What rights does a car dealer have if an automaker terminates the franchise?

What the Law Says

The primary federal law once intended to protect auto dealers from unfair franchise termination—the Automobile Dealers' Day in Court Act—was fully repealed in 1994. As a result, there is no current federal statutory right for dealers to challenge automaker terminations under U.S. Code.

The Automobile Dealers' Day in Court Act (15 U.S.C. §§ 1981–1991) was enacted in 1956 to give dealers a federal cause of action against manufacturers for bad-faith termination or nonrenewal of franchises. However, it was repealed effective July 5, 1994, by Public Law 103–272, § 7(b).

Today, 15 U.S.C. § 1221 — cited as the 'Automobile dealer franchise protections' — is a placeholder reference with no operative text; the underlying provisions no longer exist in federal law.

Dealers seeking legal recourse must therefore look to state-specific automobile franchise acts (e.g., in California, Michigan, or Texas), common law contract principles, or the terms of their franchise agreement.

Statutory Text

Repealed. Pub. L. 103–272, § 7(b), July 5, 1994, 108 Stat. 1379

— Automobile Dealers' Day in Court Act, 15 U.S.C. § 1981 et seq. — Repealed

Sources