliance with this chapter or in a proceeding or action under this chapter or chapter 51-15. The information contained in the list is an exempt record as defined in section 44-04-17.1.

Source:

S.L. 2003, ch. 438, § 1.

51-28-11. Private enforcement.

Any person who receives a telephone solicitation or message in violation of this chapter may bring an action to enjoin such violation, or for damages, or both. The court may award the plaintiff the plaintiff’s actual damages or damages up to two thousand dollars for each violation, whichever is greater. The court may award the plaintiff costs, expenses, and reasonable attorney’s fees. This section shall not limit any other claims the person may have against the caller.

Source:

S.L. 2003, ch. 438, § 1.

51-28-12. Limitation of actions.

No action or proceeding may be brought under this chapter:

  1. More than one year after the person bringing the action knew or should have known of the alleged violation; or
  2. More than one year after the termination of any proceeding or action by the attorney general, whichever is later.

Source:

S.L. 2003, ch. 438, § 1.

51-28-13. Powers of the attorney general — Remedies — Injunction — Other relief.

When it appears to the attorney general that a person has engaged in, or is engaging in, any practice declared to be unlawful by this chapter, the attorney general, in enforcing this chapter, has all powers provided in this chapter or chapter 51-15, and may seek all remedies in this chapter or chapter 51-15.

Source:

S.L. 2003, ch. 438, § 1.

51-28-14. Cease and desist orders.

When it appears to the attorney general that a person has engaged in, or is engaging in, any practice declared to be unlawful by this chapter or by any rule or order of the attorney general issued under this chapter, the attorney general, without notice and hearing, may issue any cease and desist order which the attorney general deems necessary or appropriate in the public interest, including if any person fails or refuses to file any statement or report, or obey any subpoena issued by the attorney general under this chapter or chapter 51-15. A person aggrieved by an order issued under this section may request a hearing before the attorney general if a written request is made within ten days after the receipt of the order. An adjudicative proceeding under this section must be conducted in accordance with chapter 28-32, unless otherwise specifically provided herein.

Source:

S.L. 2003, ch. 438, § 1.

51-28-15. Civil penalties in an adjudicative proceeding.

When it appears to the attorney general that a person has engaged in, or is engaging in, any practice declared to be unlawful by this chapter or by any rule or order of the attorney general issued under this chapter, the attorney general may impose by order and collect a civil penalty against any person found in an adjudicative proceeding to have violated any provision of this chapter, or any rule or order adopted under this chapter, in an amount not more than two thousand dollars for each violation of this chapter or any rule or order adopted under this chapter. The attorney general may bring an action in district court to recover penalties under this section.

Source:

S.L. 2003, ch. 438, § 1.

51-28-16. Costs recoverable in adjudicative proceeding — Hearing costs.

If the attorney general prevails in an adjudicative proceeding pursuant to section 51-28-14 or 51-28-15, the attorney general may assess the nonprevailing person for all adjudicative proceeding and hearing costs, including reasonable attorney’s fees, investigation fees, costs, and expenses of any investigation and action brought under the provisions of this chapter.

Source:

S.L. 2003, ch. 438, § 1.

51-28-17. Civil penalties in court proceeding.

The court may award the attorney general civil penalties of not more than two thousand dollars per violation of this chapter. A violation of this chapter constitutes a violation of chapter 51-15 and the court may award civil penalties under section 51-15-11.

Source:

S.L. 2003, ch. 438, § 1.

51-28-18. Costs recoverable in court proceeding.

The attorney general is entitled to an award of reasonable attorney’s fees, investigation fees, costs, and expenses of any investigation and action brought under the provisions of this chapter.

Source:

S.L. 2003, ch. 438, § 1.

51-28-19. Separate violations — Nonexclusive remedies and penalties.

For each remedy or penalty under this chapter or chapter 51-15, or otherwise provided by law, each telephone solicitation or message shall constitute a separate violation for purposes of an adjudicative proceeding or an action in district court. The remedies, duties, prohibitions, and penalties of this chapter are not exclusive and are in addition to all other causes of action, remedies, and penalties in chapter 51-15, or otherwise provided by law.

Source:

S.L. 2003, ch. 438, § 1.

51-28-20. Caller identification service nonliability.

No provider of caller identification service shall be held liable for violations of this chapter committed by other persons or entities.

Source:

S.L. 2003, ch. 438, § 1.

51-28-21. Disposition of fees, penalties, and recoveries.

All fees, penalties, and recoveries of attorney’s fees, investigation fees, costs, and expenses collected pursuant to this chapter shall be retained by the attorney general for enforcement of this chapter, including to pay costs, expenses, and attorney’s fees and salaries incurred in the operation of the attorney general’s consumer protection and antitrust division. However, the attorney general may deposit any excess funds not required for enforcement of this chapter in the attorney general refund fund under section 54-12-18.

Source:

S.L. 2003, ch. 438, § 1.

51-28-22. Venue.

The attorney general or a plaintiff in a private enforcement action may bring an action pursuant to this chapter in either the county of the telephone subscriber’s residence or Burleigh County.

Source:

S.L. 2003, ch. 438, § 1.

CHAPTER 51-29 Gift Certificates

51-29-01. Definition.

As used in this chapter, “gift certificate” means a record evidencing a promise, made for monetary consideration, by the seller or issuer of the record that goods or services will be provided to the owner of the record to the value shown in the record. The term includes a record that contains a microprocessor chip, magnetic strip, or other means of storage of information that is prefunded and for which the value is decreased upon each use; a gift card; an electronic gift card; an online gift account; a stored-value card; a store card; a prepaid telephone card; or a similar record or card.

The term does not include a general-use prepaid card issued by a prepaid card issuer, including a plastic card or other electronic payment device that is usable at multiple, unaffiliated merchants or service providers or at an automatic teller machine, and purchased or loaded on a prepaid basis; a general-use prepaid card issued by a prepaid card issuer and purchased by a person that is not an individual; or a debit card linked to a deposit account.

Source:

S.L. 2005, ch. 446, § 1.

51-29-02. Expiration dates — Service fees.

A person may not charge additional monthly or annual service or maintenance fees on a gift certificate. A person may not limit the time for redemption of a gift certificate to a date before six years after the date of purchase of the gift certificate, place an expiration date on a gift certificate before six years after the date of purchase of the gift certificate, or include on a gift certificate any statement suggesting that an expiration or redemption date, except as permitted in this section, may apply to a gift certificate.

This section does not apply to a gift certificate distributed to a consumer pursuant to an awards, loyalty, or promotional program without any money or other thing of value being given in exchange for the gift certificate by the consumer. Any restriction or limitation on such gift certificate must be disclosed to the consumer, in writing, at the time the gift certificate is distributed to the consumer.

Source:

S.L. 2005, ch. 446, § 1.

51-29-03. Enforcement — Powers — Remedies — Penalties.

The attorney general shall enforce this chapter. In enforcing this chapter, the attorney general has all the powers provided in this chapter or chapter 51-15 and may seek all remedies in this chapter or chapter 51-15. A violation of this chapter constitutes a violation of chapter 51-15. The remedies, duties, prohibitions, and penalties of this chapter are not exclusive and are in addition to all other causes of action, remedies, and penalties as provided in chapter 51-15 and as otherwise provided by law.

Source:

S.L. 2005, ch. 446, § 1.

CHAPTER 51-30 Notice of Security Breach for Personal Information

51-30-01. Definitions.

In this chapter, unless the context or subject matter otherwise requires:

  1. “Breach of the security system” means unauthorized acquisition of computerized data when access to personal information has not been secured by encryption or by any other method or technology that renders the electronic files, media, or databases unreadable or unusable. Good-faith acquisition of personal information by an employee or agent of the person is not a breach of the security of the system, if the personal information is not used or subject to further unauthorized disclosure.
  2. “Health insurance information” means an individual’s health insurance policy number or subscriber identification number and any unique identifier used by a health insurer to identify the individual.
  3. “Medical information” means any information regarding an individual’s medical history, mental or physical condition, or medical treatment or diagnosis by a health care professional.
    1. “Personal information” means an individual’s first name or first initial and last name in combination with any of the following data elements, when the name and the data elements are not encrypted:
      1. The individual’s social security number;
      2. The operator’s license number assigned to an individual by the department of transportation under section 39-06-14;
      3. A nondriver color photo identification card number assigned to the individual by the department of transportation under section 39-06-03.1;
      4. The individual’s financial institution account number, credit card number, or debit card number in combination with any required security code, access code, or password that would permit access to an individual’s financial accounts;
      5. The individual’s date of birth;
      6. The maiden name of the individual’s mother;
      7. Medical information;
      8. Health insurance information;
      9. An identification number assigned to the individual by the individual’s employer in combination with any required security code, access code, or password; or
      10. The individual’s digitized or other electronic signature.
    2. “Personal information” does not include publicly available information that is lawfully made available to the general public from federal, state, or local government records.

Source:

S.L. 2005, ch. 447, § 3; 2013, ch. 106, § 2; 2015, ch. 352, § 1, eff August 1, 2015.

Effective Date.

The 2015 amendment of this section by section 1 of chapter 352, S.L. 2015 became effective August 1, 2015.

The 2013 amendment of this section by section 2 of chapter 106, S.L. 2013 became effective August 1, 2013.

51-30-02. Notice to attorney general and consumers.

Any person that owns or licenses computerized data that includes personal information, shall disclose any breach of the security system following discovery or notification of the breach in the security of the data to any resident of the state whose unencrypted personal information was, or is reasonably believed to have been, acquired by an unauthorized person. In addition, any person that experiences a breach of the security system as provided in this section shall disclose to the attorney general by mail or electronic mail any breach of the security system which exceeds two hundred fifty individuals. The disclosure must be made in the most expedient time possible and without unreasonable delay, consistent with the legitimate needs of law enforcement, as provided in section 51-30-04, or any measures necessary to determine the scope of the breach and to restore the integrity of the data system.

Source:

S.L. 2005, ch. 447, § 3; 2015, ch. 352, § 2, eff August 1, 2015.

Effective Date.

The 2015 amendment of this section by section 2 of chapter 352, S.L. 2015 became effective August 1, 2015.

51-30-03. Notice to owner or licensee of personal information.

Any person that maintains computerized data that includes personal information that the person does not own shall notify the owner or licensee of the information of the breach of the security of the data immediately following the discovery, if the personal information was, or is reasonably believed to have been, acquired by an unauthorized person.

Source:

S.L. 2005, ch. 447, § 3.

51-30-04. Delayed notice.

The notification required by this chapter may be delayed if a law enforcement agency determines that the notification will impede a criminal investigation. The notification required by this chapter must be made after the law enforcement agency determines that the notification will not compromise the investigation.

Source:

S.L. 2005, ch. 447, § 3.

51-30-05. Method of notice.

Notice under this chapter may be provided by one of the following methods:

  1. Written notice;
  2. Electronic notice, if the notice provided is consistent with the provisions regarding electronic records and signatures set forth in section 7001 of title 15 of the United States Code; or
  3. Substitute notice, if the person demonstrates that the cost of providing notice would exceed two hundred fifty thousand dollars, or that the affected class of subject persons to be notified exceeds five hundred thousand, or the person does not have sufficient contact information. Substitute notice consists of the following:
    1. Electronic mail notice when the person has an electronic mail address for the subject persons;
    2. Conspicuous posting of the notice on the person’s website page, if the person maintains one; and
    3. Notification to major statewide media.

Source:

S.L. 2005, ch. 447, § 3.

51-30-06. Alternate compliance.

Notwithstanding section 51-30-05, a person that maintains its own notification procedures as part of an information security policy for the treatment of personal information and is otherwise consistent with the timing requirements of this chapter is deemed to be in compliance with the notification requirements of this chapter if the person notifies subject individuals in accordance with its policies in the event of a breach of security of the system. A financial institution, trust company, or credit union that is subject to, examined for, and in compliance with the federal interagency guidance on response programs for unauthorized access to customer information and customer notice is in compliance with this chapter. A covered entity, business associate, or subcontractor subject to breach notification requirements under title 45, Code of Federal Regulations, subpart D, part 164, is considered to be in compliance with this chapter.

Source:

S.L. 2005, ch. 447, § 3; 2013, ch. 106, § 3.

Effective Date.

The 2013 amendment of this section by section 3 of chapter 106, S.L. 2013 became effective August 1, 2013.

51-30-07. Enforcement — Powers — Remedies — Penalties.

The attorney general may enforce this chapter. The attorney general, in enforcing this chapter, has all the powers provided in chapter 51-15 and may seek all the remedies in chapter 51-15. A violation of this chapter is deemed a violation of chapter 51-15. The remedies, duties, prohibitions, and penalties of this chapter are not exclusive and are in addition to all other causes of action, remedies, and penalties under chapter 51-15, or otherwise provided by law.

Source:

S.L. 2005, ch. 447, § 3.

CHAPTER 51-31 Identity Fraud

51-31-01. Definitions.

  1. “Consumer” means an individual.
  2. “Consumer report” has the same meaning as provided in 15 U.S.C. 1681a(d).
  3. “Consumer reporting agency” means any person that, for monetary fees or dues or on a cooperative nonprofit basis, regularly engages in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate or intrastate commerce for the purpose of preparing or furnishing consumer reports. The term does not include an agency that compiles and maintains files on consumers on a nationwide basis, as described in 15 U.S.C. 1681a(p), a “reseller” as defined in 15 U.S.C. 1681a(u), when engaged in the act of the reselling of consumer information or other information, or a “nationwide specialty consumer reporting agency” that maintains “check writing history” as defined in 15 U.S.C. 1681a(w)(3).
  4. “File”, when used in connection with information on any consumer, means all of the information on that consumer reported and retained by a consumer reporting agency regardless of how the information is stored.

Source:

S.L. 2005, ch. 448, § 1.

51-31-02. Initial fraud alerts.

Upon the direct request of a consumer or an individual acting on behalf of or as a personal representative of a consumer, who asserts in good faith a suspicion that the consumer has been or is about to become a victim of fraud or related crime, including identity theft, a consumer reporting agency that maintains a file on the consumer and has received appropriate proof of the identity of the requester shall include a fraud alert in the file of that consumer. The consumer reporting agency shall continue that alert along with any credit score generated in using that file, for a period of not less than ninety days beginning on the date of the request, unless the consumer or the consumer’s representative requests that the fraud alert be removed before the end of the period and the agency has received appropriate proof of the identity of the requester for that purpose.

Source:

S.L. 2005, ch. 448, § 1.

51-31-03. Extended fraud alerts.

Upon the direct request of a consumer or an individual acting on behalf of or as a personal representative of a consumer, who asserts in good faith a suspicion that the consumer has been or is about to become a victim of fraud or related crime, including identity theft, a consumer reporting agency that maintains a file on the consumer and has received appropriate proof of the identity of the requester shall:

  1. Include a fraud alert in the file of that consumer and continue that alert along with any credit score generated in using that file, during the seven-year period beginning on the date of the request, unless the consumer or the consumer’s representative requests that the fraud alert be removed before the end of that period and the agency has received appropriate proof of the identity of the requester for that purpose; and
  2. During the five-year period beginning on the date of the request, exclude the consumer from any list of consumers prepared by the consumer reporting agency and provided to any third party to offer credit or insurance to the consumer as part of a transaction that was not initiated by the consumer, unless the consumer or the consumer’s representative requests that the exclusion be rescinded before the end of that period.

Source:

S.L. 2005, ch. 448, § 1.

51-31-04. Police reports — Judicial determination of factual innocence.

  1. An individual who has learned or reasonably suspects that the individual’s personal identifying information has been unlawfully used by another, as described in section 12.1-23-11, may initiate a law enforcement investigation by contacting the local law enforcement agency that has jurisdiction over the individual’s residence or any other jurisdiction in which any part of the offense occurred. The law enforcement agency shall take a report of the matter, provide the individual with a copy of that report, and begin an investigation of the facts. If the suspected crime was committed in a different jurisdiction, the local law enforcement agency may refer the matter to the law enforcement agency where the suspected crime was committed for further investigation of the facts.
  2. An individual who reasonably believes that the individual is the victim of identity theft may petition the district court in the county in which the alleged victim resides or in which the identity theft is alleged to have occurred, or the court, on its own motion or upon application of the state’s attorney, may move for an expedited judicial determination of the individual’s factual innocence, if the perpetrator of the identity theft was arrested, cited, or convicted of a crime under the victim’s identity, if a criminal complaint has been filed against the perpetrator in the victim’s name, or if the victim’s identity has been mistakenly associated with a record of criminal conviction. Any judicial determination of factual innocence made under this section may be heard and determined upon declarations, affidavits, police reports, or other material, relevant, and reliable information submitted by the parties or ordered to be part of the record by the court. If the court determines that the petition or motion is meritorious and that there is no reasonable cause to believe that the victim committed the offense for which the perpetrator of the identity theft was arrested, cited, convicted, or subject to a criminal complaint in the victim’s name, or that the victim’s identity has been mistakenly associated with a record of criminal conviction, the court shall find the victim factually innocent of that offense. If the victim is found factually innocent, the court shall issue an order certifying that determination.
  3. After a court has issued a determination of factual innocence under this section, the court may order the name and associated personal identifying information contained in court records, files, and indexes accessible by the public deleted, sealed, or labeled to show that the data is impersonated and does not reflect the defendant’s identity.
  4. A court that has issued a determination of factual innocence under this section may vacate that determination if the petition or any information submitted in support of the petition is found to contain any material misrepresentation or fraud.

Source:

S.L. 2005, ch. 448, § 1; 2009, ch. 437, § 1.

Effective Date.

The 2009 amendment of this section by section 1 of chapter 437, S.L. 2009 became effective August 1, 2009.

51-31-05. Enforcement — Powers — Remedies — Penalties.

The attorney general may enforce this chapter. In enforcing this chapter, the attorney general has all the powers provided in this chapter or chapter 51-15 and may seek all remedies in this chapter or chapter 51-15. A violation of this chapter constitutes a violation of chapter 51-15. The remedies, duties, prohibitions, and penalties of this chapter are not exclusive and are in addition to all other causes of action, remedies, and penalties as provided in chapter 51-15 and as otherwise provided by law.

Source:

S.L. 2005, ch. 448, § 1.

CHAPTER 51-32 Remote Sales of Tobacco Products

51-32-01. Prohibited acts regarding sale of tobacco products, electronic smoking devices, or alternative nicotine products to an individual under twenty-one years of age.

  1. It is unlawful for any person in the business of selling tobacco products to take an order for a tobacco product, other than from a person who is in the business of selling tobacco products, through the mail or through any telecommunications means, including by telephone, facsimile, or the internet, if in providing for the sale or delivery of the product pursuant to the order, the person mails the product or ships the product by carrier, and the person fails to comply with each of the following procedures:
    1. Before mailing or shipping the product, the person receives from the individual who places the order the following:
      1. A copy of a valid government-issued document that provides the name, address, and date of birth of the individual; and
      2. A signed statement from the individual providing a certification that the individual:
        1. Is a smoker of legal minimum purchase age in the state;
        2. Has selected an option on the statement as to whether the individual wants to receive mailings from a tobacco company; and
        3. Understands that providing false information may constitute a violation of law.
    2. Before mailing or shipping the product, the person:
      1. Verifies the date of birth or age of the individual against a commercially available database; or
      2. Obtains a photocopy or other image of the valid, government-issued identification stating the date of birth or age of the individual placing the order.
    3. Before mailing or shipping the product, the person provides to the prospective purchaser, by electronic mail or other means, a notice that meets the requirements of section 51-32-04.
    4. In the case of an order for a product pursuant to an advertisement on the internet, the person receives payment by credit card, debit card, or check for the order before mailing or shipping the product.
      1. The person employs a method of mailing or shipping the product requiring that the individual purchasing the product:
        1. Be the addressee;
        2. Have an individual of legal minimum purchase age sign for delivery of the package; and
        3. If the individual appears to the carrier making the delivery to be under twenty-seven years of age, take delivery of the package only after producing valid government-issued identification that bears a photograph of the individual, indicates that the individual is not under the legal age to purchase cigarettes, and indicates that the individual is not younger than the age indicated on the government-issued document.
      2. The bill of lading clearly states the requirements in subdivision e and specifies that state law requires compliance with the requirements.
    5. The person notifies the carrier for the mailing or shipping, in writing, of the age of the addressee as indicated by the government-issued document.
  2. It is unlawful for any person in the business of selling electronic smoking devices or alternative nicotine products to take an order for an electronic smoking device or alternative nicotine product, other than from a person who is in the business of selling electronic smoking devices or alternative nicotine products through the mail or through any telecommunications means, including by telephone, facsimile, or the internet, if in providing for the sale or delivery of the product pursuant to the order, the person mails the product or ships the product by carrier, and the person fails to comply with each of the following procedures:
    1. Before the sale of the electronic smoking device or alternative nicotine product verifies the purchaser is at least twenty-one years of age through a commercially available database that is regularly used by business or governmental entities for the purpose of age and identity verification; and
    2. Uses a method of mailing, shipping, or delivery which requires an individual of legal minimum purchase age to sign for delivery before the electronic smoking device or alternative nicotine product is released to the purchaser.
  3. As used in subsection 2, “electronic smoking devices” and “alternative nicotine products” have the same meaning as in section 12.1-31-03.

Source:

S.L. 2005, ch. 449, § 1; 2015, ch. 111, § 5, eff August 1, 2015; 2021, ch. 108, § 4, eff April 1, 2021.

Effective Date.

The 2015 amendment of this section by section 5 of chapter 111, S.L. 2015 became effective August 1, 2015.

Collateral References.

Validity, Construction, and Application of State and Local Laws Providing for Civil Liability for Tobacco Sales or Distribution to Minors. 66 A.L.R.6th 315.

51-32-02. Rule of construction regarding common carriers.

This chapter may not be construed as imposing liability upon any common carrier, or officer or employee of the carrier, when acting within the scope of business of the common carrier.

Source:

S.L. 2005, ch. 449, § 1.

51-32-03. Electronic mail addresses.

A person taking a delivery sale order may request that a prospective purchaser provide an electronic mail address for the purchaser.

Source:

S.L. 2005, ch. 449, § 1.

51-32-04. Disclosure requirements.

The notice required under subdivision c of subsection 1 of section 51-32-01 must include:

  1. A prominent and clearly legible statement that cigarette sales to consumers below the legal minimum age are illegal;
  2. A prominent and clearly legible statement that consists of one of the warnings set forth in section 4(a)(1) of the federal Cigarette Labeling and Advertising Act [15 U.S.C. 1333(a)(1)] rotated on a quarterly basis;
  3. A prominent and clearly legible statement that sales of cigarettes are restricted to those consumers who provide verifiable proof of age in accordance with section 51-32-01; and
  4. A prominent and clearly legible statement that cigarette sales are subject to tax under sections 57-36-06 and 57-36-32, and an explanation of how the tax has been, or is to be, paid with respect to the delivery sale.

Source:

S.L. 2005, ch. 449, § 1.

51-32-05. Registration and reporting requirements.

  1. Before making a delivery sale or shipping cigarettes in connection with a sale, a person shall file with the tax commissioner a statement setting forth the person’s name, trade name, and the address of the person’s principal place of business and any other place of business.
  2. Not later than the tenth day of each month, each person that has made a delivery sale or shipped or delivered cigarettes in connection with any sale during the previous calendar month shall file with the tax commissioner a memorandum or a copy of the invoice, which provides for each delivery sale:
    1. The name and address of the individual to whom the delivery sale was made;
    2. The brand of the cigarettes that were sold in the delivery sale; and
    3. The quantity of cigarettes that were sold in the delivery sale.

Source:

S.L. 2005, ch. 449, § 1.

51-32-06. Taxes.

Each person accepting a purchase order for a delivery sale of any tobacco product shall remit to the tax commissioner any taxes due under chapter 57-36 with respect to the delivery sale. This section does not apply if the person has obtained proof, in the form of the presence of applicable tax stamps or otherwise, that the taxes already have been paid to this state.

Source:

S.L. 2005, ch. 449, § 1.

51-32-07. Penalties.

  1. Except as otherwise provided in this section, a person that violates this chapter is subject to a fine of not more than one thousand dollars. In the case of a second or subsequent violation of this chapter, the person is subject to a fine of not less than one thousand dollars nor more than five thousand dollars.
  2. Any person who knowingly violates any provision of this chapter is guilty of a class C felony.
  3. Any individual who knowingly and falsely submits a certification under paragraph 1 of subdivision e of subsection 1 of section 51-32-01 in another individual’s name is guilty of a noncriminal offense and is subject to the penalty provided under subsection 1.
  4. Any person that fails to pay any tax required in connection with a delivery sale shall pay, in addition to any other penalty, a penalty of fifty percent of the tax due but unpaid.
  5. Any cigarettes sold or attempted to be sold in a delivery sale that does not meet the requirements of this chapter are forfeited to the state and must be destroyed.

Source:

S.L. 2005, ch. 449, § 1.

51-32-08. Enforcement.

The attorney general or any person who holds a permit under 26 U.S.C. 5712 may bring an action in the appropriate court in the state to prevent or restrain a violation of this chapter by any person.

Source:

S.L. 2005, ch. 449, § 1.

Collateral References.

Validity, Construction, and Application of State and Local Laws Providing for Civil Liability for Tobacco Sales or Distribution to Minors. 66 A.L.R.6th 315.

CHAPTER 51-33 Consumer Credit Report Security Freezes

51-33-01. Definitions.

In this chapter, unless the context or subject matter otherwise requires:

  1. “Consumer report” has the same meaning as provided in 15 U.S.C. 1681(a)(d).
  2. “Consumer reporting agency” means any person that for monetary fees or dues, or on a cooperative nonprofit basis, regularly engages in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports.
  3. “Proper identification” means information sufficient to verify identity. Only if the consumer is unable to sufficiently provide self-identifying information may a consumer reporting agency require additional information concerning the consumer’s employment and personal or family history in order to verify the consumer’s identity.
  4. “Security freeze” means a notice placed in a consumer’s consumer report, at the request of the consumer and subject to certain exceptions, that prohibits the consumer reporting agency from releasing the consumer credit file or any information derived from it, without the express authorization of the consumer. If a security freeze is in place, information from a consumer’s consumer credit file may not be released to a third party without prior express authorization from the consumer. A security freeze does not prevent a consumer reporting agency from advising a third party that a security freeze is in effect with respect to the consumer report.
  5. “Victim of identity theft” means a consumer who has a copy of a valid police report, investigative report, or complaint to law enforcement evidencing that the consumer has alleged to be a victim of identity theft.

Source:

S.L. 2007, ch. 438, § 1.

Effective Date.

This chapter became effective June 1, 2007, pursuant to an emergency clause in section 3 of chapter 438, S.L. 2007.

51-33-02. Right to obtain security freeze.

A consumer may elect to place a security freeze on the consumer’s consumer credit file by making a request to a consumer reporting agency. The consumer may make the request:

  1. By mail;
  2. By telephone by providing proper identification or certain personal identification required by the consumer reporting agency; or
  3. Directly to the consumer reporting agency through a secure electronic mail connection if the connection is made available by the consumer reporting agency.

Source:

S.L. 2007, ch. 438, § 1.

51-33-03. Response of consumer reporting agency.

  1. A consumer reporting agency shall place a security freeze on a consumer’s consumer credit file no later than three business days after receiving from the consumer a request under section 51-33-02 which includes proper identification. If a victim of identity theft requests a security freeze, a consumer reporting agency shall place a security freeze on the consumer’s credit report no later than forty-eight hours after receiving:
    1. A notice under section 51-33-02; and
    2. A copy of a valid police report, investigative report, or complaint to law enforcement evidencing the identity theft victim has alleged being a victim of identity theft. The copy may be transmitted to the consumer reporting agency by mail, facsimile, or secure electronic mail connection, if the connection is made available by the consumer reporting agency.
  2. Effective August 1, 2009, if a victim of identity theft requests a security freeze, a consumer reporting agency shall place a security freeze on the consumer’s credit report no later than twenty-four hours after receiving:
    1. A notice under section 51-33-02; and
    2. A copy of a valid police report, investigative report, or complaint to law enforcement evidencing the identity theft victim has alleged being a victim of identity theft. The copy may be transmitted to the consumer reporting agency by mail, facsimile, or secure electronic mail connection, if the connection is made available by the consumer reporting agency.
  3. The consumer reporting agency, within five business days after receiving the request, shall send a written confirmation of the security freeze to the consumer and provide the consumer with a unique personal identification number or password to be used by the consumer when providing authorization for the release of the consumer’s consumer report for a specific party or period of time.
  4. When a consumer requests a security freeze, the consumer reporting agency shall disclose the process of placing and temporarily lifting a freeze, including the process for allowing access to information from the consumer’s consumer report for a specific party or period of time while the freeze is in place.

Source:

S.L. 2007, ch. 438, § 1.

51-33-04. Temporary lifting or permanent removal of the freeze.

  1. If the consumer wishes to allow the consumer’s consumer credit file to be accessed for a specific party or period of time while a freeze is in place, the consumer shall contact the consumer reporting agency, request that the freeze be temporarily lifted, and provide the following:
    1. Proper identification;
    2. The unique personal identification number or password provided by the credit reporting agency under section 51-33-03;
    3. The proper information regarding the third party who is to receive the consumer report or access the credit file or the time period for which the report or credit file is to be available to users of the consumer credit file; and
    4. A fee if applicable.
    1. A consumer reporting agency that receives a request by mail from a consumer to temporarily lift a freeze on a consumer credit file under this section shall comply with the request no later than two business days after receiving the request unless the consumer fails to provide proper identification and the unique personal identification number or password provided by the credit reporting agency under section 51-33-03.
    2. A consumer reporting agency that receives a request by telephone or through a secure electronic connection from a consumer to temporarily lift a freeze on a consumer credit file under this section shall comply with the request no later than fifteen minutes after receiving the request unless the consumer fails to provide proper identification and the unique personal identification number or password provided by the credit reporting agency under section 51-33-03 or the consumer reporting agency’s ability to remove the security freeze within fifteen minutes is prevented by:
      1. A natural disaster or act of God, including fire, earthquake, or hurricane;
      2. Unauthorized or illegal acts by a third party, including terrorism, sabotage, riot, vandalism, or a labor strike or similar labor dispute disrupting operations;
      3. Operational interruption, including electrical failure, unanticipated delay in equipment or replacement part delivery, or computer hardware or software failures inhibiting response time;
      4. Governmental action, including emergency orders or regulations or judicial or law enforcement action;
      5. Receipt of a removal request outside of normal business hours; or
      6. Maintenance of, updates to, or repair of the consumer reporting agency’s systems, whether regularly scheduled, unscheduled, or unexpected.
    3. For the purposes of this section, “normal business hours” means from six a.m. to nine-thirty p.m., central standard time or central daylight time, seven days a week, excluding holidays other than Sundays.
  2. A consumer reporting agency may develop procedures involving the use of telephone, fax, internet, or other electronic media to receive and process a request from a consumer to temporarily lift a freeze on a consumer report under this section in an expedited manner, with the goal of processing a request within fifteen minutes after the request.
  3. A consumer reporting agency shall remove or temporarily lift a freeze placed on a consumer report only in the following cases:
    1. Upon consumer request under this section; or
    2. When the consumer credit file was frozen due to a material misrepresentation of fact by the consumer. When a consumer reporting agency intends to remove a freeze on a consumer credit file under this section, the consumer reporting agency shall notify the consumer in writing at least three business days prior to removing the freeze on the consumer credit file.
  4. A security freeze remains in place until the consumer requests that the security freeze be removed. A consumer reporting agency shall remove a security freeze within three business days of receiving a request for removal from the consumer, who provides both of the following:
    1. Proper identification; and
    2. The unique personal identification number or password provided by the credit reporting agency under section 51-33-03.

Source:

S.L. 2007, ch. 438, § 1; 2009, ch. 438, § 1.

Effective Date.

The 2009 amendment of this section by section 1 of chapter 438, S.L. 2009 became effective May 1, 2009, pursuant to an emergency clause in section 3 of chapter 438, S.L. 2009.

51-33-05. Response by third party to denial of access.

When a third party requests access to a consumer report on which a security freeze is in effect, and this request is in connection with an application for credit or the opening of an account and the consumer does not allow the consumer’s consumer report to be accessed for that specific party or period of time, the third party may treat the application as incomplete.

Source:

S.L. 2007, ch. 438, § 1.

51-33-06. Nonapplicability.

Sections 51-33-01 through 51-33-05 do not apply to the use of a consumer report by any of the following:

  1. A person or entity, or a subsidiary, affiliate, or agent of that person or entity, or an assignee of a financial obligation owing by the consumer to that person or entity, or a prospective assignee of a financial obligation owing by the consumer to that person or entity in conjunction with the proposed purchase of the financial obligation, with which the consumer has or had prior to assignment an account or contract, including a demand deposit account, or to whom the consumer issued a negotiable instrument, for the purposes of reviewing the account or collecting the financial obligation owing for the account, contract, or negotiable instrument. For purposes of this subsection, “reviewing the account” includes activities related to account maintenance, monitoring, credit line increases, and account upgrades and enhancements;
  2. A subsidiary, affiliate, agent, assignee, or prospective assignee of a person to whom access has been granted under section 51-33-04 for purposes of facilitating the extension of credit or other permissible use;
  3. Any federal, state, or local governmental entity, including a law enforcement agency, court, or its agents or assigns;
  4. A private collection agency acting under a court order, warrant, or subpoena;
  5. Any person or entity for the purposes of prescreening as provided for by the Fair Credit Reporting Act [15 U.S.C. 1681 et seq.];
  6. Any person or entity administering a credit file monitoring subscription service to which the consumer has subscribed;
  7. Any person or entity for the purpose of providing a consumer with a copy of the consumer’s consumer report upon the consumer’s request;
  8. Any person or entity for use in setting or adjusting a rate, adjusting a claim, or underwriting for insurance purposes. This exemption does not determine or affect whether these uses are permitted under other law; and
  9. A consumer reporting agency for its data base or file that consists entirely of information concerning, and used solely for, one or more of the following:
    1. Criminal record information;
    2. Tenant screening;
    3. Employment screening; and
    4. Fraud prevention or detection.

Source:

S.L. 2007, ch. 438, § 1.

51-33-07. Information to government agencies not affected.

Sections 51-33-01 through 51-33-06 do not prohibit a consumer reporting agency from furnishing to a governmental agency a consumer’s name, address, former address, places of employment, or former places of employment.

Source:

S.L. 2007, ch. 438, § 1.

51-33-08. Fees.

  1. A consumer reporting agency may charge a fee not to exceed five dollars for placing or temporarily lifting a security freeze unless:
    1. The consumer is a victim of identity theft; and
    2. The consumer provides, or has already provided in connection with the security freeze, the consumer reporting agency with a valid copy of a police report or a police case number documenting the identity theft, investigative report, or complaint to a law enforcement agency.
  2. In addition to the charge, if any, permitted under this section, a consumer may be charged no more than five dollars if the consumer fails to retain the original personal identification number given to the consumer by the agency, but the consumer may not be charged for a one-time reissue of the same or a new personal identification number. The consumer may be charged no more than five dollars for subsequent instances of loss of the personal identification number. No other fees may be imposed in connection with the security freeze.

Source:

S.L. 2007, ch. 438, § 1.

51-33-09. Changes to information — Written confirmation required.

If a security freeze is in place, a consumer reporting agency may not change any of the following official information in a consumer report without sending a written confirmation of the change to the consumer within thirty days of the change being posted to the consumer’s file: name, date of birth, social security number, and address. Written confirmation is not required for technical modifications of a consumer’s official information, including name and street abbreviations, complete spellings, or transposition of numbers or letters. In the case of an address change, the written confirmation shall be sent to both the new address and to the former address.

Source:

S.L. 2007, ch. 438, § 1.

51-33-10. Security freeze not applicable to certain consumer reporting agencies.

A consumer reporting agency is not required to place a security freeze in a consumer credit file under this chapter if it acts only as a reseller of credit information by assembling and merging information contained in the database of another consumer reporting agency or multiple consumer reporting agencies and does not maintain a permanent database of credit information from which new consumer reports are produced. However, a consumer reporting agency must honor any security freeze placed on a consumer credit file by another consumer reporting agency.

Source:

S.L. 2007, ch. 438, § 1.

51-33-11. Exempt entities.

The following entities are not required to place a security freeze on a consumer credit file under this chapter:

  1. A check services or fraud prevention services company that issues reports on incidents of fraud or authorizations for the purpose of approving or processing negotiable instruments, electronic funds transfers, or similar methods of payments; and
  2. A deposit account information service company that issues reports regarding account closures due to fraud, substantial overdrafts, ATM abuse, or similar negative information regarding a consumer, to inquiring banks or other financial institutions for use only in reviewing a consumer’s request for a deposit account at the inquiring bank or financial institution.

Source:

S.L. 2007, ch. 438, § 1.

51-33-12. Notice of rights.

At any time that a consumer is required to receive a summary of rights required under 15 U.S.C. 1681g or under North Dakota law, the following notice shall be included:

North Dakota Consumers Have the Right to Obtain a Security Freeze

You may obtain a security freeze on your consumer credit file at no charge to protect your privacy and ensure that credit is not granted in your name without your knowledge. You have a right to place a “security freeze” on your consumer credit file pursuant to North Dakota law.

The security freeze will prohibit a consumer reporting agency from releasing any information in your consumer credit file without your express authorization or approval.

The security freeze is designed to prevent credit, loans, and services from being approved in your name without your consent. When you place a security freeze on your credit file, within five business days you will be provided a personal identification number or password to use if you choose to remove the freeze on your credit file or to temporarily authorize the release of your credit report or credit score for a specific party, parties, or period of time after the freeze is in place. To provide that authorization, you must contact the consumer reporting agency and provide all of the following:

  1. The unique personal identification number or password provided by the consumer reporting agency.
  2. Proper identification to verify your identity.
  3. The proper information regarding the third party or parties who are to receive the credit report or the period of time for which the report shall be available to users of the credit report.

A consumer reporting agency that receives a request from a consumer to lift temporarily a freeze shall comply with the request no later than three business days after receiving the request.

A consumer reporting agency may charge you up to five dollars each time you freeze or temporarily lift the freeze, except a consumer reporting agency may not charge any amount to a victim of identity theft who has submitted a copy of a valid investigative report or complaint to a law enforcement agency about the unlawful use of the victim’s information by another person.

A security freeze does not apply to circumstances where you have an existing account relationship and a copy of your report is requested by your existing creditor or its agents or affiliates for certain types of account review, collection, fraud control, or similar activities.

If you are actively seeking a new credit, loan, utility, or telephone account, you should understand that the procedures involved in lifting a security freeze may slow your own applications for credit. You should plan ahead and lift a freeze — either completely if you are shopping around, or specifically for a certain creditor — with enough advance notice before you apply for new credit for the lifting to take effect.

You have a right to bring a civil action against someone who violates your rights under the credit reporting laws. The action can be brought against a consumer reporting agency or a user of your credit report.

Source:

S.L. 2007, ch. 438, § 1.

51-33-13. Private enforcement.

  1. If a consumer reporting agency erroneously releases a consumer’s credit file or any information derived from the file, the consumer reporting agency shall send written notification to the affected consumer within five business days following discovery or notification of the erroneous release, including specificity as to the information released and the third-party recipient of the information. In addition, the affected consumer in a civil action against the consumer reporting agency may recover:
    1. Injunctive relief to prevent or restrain further violation of the security freeze;
    2. The greater of actual damages or two thousand dollars in civil penalties for each violation; and
    3. Reasonable expenses, court costs, investigative costs, and attorney’s fees.
  2. Each violation of the security freeze shall be counted as a separate incident for purposes of imposing penalties under this section.

Source:

S.L. 2007, ch. 438, § 1.

51-33-14. Enforcement by attorney general — Powers — Remedies — Separate violations — Venue.

The attorney general may enforce this chapter. In enforcing this chapter, the attorney general has all the powers provided in chapter 51-15 and may seek all the remedies in chapter 51-15. A violation of this chapter is a violation of chapter 51-15. Each violation of the security freeze shall be counted as a separate violation. The remedies, duties, prohibitions, and penalties of this chapter are not exclusive and are in addition to all other causes of action, remedies, and penalties under chapter 51-15 and as otherwise provided by law. The attorney general may bring an action pursuant to this section in either the county of the consumer’s residence or Burleigh County.

Source:

S.L. 2007, ch. 438, § 1.

CHAPTER 51-34 Telephone Records Protection

51-34-01. Definitions.

In this chapter, unless the context or subject matter otherwise requires:

  1. “Customer” means the person who subscribes to telephone service from a telephone company or in whose name such telephone service is listed and to whom the telephone record pertains.
  2. “Procure” in regard to a telephone record means to obtain by any means, whether electronically, in writing, or in oral form, with or without consideration.
  3. “Telephone” means any device used by a person for voice or other electronic communications, in connection with the services of a telephone company, whether such voice or other electronic communications are transmitted in analog, data, or any other form.
  4. “Telephone company” means any person that provides commercial telephone services to a customer, regardless of the communications technology used to provide such service, including traditional wireline or cable telephone service; cellular, broadband PCS, or other wireless telephone service; microwave, satellite, or other terrestrial telephone service; and voice over internet telephone service.
  5. “Telephone record” means information retained by a telephone company that relates to the telephone number dialed by the customer or other person using the customer’s telephone with such customer’s permission, the incoming number of a call directed to a customer or other person using the customer’s telephone with such customer’s permission, or other data related to such call typically contained on a customer’s telephone bill, including the times the call started and ended, the duration of the call, the time the call was made, and any charges applied. A telephone record does not include information collected and retained by a customer utilizing caller identification or similar technology or include a carrier network record.

Source:

S.L. 2007, ch. 439, § 1.

Effective Date.

This chapter became effective June 1, 2007, pursuant to an emergency clause in section 3 of chapter 439, S.L. 2007.

51-34-02. Unauthorized or fraudulent procurement, sale, or receipt of telephone records prohibited — Criminal penalties — Restitution.

  1. A person may not:
    1. Procure, attempt to procure, solicit, or conspire with another to procure, a telephone record of any resident of this state without the authorization of the customer or by fraudulent, deceptive, or false means;
    2. Sell, or attempt to sell, a telephone record of any resident of this state without the customer’s authorization; or
    3. Receive a telephone record of any resident of this state when such record has been obtained without the customer’s authorization or by fraudulent, deceptive, or false means.
  2. Any person who knowingly violates this section is guilty of a class C felony.
  3. In addition to any other punishment, a person found guilty of an offense under this section shall make restitution for any financial loss sustained by the customer or any other person who suffered financial loss as the direct result of the offense.

Source:

S.L. 2007, ch. 439, § 1.

51-34-03. Jurisdiction — Conduct outside this state — Venue — Multiple offenses.

  1. Notwithstanding section 29-03-01.1, a person who, while outside this state, engages in conduct in violation of section 51-34-02 is subject to prosecution under this chapter in the courts of this state. Except as provided in subsection 2, the venue is in the county in which the customer or victim resides or any other county in which any part of the crime occurred.
  2. When a person commits violations of this section in more than one county involving either one or more customers or victims or the commission of acts constituting an element of the offense, the multiple offenses may be consolidated for commencement of prosecution in any county where one of the offenses was committed.

Source:

S.L. 2007, ch. 439, § 1.

51-34-04. Nonapplicability to valid legal process and law enforcement.

  1. This chapter does not apply to any person acting pursuant to a valid court order, warrant, or subpoena, a subpoena by the attorney general pursuant to this chapter or chapter 51-15, or other valid legal process.
  2. This chapter does not prevent any action by a law enforcement agency, or any officer, employee, or agent of such agency, to obtain telephone records in connection with the performance of the official duties of the agency as authorized by law.

Source:

S.L. 2007, ch. 439, § 1.

51-34-05. Permitted use by telephone companies.

  1. This chapter does not prohibit a telephone company from obtaining, using, disclosing, or permitting access to any telephone record, either directly or indirectly through its agents or contractors:
    1. As otherwise authorized by law;
    2. With the lawful consent of the customer;
    3. As may be necessarily incident to the rendition of the service or to the protection of the rights or property of the telephone company, or to protect the customer of those services and other carriers from fraudulent, abusive, or unlawful use of, or subscription to, such services;
    4. To a governmental entity, if the telephone company reasonably believes that an emergency involving immediate danger of death or serious physical injury to any person justifies disclosure of the information; or
    5. To the national center for missing and exploited children, in connection with a report submitted thereto under section 227 of the Victims of Child Abuse Act of 1990.
  2. This chapter does not apply to or expand upon the obligations and duties of any telephone company to protect telephone records beyond those otherwise established by federal law or state law or both as set forth in section 51-34-06.
  3. This chapter does not apply to a telephone company, and its agents or representatives, who reasonably and in good faith act pursuant to subsection 2, notwithstanding any later determination that the action was not in fact authorized.

Source:

S.L. 2007, ch. 439, § 1.

51-34-06. Information security — No private claim for relief.

  1. Telephone companies that maintain telephone records of a resident of this state shall establish reasonable procedures to protect against unauthorized or fraudulent disclosure of the records which could result in substantial harm or inconvenience to a customer.
  2. This section does not authorize a private claim for relief for a violation of this section.

Source:

S.L. 2007, ch. 439, § 1.

51-34-07. Deceptive act or practice — Enforcement — Powers — Remedies — Venue.

The state’s attorney or attorney general may enforce this chapter. In enforcing this chapter, the attorney general has all the powers provided in chapter 51-15 and may seek all the remedies in chapter 51-15. A violation of this chapter is a violation of chapter 51-15. The remedies, duties, prohibitions, and penalties of this chapter are not exclusive and are in addition to all other causes of action, remedies, and penalties under chapter 51-15 and as otherwise provided by law. The attorney general may bring an action pursuant to this section in either the county of the customer’s residence or Burleigh County.

Source:

S.L. 2007, ch. 439, § 1.

CHAPTER 51-35 Purchases by Scrap Metal Dealers

51-35-01. Definitions.

As used in this chapter, unless the context otherwise requires:

  1. “Alloy” means a combination of a metal and carbon or other metals.
  2. “Business records” means records of any purchase or transaction that involves the receipt of scrap metals made in the ordinary course of business and includes written receipts, books or similar records, or electronically stored records, but does not include correspondence, tax returns, or financial statements.
  3. “Ferrous metals” means those metals that will attract a magnet, and includes alloys of those metals.
  4. “Law enforcement officer” or “peace officer” means a public servant authorized by law or by a government agency or branch to enforce the law and to conduct or engage in investigations or prosecutions for violations of law.
  5. “Nonferrous metals” means those metals that will not normally attract a magnet, including copper, brass, aluminum, bronze, lead, zinc, platinum, and nickel and includes alloys of those metals.
  6. “Scrap metal” means ferrous or nonferrous metals purchased primarily for reuse or recycling, including metals combined with other materials at the time of purchase or acquisition, and including insulated and uninsulated wire and cable. Scrap metal does not include automobiles, automobile hulks, or any aluminum food or beverage containers.
  7. “Scrap metal dealer” means a person, as defined in subsection 8 of section 1-01-49, engaged in the business of purchasing, selling, trading, or bartering scrap metal, and includes all employees of the scrap metal dealer.

Source:

S.L. 2013, ch. 390, § 1.

Effective Date.

This chapter became effective May 1, 2013, pursuant to an emergency clause in section 6 of chapter 390, S.L. 2013.

51-35-02. Records of purchase, trade, barter, or transaction required.

  1. Every scrap metal dealer shall keep business records of any purchase, trade, barter, or other transaction that involves the receipt of scrap metals worth over twenty-five dollars. The business records must include the following information:
    1. The date, time, and place of each purchase or transaction;
    2. A description of the scrap metal received and the weight and type of scrap metal received;
    3. The amount paid to the person selling or delivering the scrap metal and the manner of payment, including check or electronic transfer;
    4. The name and address of the person selling or delivering the scrap metal; and
    5. A photocopy of a valid government-issued identification card or driver’s license and which must include the seller’s or deliverer’s full name, photograph, date of birth, and signature.
  2. Every scrap metal dealer shall keep the business records required under this section at the business premises of the scrap metal dealer or other reasonably available location within this state for seven years after the date of each purchase or transaction for which business records are required under this section.
  3. A scrap metal dealer may not pay cash for scrap metal purchases or transactions over one thousand dollars, but may only pay by check or electronic transfer.
  4. Each scrap metal dealer’s premises must be kept open during regular business hours for inspection by a law enforcement officer and each scrap metal dealer’s business records and business inventory must be made available for inspection by a law enforcement officer at all times during reasonable business hours or at reasonable times if ordinary hours of business are not kept.
  5. Before a law enforcement officer may conduct an inspection under this section, the law enforcement officer shall inform the scrap metal dealer that the individual is a law enforcement officer and shall inform the scrap metal dealer of the purpose of the inspection. The law enforcement officer shall comply with all reasonable and customary safety requirements of the scrap metal dealer on the business premises.
  6. The scrap metal dealer may require a law enforcement officer to sign an inspection log that includes the officer’s name and serial or badge number and the date, time, and purpose for the inspection.
  7. The provisions of this chapter shall take precedence over and supersede any local ordinance adopted by a political subdivision that regulates scrap metal transactions.

Source:

S.L. 2013, ch. 390, § 2.

51-35-03. Exemptions.

Section 51-35-02 does not apply to:

  1. Purchases from another scrap metal dealer who regularly conducts scrap metal business in this state.
  2. Purchases from government agencies.
  3. Purchases from persons regularly engaged in the business of manufacturing metals or regularly engaged in the business of selling metals at retail or wholesale, including scrap processing or manufacturing that produces byproducts for scrap.
  4. Purchases from persons regularly engaged in the generation or transmission of electricity, or in telephone, telegraph, or cable communications, if the person provides the scrap metal dealer with a bill of sale or other written evidence of ownership of the scrap metal purchased from the person.

Source:

S.L. 2013, ch. 390, § 3.

51-35-04. Penalty.

  1. A scrap metal dealer who willfully fails to comply with section 51-35-02 is guilty of a class B misdemeanor.
  2. A scrap metal dealer who willfully buys, receives, possesses, or conceals stolen scrap metal, and the scrap metal is less than five hundred dollars in value is guilty of a class A misdemeanor.
  3. A scrap metal dealer who willfully buys, receives, possesses, or conceals stolen scrap metal, and the scrap metal exceeds five hundred dollars in value, is guilty of a class C felony.

Source:

S.L. 2013, ch. 390, § 4.

CHAPTER 51-36 Assertion of Patent Infringement

51-36-01. Definitions.

In this chapter, unless the context or subject matter otherwise requires:

  1. “Demand letter” means a letter, electronic mail, or other communication asserting or claiming the target engaged in patent infringement.
  2. “Target” means any person:
    1. That receives a demand letter or against whom an assertion or allegation of patent infringement is made;
    2. That is threatened with litigation or against whom a lawsuit is filed alleging patent infringement; or
    3. Whose customer receives a demand letter asserting that the person’s product, service, or technology infringes a patent.

Source:

S.L. 2015, ch. 353, § 1, eff August 1, 2015.

Effective Date.

This chapter became effective August 1, 2015.

51-36-02. Bad faith assertion of patent infringement prohibited.

A person may not make a bad faith assertion of patent infringement as prohibited by this chapter.

Source:

S.L. 2015, ch. 353, § 1, eff August 1, 2015.

51-36-03. Factors for bad faith assertion of infringement.

A court may consider any of the following factors as evidence a person made a bad faith assertion of patent infringement:

  1. The demand letter does not contain the following information:
    1. The patent number;
    2. The name and address of the patent owner and assignee, if any; or
    3. Factual allegations concerning the specific areas in which the target’s product, service, or technology infringe the patent or are covered by the claim in the patent.
  2. Before sending the demand letter, the person fails to conduct an analysis comparing the claim in the patent to the target’s product, service, or technology, or such an analysis was done but does not identify the specific area in which the product, service, or technology is covered by the claim in the patent.
  3. The demand letter lacks the information described in subsection 1, the target requests the information, and the person fails to provide the information within a reasonable period of time.
  4. The demand letter demands payment of a license fee or a response within an unreasonably short period of time.
  5. The person offers to license the patent for an amount that is not based on a reasonable estimate of the value of the license.
  6. The claim of patent infringement is unenforceable and the person knew, or should have known, the claim is unenforceable.
  7. The claim of patent infringement is deceptive.
  8. The person, a subsidiary, or an affiliate previously filed or threatened to file a lawsuit based on the same or a similar claim of patent infringement and:
    1. The threat or lawsuit lacked the information described in subsection 1; or
    2. The person attempted to enforce the claim of patent infringement in litigation and a court found the claim to be unenforceable.
  9. The person making the assertion of infringement of a patent does not own or have the right to enforce or license the patent.
  10. The person sent the same demand or substantially same demand to multiple recipients and made assertions against a variety of products and systems without reflecting product and system differences in a reasonable manner in the demands.
  11. The person threatens legal action that cannot legally be taken or that is not intended to be taken.
  12. The person represents a complaint has been filed alleging the target has infringed the patent when no complaint has been filed.
  13. The claim of patent infringement is based on a patent or a claim of a patent that has expired or previously been held invalid or unenforceable in a final unappealable or unappealed judicial or administrative decision.
  14. Any other factor the court finds relevant.

Source:

S.L. 2015, ch. 353, § 1, eff August 1, 2015.

51-36-04. Factors for claim of patent infringement not made in bad faith.

A court may consider the following factors as evidence a person has not made a bad faith assertion of patent infringement:

  1. The demand letter contains all of the information described in subsection 1 of section 51-36-03.
  2. If the demand letter lacks the information described in subsection 1 of section 51-36-03 and the target requests the information, the person provides the information within a reasonable period of time.
  3. The person engages in a good faith effort to establish the target has infringed the patent and to negotiate an appropriate remedy.
  4. The person makes a substantial investment in the use of the patent or in the production or sale of a product or item covered by the patent.
  5. The person is:
    1. The inventor or joint inventor of the patent or, in the case of a patent filed by and awarded to an assignee of the original inventor or joint inventor, is the original assignee; or
    2. An institution of higher education or a technology transfer organization owned or affiliated with an institution of higher education.
  6. The person has:
    1. Demonstrated good faith business practices in previous efforts to enforce the patent or a substantially similar patent; or
    2. Successfully enforced the patent, or a substantially similar patent, through litigation.
  7. Any other factor the court finds relevant.

Source:

S.L. 2015, ch. 353, § 1, eff August 1, 2015.

51-36-05. Bond.

Upon motion by a target and a finding by the court that the target has established a reasonable likelihood a person has made a bad faith assertion of patent infringement in violation of this chapter, the court shall require the person to post a bond in an amount equal to a good faith estimate of the target’s costs to litigate the claim and amounts reasonably likely to be recovered under this chapter, conditioned upon payment of any amounts finally determined to be due to the target. The court shall hold a hearing to determine the amount of the bond on the request of either party. A bond ordered under this section may not exceed two hundred fifty thousand dollars. The court may waive the bond requirement if the court finds the person has available assets equal to the amount of the proposed bond or for other good cause shown.

Source:

S.L. 2015, ch. 353, § 1, eff August 1, 2015.

51-36-06. Private right of action.

A target of conduct involving assertions of patent infringement or a person aggrieved by a violation of this chapter may bring an action in a court of proper jurisdiction. A court may award the following remedies to a plaintiff that prevails in an action brought pursuant to this section:

  1. Equitable relief;
  2. Damages;
  3. Costs and fees, including reasonable attorney fees; and
  4. Exemplary damages in an amount equal to fifty thousand dollars or three times the total of damages, costs, and fees, whichever is greater.

Source:

S.L. 2015, ch. 353, § 1, eff August 1, 2015.

51-36-07. Enforcement — Powers — Remedies — Penalty.

The attorney general may enforce this chapter. The attorney general, in enforcing this chapter, has all the powers provided in chapter 51-15 and may seek all the remedies in chapter 51-15. Each act in violation of this chapter constitutes a separate violation of chapter 51-15. The remedies, duties, prohibitions, and penalties of this chapter are not exclusive and are in addition to all other causes of action, remedies, and penalties in chapter 51-15, or otherwise provided by law.

Source:

S.L. 2015, ch. 353, § 1, eff August 1, 2015.

51-36-08. Exceptions.

This chapter does not apply to:

  1. Any person that owns or has the right to license or enforce a patent to notify another of that ownership or right of license or enforcement, to notify another that the patent is available for license or sale; notify another of the infringement of that patent pursuant to the provisions of title 35 of the United States Code; or seek compensation on account of a past or present infringement, or for a license, if it is reasonable to believe that the person from whom compensation is sought may owe such compensation.
  2. Any demand letter sent by:
    1. Any corporation traded on a public stock exchange or any entity owned or controlled by such corporation;
    2. An owner of the patent which is using the patent in connection with the substantial research, commercial development, production, manufacturing, processing, or delivery of products or materials;
    3. Any institution of higher education as that term is defined in section 101 of the federal Higher Education Act of 1965 [20 U.S.C. 1001]; or
    4. Any technology transfer organization whose primary purpose is to facilitate the commercialization of technology developed by an institution of higher education.

Source:

S.L. 2015, ch. 353, § 1, eff August 1, 2015.

CHAPTER 51-37 Customer Contract Clauses and Automatic Renewals

Source:

S.L. 2019, HB1195, § 2, eff August 1, 2019.

Note.

Section 3 of chapter 424, S.L. 2019 provides, “ APPLICATION. This Act applies to contracts entered after July 31, 2019.”

51-37-01. Definitions.

As used in this chapter:

  1. “Automatic renewal” means a plan or arrangement in which a paid subscription or purchasing agreement is automatically renewed for a period of more than one month at the end of a definite period for a subsequent period.
  2. “Clear and conspicuous” means in a larger type than the surrounding text, in contrasting type, font, or color to the surrounding text of the same size, or set off from the surrounding text of the same size or symbols or other marks, in a manner that clearly calls attention to the language and makes the language readily apparent, readable, and understandable to the person to which the language is disclosed. In the case of an audio disclosure, “clear and conspicuous” means in a volume and cadence sufficient to be readily audible and understandable. A statement that contradicts or is inconsistent with any other information with which the statement is presented is not clear and conspicuous.

Source:

S.L. 2019, ch. 424, § 2, eff August 1, 2019.

Note.

Section 3 of chapter 424, S.L. 2019 provides, “ APPLICATION. This Act applies to contracts entered after July 31, 2019.”

51-37-02. Use of automatic renewal.

  1. A person that sells or offers to sell merchandise for a specified period under an agreement containing a provision for automatic renewal shall:
    1. Present the terms of the automatic renewal offer in a clear and conspicuous manner before a subscription or purchasing agreement is fulfilled and in proximity to the offer;
    2. Provide an acknowledgment that includes the terms of the automatic renewal offer and information regarding how to cancel in a manner which is capable of being retained by the buyer; and
    3. Provide a cost-effective, timely, and simple procedure for cancellation which must be described in the acknowledgment required by subdivision b.
  2. A person that sells or offers to sell merchandise for a specified period under an agreement that contains a provision for automatic renewal for a period of more than six months at the end of the time period specified in the agreement shall provide a clear and conspicuous written notice to the buyer stating the buyer may cancel the contract and avoid automatic renewal.
    1. The written notice must be provided by:
      1. First-class mail;
      2. Electronic mail; or
      3. Any easily accessible form of communication, including text message or a mobile application, if the consumer specifically authorizes the person to provide notice in such form.
    2. The written notice must include the procedure for canceling and must be given at least thirty days and not more than sixty days before the date upon which the agreement will be renewed or the expiration of the period for cancellation.
  3. If there is a material change in the terms of an agreement that contains a provision for automatic renewal, the seller shall provide the buyer with clear and conspicuous notice of the material change and provide information regarding how to cancel in a manner which is capable of being retained by the buyer.
  4. A person that sells or offers to sell merchandise for a specified period under an agreement that contains a provision for automatic renewal may not make or submit any charge to a buyer’s credit card, debit card, bank account, account with a third party, or other financial account, unless the person has complied with the requirements of subsection 1 and obtained the buyer’s affirmative consent to the agreement containing the terms of the automatic renewal.
  5. The renewal period in a provision for automatic renewal of an agreement for sale of merchandise may not exceed twelve months.

Source:

S.L. 2019, ch. 424, § 2, eff August 1, 2019.

Note.

Section 3 of chapter 424, S.L. 2019 provides, “ APPLICATION. This Act applies to contracts entered after July 31, 2019.”

51-37-03. Exceptions.

This chapter does not apply to:

  1. The sale of insurance regulated under title 26.1;
  2. The sale of public utilities regulated under title 49 or the federal communications commission, or services provided by the public utilities; or
  3. A bank, bank holding company, credit union, or other financial institution or trust company regulated under title 6.

Source:

S.L. 2019, ch. 424, § 2, eff August 1, 2019.

Note.

Section 3 of chapter 424, S.L. 2019 provides, “ APPLICATION. This Act applies to contracts entered after July 31, 2019.”

51-37-04. Remedies.

An agreement for sale of merchandise in violation of this chapter is unenforceable and void. If a person sends merchandise as a result of an automatic renewal of agreement without complying with the requirements of section 51-37-02 or sends merchandise after a buyer undertook an affirmative act to cancel or otherwise avoid charges, the merchandise is considered to be an unconditional gift to the buyer who may dispose of the gift in any manner the buyer sees fit without any obligation to the person.

Source:

S.L. 2019, ch. 424, § 2, eff August 1, 2019.

Note.

Section 3 of chapter 424, S.L. 2019 provides, “ APPLICATION. This Act applies to contracts entered after July 31, 2019.”

51-37-05. Enforcement — Powers — Remedies — Penalty.

The attorney general may enforce this chapter. The attorney general, in enforcing this chapter, has the powers provided in chapter 51-15 and may seek the remedies in chapter 51-15. Each act in violation of this chapter constitutes a separate violation of chapter 51-15. The remedies, duties, prohibitions, and penalties of this chapter are not exclusive and are in addition to all other causes of action, remedies, and penalties in chapter 51-15, or otherwise provided by law.

Source:

S.L. 2019, ch. 424, § 2, eff August 1, 2019.

Note.

Section 3 of chapter 424, S.L. 2019 provides, “ APPLICATION. This Act applies to contracts entered after July 31, 2019.”

51-37-06. Private enforcement.

A person aggrieved by a violation of this chapter may bring an action to enjoin the violation or for restitution, or both. The court may award the plaintiff costs, expenses, and reasonable attorney’s fees. This section does not limit any other claims the plaintiff may have against a seller subject to this chapter.

Source:

S.L. 2019, ch. 424, § 2, eff August 1, 2019.

Note.

Section 3 of chapter 424, S.L. 2019 provides, “ APPLICATION. This Act applies to contracts entered after July 31, 2019.”