11700-11740

VEHICLE CODE
SECTION 11700-11740




11700.  No person shall act as a dealer, remanufacturer,
manufacturer, or transporter, or as a manufacturer branch,
remanufacturer branch, distributor, or distributor branch, without
having first been issued a license as required in Section 11701 or
temporary permit issued by the department, except that, when the
license or temporary permit has been canceled, suspended, or revoked
or has expired, any vehicle in the dealer's inventory and owned by
the dealer when the dealer ceased to be licensed may be sold at
wholesale to a licensed dealer. The former licensee shall give the
purchasing dealer a statement of facts stating that the seller is not
a licensed dealer. Any vehicle on consignment with the dealer when
the dealer ceased to be licensed shall be returned to the consignor.
Any vehicle in the dealer's possession, but not owned by the dealer
and not on consignment when the dealer ceased to be licensed, shall
be returned to the owner of the vehicle.



11700.1.  A dealer who does not have an established place of
business in this state but who is currently authorized to do business
as, and who has an established place of business as, a vehicle
dealer in another state is not subject to licensure under this
article if the business transacted in California is limited to the
importation of vehicles for sale to, or the export of vehicles
purchased from, persons licensed in California under this chapter.



11700.2.  A dealer who obtains an autobroker's endorsement to his or
her dealer's license is subject to all of the licensing,
advertising, and other statutory and regulatory requirements and
prohibitions applicable to a dealer, regardless of whether that
dealer acts as the buyer of a vehicle, the seller of a vehicle, or
provides brokering services on behalf of another or others for the
purpose of arranging, negotiating, assisting, or effectuating the
sale of a vehicle not owned by that dealer.



11700.3.  No person may aid and abet a person in the performance of
any act in violation of this chapter.



11701.  Every manufacturer, manufacturer branch, remanufacturer,
remanufacturer branch, distributor, distributor branch, transporter,
or dealer of vehicles of a type subject to registration, or
snowmobiles, motorcycles, all-terrain vehicles, or trailers of a type
subject to identification, shall make application to the department
for a license containing a general distinguishing number. The
applicant shall submit proof of his or her status as a bona fide
manufacturer, manufacturer branch, remanufacturer, remanufacturer
branch, distributor, distributor branch, transporter, or dealer as
may reasonably be required by the department.


11702.  The department may issue, or for reasonable cause shown,
refuse to issue a license to any applicant applying for a
manufacturer's, manufacturer's branch, remanufacturer's,
remanufacturer's branch, distributor's, distributor's branch,
transporter's, or dealer's license.



11703.  The department may refuse to issue a license to a
manufacturer, manufacturer branch, remanufacturer, remanufacturer
branch, distributor, distributor branch, transporter, or dealer, if
it determines any of the following:
   (a) The applicant was previously the holder, or a managerial
employee of the holder, of a license issued under this chapter which
was revoked for cause and never reissued by the department, or which
was suspended for cause and the terms of suspension have not been
fulfilled.
   (b) The applicant was previously a business representative of a
business whose license issued under this chapter was revoked for
cause and never reissued or was suspended for cause and the terms of
suspension have not been fulfilled.
   (c) If the applicant is a business, a business representative of
the business was previously the holder of a license, or was a
business representative of a business whose license, issued under
this chapter was revoked for cause and never reissued or was
suspended for cause and the terms of suspension have not been
fulfilled; or, by reason of the facts and circumstances related to
the organization, control, and management of the business, the
operation of that business will be directed, controlled, or managed
by individuals who, by reason of their conviction of violations of
the provisions of this code, would be ineligible for a license and,
by licensing the business, the purposes of this chapter would be
defeated.
   (d) The applicant, or a business representative if the applicant
is a business, has been convicted of a crime or committed an act or
engaged in conduct involving moral turpitude which is substantially
related to the qualifications, functions, or duties of the licensed
activity. A conviction after a plea of nolo contendere is a
conviction within the meaning of this section.
   (e) The applicant was previously the holder of an occupational
license issued by another state, authorizing the same or similar
activities of a license issued under this division; and that license
was revoked or suspended for cause and was never reissued, or was
suspended for cause, and the terms of suspension have not been
fulfilled.
   (f) The information contained in the application is incorrect.
   (g) Upon investigation, the business history required by Section
11704 contains incomplete or incorrect information, or reflects
substantial business irregularities.
   (h) A decision of the department to cancel, suspend, or revoke a
license has been made and the applicant was a business representative
of the business regulated under that license.
   (i) The applicant has failed to repay the full amount of a claim
paid by the Consumer Motor Vehicle Recovery Corporation, plus
interest at the rate of 10 percent per annum. The dealer or
lessor-retailer's discharge in bankruptcy shall not relieve the
dealer or lessor-retailer from the provisions of this subdivision,
except to the extent, if any, mandated by bankruptcy law.



11703.1.  Any of the causes specified in this chapter as a cause to
suspend or revoke the license issued to a dealer, manufacturer,
manufacturer branch, remanufacturer, remanufacturer branch,
distributor, distributor branch, or transporter, is cause to refuse
to issue a license to a dealer, manufacturer, manufacturer branch,
remanufacturer, remanufacturer branch, distributor, distributor
branch, or transporter.



11703.2.  The department may refuse to issue a license to a
manufacturer, manufacturer branch, remanufacturer, remanufacturer
branch, distributor, distributor branch, transporter, or dealer, when
the department determines that either of the following apply to the
applicant:
   (a) An outstanding and unsatisfied final judgment rendered against
the applicant exists in connection with the purchase, sale, or lease
of any vehicle.
   (b) An outstanding and unsatisfied restitution order issued
against the applicant under subdivision (a) of Section 11519.1 of the
Government Code exists.



11703.3.  A person whose license has been revoked or whose
application for a license has been denied may reapply for a license
after a period of not less than one year has elapsed from the
effective date of the decision revoking the license or denying the
application; except that if the decision was entered under the
authority of subdivision (a), (b), (c), or (g) of Section 11703, or
11703.2, or paragraph (6) of subdivision (a) of Section 11705, a
reapplication accompanied by evidence satisfactory to the department
that such grounds no longer exist may be made earlier than such
one-year period.



11703.4.  The department may refuse to issue a license to a dealer
when it determines that an applicant for a dealer's license has
failed to effectively endorse an authorization for disclosure of an
account or accounts relating to the operation of the dealership as
provided for in Section 7473 of the Government Code.



11704.  (a) Every applicant who applies for a license pursuant to
Section 11701 shall submit an application to the department on the
forms prescribed by the department. Such applicant shall provide the
department with information as to the applicant's character, honesty,
integrity, and reputation, as the department may consider necessary.
The department, by regulation, shall prescribe what information is
required of such an applicant for the purposes of this subdivision.
   (b) Upon receipt of an application for a license which is
accompanied by the appropriate fee, the department shall, within 120
days, make a thorough investigation of the information contained in
the application.
   (c) Every person holding a license issued pursuant to Section
11701 shall notify the department, within 10 days, of any change in
the ownership or corporate structure of the licensee.



11704.5.  (a) Except as provided in subdivision (e), every person
who applies for a dealer's license pursuant to Section 11701 for the
purpose of transacting sales of used vehicles on a retail or
wholesale basis only shall be required to take and successfully
complete a written examination prepared and administered by the
department before a license may be issued. The examination shall
include, but need not be limited to, all of the following laws and
subjects:
   (1) Division 12 (commencing with Section 24000), relating to
equipment of vehicles.
   (2) Advertising.
   (3) Odometers.
   (4) Vehicle licensing and registration.
   (5) Branch locations.
   (6) Offsite sales.
   (7) Unlawful dealer activities.
   (8) Handling, completion, and disposition of departmental forms.
   (b) Prior to the first taking of an examination under subdivision
(a), every applicant shall successfully complete a preliminary
educational program of not less than four hours. The program shall
address, but not be limited to, all of the following topics:
   (1) Chapter 2B (commencing with Section 2981) of Title 14 of Part
4 of Division 3 of the Civil Code, relating to motor vehicle sales
finance.
   (2) Motor vehicle financing.
   (3) Truth in lending.
   (4) Sales and use taxes.
   (5) Division 12 (commencing with Section 24000), relating to
equipment of vehicles.
   (6) Advertising.
   (7) Odometers.
   (8) Vehicle licensing and registration.
   (9) Branch locations.
   (10) Offsite sales.
   (11) Unlawful dealer activities.
   (12) Air pollution control requirements.
   (13) Regulations of the Bureau of Automotive Repair.
   (14) Handling, completion, and disposition of departmental forms.
   (c) (1) Except as provided in paragraph (2) or (3), every dealer
who is required to complete a written examination and an educational
program pursuant to subdivisions (a) and (b) and who is thereafter
issued a dealer's license shall successfully complete, every two
years after issuance of that license, an educational program of not
less than four hours that offers instruction in the subjects listed
under subdivision (a) and the topics listed under subdivision (b), in
order to maintain or renew that license.
   (2) A dealer is not required to complete the educational program
set forth in paragraph (1) if the educational program is completed by
a managerial employee employed by the dealer.
   (3) Paragraph (1) does not apply to dealers who sell vehicles on a
wholesale basis only and who, in a one-year period, deal with less
than 50 vehicles that are subject to registration.
   (d) Instruction described in subdivisions (b) and (c) may be
provided by generally accredited educational institutions, private
vocational schools, and educational programs and seminars offered by
professional societies, organizations, trade associations, and other
educational and technical programs that meet the requirements of this
section or by the department.
   (e) This section does not apply to any of the following:
   (1) An applicant for a new vehicle dealer's license or any
employee of that dealer.
   (2) A person who holds a valid license as an automobile
dismantler, an employee of that dismantler, or an applicant for an
automobile dismantler's license.
   (3) An applicant for a motorcycle only dealer's license or any
employee of that dealer.
   (4) An applicant for a trailer only dealer's license or any
employee of that dealer.
   (5) An applicant for an all-terrain only dealer's license or any
employee of that dealer.



11704.7.  Every person who applies to the department to take or
retake the examination required under Section 11704.5 shall pay to
the department a fee of sixteen dollars ($16).



11705.  (a) The department, after notice and hearing, may suspend or
revoke the license issued to a dealer, transporter, manufacturer,
manufacturer branch, remanufacturer, remanufacturer branch,
distributor, or distributor branch upon determining that the person
to whom the license was issued is not lawfully entitled thereto, or
has done any of the following:
   (1) Filed an application for the license using a false or
fictitious name not registered with the proper authorities, or
knowingly made a false statement or knowingly concealed a material
fact, in the application for the license.
   (2) Made, or knowingly or negligently permitted, an illegal use of
the special plates issued to the licensee.
   (3) Used a false or fictitious name, knowingly made a false
statement, or knowingly concealed a material fact, in an application
for the registration of a vehicle, or otherwise committed a fraud in
the application.
   (4) Failed to deliver to a transferee lawfully entitled thereto a
properly endorsed certificate of ownership.
   (5) Knowingly purchased, sold, or otherwise acquired or disposed
of a stolen motor vehicle.
   (6) Failed to provide and maintain a clear physical division
between the type of business licensed pursuant to this chapter and
any other type of business conducted at the established place of
business.
   (7) Willfully violated Section 3064 or 3065 or any rule or
regulation adopted pursuant thereto.
   (8) Violated any provision of Division 3 (commencing with Section
4000) or any rule or regulation adopted pursuant thereto, or
subdivision (a) of Section 38200.
   (9) Violated any provision of Division 4 (commencing with Section
10500) or any rule or regulation adopted pursuant thereto.
   (10) Violated any provision of Article 1 (commencing with Section
11700) of Chapter 4 of Division 5 or any rule or regulation adopted
pursuant thereto.
   (11) Violated any provision of Part 5 (commencing with Section
10701) of Division 2 of the Revenue and Taxation Code or any rule or
regulation adopted pursuant thereto.
   (12) Violated any provision of Chapter 2b (commencing with Section
2981) of Title 14 of Part 4 of Division 3 of the Civil Code or any
rule or regulation adopted pursuant thereto.
   (13) Submitted a check, draft, or money order to the department
for any obligation or fee due the state which was dishonored or
refused payment upon presentation.
   (14) Has caused any person to suffer any loss or damage by reason
of any fraud or deceit practiced on that person or fraudulent
representations made to that person in the course of the licensed
activity.
   For purposes of this paragraph, "fraud" includes any act or
omission which is included within the definition of either "actual
fraud" or "constructive fraud" as defined in Sections 1572 and 1573
of the Civil Code, and "deceit" has the same meaning as defined in
Section 1710 of the Civil Code. In addition, "fraud" and "deceit"
include, but are not limited to, a misrepresentation in any manner,
whether intentionally false or due to gross negligence, of a material
fact; a promise or representation not made honestly and in good
faith; an intentional failure to disclose a material fact; and any
act within Section 484 of the Penal Code.
   For purposes of this paragraph, "person" also includes a
governmental entity.
   (15) Failed to meet the terms and conditions of an agreement
entered into pursuant to Section 11707.
   (16) Violated Section 43151, 43152, or 43153 of, or subdivision
(b) of Section 44072.10 of, the Health and Safety Code.
   (17) Failed to repay a claim paid by the Consumer Motor Vehicle
Recovery Corporation as provided in subdivision (i) of Section 11703.
   (b) Any of the causes specified in this chapter as a cause for
refusal to issue a license to a transporter, manufacturer,
manufacturer branch, remanufacturer, remanufacturer branch,
distributor, distributor branch, or dealer applicant is cause to
suspend or revoke a license issued to a transporter, manufacturer,
manufacturer branch, remanufacturer, remanufacturer branch,
distributor, distributor branch, or dealer.
   (c) Except as provided in Section 11707, every hearing provided
for in this section shall be conducted pursuant to Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title 2 of
the Government Code.



11705.4.  (a) The department, after notice and hearing, may suspend
or revoke the license issued to a dealer, transporter, manufacturer,
manufacturer branch, distributor, or distributor branch upon
determining that the person to whom the license was issued is not
lawfully entitled thereto or has willfully violated the terms and
conditions of any warranty responsibilities as set forth in Title 1.7
(commencing with Section 1790) of Part 4 of Division 3 of the Civil
Code.
   (b) Every hearing as provided for in this section shall be
pursuant to the provisions of Chapter 5 (commencing with Section
11500) of Part 1 of Division 3 of Title 2 of the Government Code.




11706.  The department may, pending a hearing, temporarily suspend
the license and special plates issued to a manufacturer, manufacturer
branch, remanufacturer, remanufacturer branch, distributor,
distributor branch, transporter, or dealer, for a period not to
exceed 30 days, if the director finds that such action is required in
the public interest. In any such case, a hearing shall be held and a
decision thereon issued within 30 days after notice of the temporary
suspension.
   Every hearing, as provided for in this section, shall be conducted
pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of
Division 3 of Title 2 of the Government Code.



11707.  (a) After the filing of an accusation under this article,
the director may enter into a stipulated compromise settlement
agreement with the consent of the licensee on terms and conditions
mutually agreeable to the director, the respondent licensee, and the
accuser without further hearing or appeal. The agreement may include,
but is not limited to, a period of probation or monetary penalties,
or both. Except as provided in Section 11728, the monetary penalty
shall not exceed one thousand dollars ($1,000) for each violation,
and it shall be based on the nature of the violation and the effect
of the violation on the purposes of this article.
   (b) A compromise settlement agreement may be entered before,
during, or after the hearing, but is valid only if executed and filed
pursuant to subdivision (d) before the proposed decision of the
hearing officer, if any, is adopted or the case is decided.
   (c) The department shall adopt, by regulation, a schedule of
maximum and minimum amounts of monetary penalties, the payment of
which may be included as a term or condition of a compromise
settlement agreement entered under subdivision (a). Any monetary
penalty included in a compromise settlement agreement shall be within
the range of monetary penalties in that schedule.
   (d) Any compromise settlement agreement entered under this section
shall be signed by the director, the respondent licensee, and the
accuser, or by their authorized representatives. The director shall
file, or cause to be filed, the agreement with the Office of
Administrative Hearings, together with the department's notice of
withdrawal of the accusation or statement of issues upon which the
action was initiated.
   (e) If the respondent licensee fails to perform all of the terms
and conditions of the compromise settlement agreement, the agreement
is void and the department may take any action authorized by law,
notwithstanding the agreement, including, but not limited to,
refiling the accusation or imposing license sanctions.



11708.  (a) Upon refusal of the department to issue a license and
special plates to a manufacturer, manufacturer branch,
remanufacturer, remanufacturer branch, distributor, distributor
branch, transporter, or dealer, the applicant shall be entitled to
demand, in writing, a hearing before the director or his or her
representative within 60 days after notice of refusal.
   (b) The hearing shall be conducted pursuant to Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title 2 of
the Government Code.



11709.  (a) A dealer's established place of business, and other
sites or locations as may be operated and maintained by the dealer in
conjunction with his or her established place of business, shall
have posted, in a place conspicuous to the public in each and every
location, the license, or a true and exact copy of the license,
issued by the department to the dealer and to each salesperson
employed by the dealer and shall have erected or posted thereon signs
or devices providing information relating to the dealer's name and
the location and address of the dealer's established place of
business to enable any person doing business with the dealer to
identify him or her properly. A sign erected or posted pursuant to
this subdivision, on an established place of business, shall have an
area of not less than two square feet per side displayed and shall
contain lettering of sufficient size to enable the sign to be read
from a distance of at least 50 feet. This section shall not apply to
a dealer who is a wholesaler involved for profit only in the sale of
vehicles between licensed dealers.
   (b) Notwithstanding Section 11704 and this section, a dealer may
display vehicles at a fair, exposition, or similar exhibit without
securing a branch license, if no actual sales are made at those
events and the display does not exceed 30 days.
   (c) A vehicle displayed pursuant to subdivision (b) or (e) shall
be identified by a sign or device providing information relating to
the dealer's name and the location and address of the dealer's
established place of business.
   (d) This section shall not be applicable to a dealer who deals
only in off-highway vehicles subject to identification, as defined in
Section 38012.
   (e) Notwithstanding Section 11704 and this section, a vessel
dealer may display a trailer and may sell a trailer in conjunction
with the sale of a vessel at a fair, exposition, or similar exhibit
without securing a branch license if the display does not exceed 30
days.



11709.1.  Every dealer who displays or offers one or more used
vehicles for sale at retail shall post a notice not less than 8
inches high and 10 inches wide, in a place conspicuous to the public,
which states the following:
   "The prospective purchaser of a vehicle may, at his or her own
expense and with the approval of the dealer, have the vehicle
inspected by an independent third party either on or off these
premises."



11709.2.  Every dealer shall conspicuously display a notice, not
less than eight inches high and 10 inches wide, in each sales office
and sales cubicle of a dealer's established place of business where
written terms of specific sale or lease transactions are discussed
with prospective purchasers or lessees, and in each room of a dealer'
s established place of business where sale and lease contracts are
regularly executed, which states the following:
    "THERE IS NO COOLING-OFF PERIOD UNLESS YOU OBTAIN A CONTRACT
CANCELLATION    OPTION
   California law does not provide for a "cooling-off" or other
cancellation period for vehicle lease or purchase contracts.
Therefore, you cannot later cancel such a contract simply because you
change your mind, decide the vehicle costs too much, or wish you had
acquired a different vehicle. After you sign a motor vehicle
purchase or lease contract, it may only be canceled with the
agreement of the seller or lessor or for legal cause, such as fraud.
   However, California law does require a seller to offer a 2-day
contract cancellation option on used vehicles with a purchase price
of less than $40,000, subject to certain statutory conditions. This
contract cancellation option requirement does not apply to the sale
of a recreational vehicle, a motorcycle, or an off-highway motor
vehicle subject to identification under California law. See the
vehicle contract cancellation option agreement for details."




11709.3.  (a) Every dealer shall clearly and conspicuously display
in its showroom at its established place of business, in a place that
is easily accessible to prospective purchasers, a clear and
conspicuous listing of each vehicle that the dealer has advertised
for sale if the vehicle meets all of the following requirements:
   (1) The vehicle is advertised for sale in a newspaper or other
publication of general circulation, or in any other advertising
medium that is disseminated to the public generally, including, but
not limited to, radio, television, or the Internet.
   (2) The vehicle is advertised at a specific price and is required
pursuant to subdivision (a) of Section 11713.1 to be identified in
the advertisement by its vehicle identification number or license
number.
   (3) The vehicle has not been sold or leased during the time that
the advertised price is valid.
   (4) The vehicle does not clearly and conspicuously have displayed
on or in it the advertised price.
   (b) The listing required by subdivision (a) may be satisfied by
clearly and conspicuously posting in the showroom a complete copy of
any print advertisement that includes vehicles currently advertised
for sale or by clearly and conspicuously displaying in the showroom a
list of currently advertised vehicles described by make, model,
model-year, vehicle identification number, or license number, and the
advertised price.


11709.4.  (a) When a dealer purchases or obtains a vehicle in trade
in a retail sale or lease transaction and the vehicle is subject to a
prior credit or lease balance, all of the following apply:
   (1) If the dealer agreed to pay a specified amount on the prior
credit or lease balance owing on the vehicle purchased or obtained in
trade, and the agreement to pay the specified amount is contained in
a written agreement documenting the transaction, the dealer shall
tender the agreed upon amount as provided in the written agreement to
the lessor registered in accordance with Section 4453.5, or to the
legal owner reflected on the ownership certificate, or to the
designee of that lessor or legal owner of the vehicle purchased or
obtained in trade within 21 calendar days of purchasing or obtaining
the vehicle in trade.
   (2) If the dealer did not set forth an agreement regarding payment
of a prior credit or lease balance owed on the vehicle purchased or
obtained in trade, in a written agreement documenting the
transaction, the dealer shall tender to the lessor registered in
accordance with Section 4453.5, or to the legal owner reflected on
the ownership certificate, or to the designee of that lessor or legal
owner of the vehicle purchased or obtained in trade, an amount
necessary to discharge the prior credit or lease balance owing on the
vehicle purchased or obtained in trade within 21 calendar days of
purchasing or obtaining the vehicle in trade.
   (3) The time period specified in paragraph (1) or (2) may be
shortened if the dealer and consumer agree, in writing, to a shorter
time period.
   (4) A dealer shall not sell, consign for sale, or transfer any
ownership interest in the vehicle purchased or obtained in trade
until an amount necessary to discharge the prior credit or lease
balance owing on the vehicle has been tendered to the lessor
registered in accordance with Section 4453.5, or to the legal owner
reflected on the ownership certificate, or to the designee of that
lessor or legal owner of the vehicle purchased or obtained in trade.
   (b) A dealer does not violate this section if the dealer
reasonably and in good faith gives notice of rescission of the
contract promptly, but no later than 21 days after the date on which
the vehicle was purchased or obtained in trade, and the contract is
thereafter rescinded on any of the grounds in Section 1689 of the
Civil Code.



11710.  (a) Before any dealer's or remanufacturer's license is
issued or renewed by the department to any applicant therefor, the
applicant shall procure and file with the department a bond executed
by an admitted surety insurer, approved as to form by the Attorney
General, and conditioned that the applicant shall not practice any
fraud or make any fraudulent representation which will cause a
monetary loss to a purchaser, seller, financing agency, or
governmental agency.
   (b) A dealer's bond shall be in the amount of fifty thousand
dollars ($50,000), except the bond of a dealer who deals exclusively
in motorcycles or all-terrain vehicles shall be in the amount of ten
thousand dollars ($10,000). Before the license is renewed by the
department, the dealer, other than a dealer who deals exclusively in
motorcycles or all-terrain vehicles, shall procure and file a bond in
the amount of fifty thousand dollars ($50,000). A remanufacturer
bond shall be in the amount of fifty thousand dollars ($50,000).
   (c) Liability under the bond is to remain at full value. If the
amount of liability under the bond is decreased or there is
outstanding a final court judgment for which the dealer or
remanufacturer and sureties are liable, the dealer's or
remanufacturer's license shall be automatically suspended. In order
to reinstate the license and special plates, the licensee shall
either file an additional bond or restore the bond on file to the
original amount, or shall terminate the outstanding judgment for
which the dealer or remanufacturer and sureties are liable.
   (d) A dealer's or remanufacturer's license, or renewal of the
license, shall not be issued to any applicant therefor, unless and
until the applicant files with the department a good and sufficient
instrument, in writing, in which the applicant appoints the director
as the true and lawful agent of the applicant upon whom all process
may be served in any action, or actions, which may thereafter be
commenced against the applicant, arising out of any claim for damages
suffered by any firm, person, association, or corporation, by reason
of the violation of the applicant of any of the terms and provisions
of this code or any condition of the dealer's or remanufacturer's
bond. The applicant shall stipulate and agree in the appointment that
any process directed to the applicant, when personal service of
process upon the applicant cannot be made in this state after due
diligence and, in that case, is served upon the director or, in the
event of the director's absence from the office, upon any employee in
charge of the office of the director, shall be of the same legal
force and effect as if served upon the applicant personally. The
applicant shall further stipulate and agree, in writing, that the
agency created by the appointment shall continue for and during the
period covered by any license that may be issued and so long
thereafter as the applicant may be made to answer in damages for a
violation of this code or any condition of the bond. The instrument
appointing the director as the agent for the applicant for service of
process shall be acknowledged by the applicant before a notary
public. In any case where the licensee is served with process by
service upon the director, one copy of the summons and complaint
shall be left with the director or in the director's office in
Sacramento or mailed to the office of the director in Sacramento. A
fee of five dollars ($5) shall also be paid to the director at the
time of service of the copy of the summons and complaint. Service on
the director shall be a sufficient service on the licensee if a
notice of service and a copy of the summons and complaint are
immediately sent by registered mail by the plaintiff or the plaintiff'
s attorney to the licensee. A copy of the summons and complaint shall
also be mailed by the plaintiff or the plaintiff's attorney to the
surety on the applicant's bond at the address of the surety given in
the bond, postpaid and registered with request for return receipt.
The director shall keep a record of all process so served upon the
director, which record shall show the day and hour of service and
shall retain the summons and complaint so served on file. Where the
licensee is served with process by service upon the director, the
licensee shall have and be allowed 30 days from and after the service
within which to answer any complaint or other pleading which may be
filed in the cause. However, for purposes of venue, where the
licensee is served with process by service upon the director, the
service is deemed to have been made upon the licensee in the county
in which the licensee has or last had an established place of
business.



11710.1.  Notwithstanding subdivision (b) of Section 11710, the bond
amount of a dealer who sells vehicles on a wholesale basis only, and
who sells fewer than 25 vehicles per year, shall be ten thousand
dollars ($10,000).


11710.2.  If a deposit is given instead of the bond required by
Section 11710 both of the following apply:
   (a) (1) The director may order the deposit returned at the
expiration of any of the following dates:
   (A) Three years from the date an applicant for a dealer's license
who has operated a business of selling vehicles under a temporary
permit has ceased to do business.
   (B) Three years from the date a licensee has ceased to be
licensed, if the director is satisfied that there are no outstanding
claims against the deposit.
   (C) Five years from the date a licensee secured and maintained a
dealer bond, pursuant to Section 11710, after posting a deposit, if
the director is satisfied that there are no outstanding claims
against the deposit.
   (2) A judge of a superior court may order the return of the
deposit prior to the expiration of the dates provided in paragraph
(1) upon evidence satisfactory to the judge that there are no
outstanding claims against the deposit.
   (b) If either the director, department, or state is a defendant in
any action instituted to recover all or any part of the deposit, or
any action is instituted by the director, department, or state to
determine those entitled to any part of the deposit, the director,
department, or state shall be paid reasonable attorney fees and costs
from the deposit. Costs shall include those administrative costs
incurred in processing claims against the deposit.




11711.  (a) If any person (1) shall suffer any loss or damage by
reason of any fraud practiced on him or fraudulent representation
made to him by a licensed dealer or one of such dealer's salesmen
acting for the dealer, in his behalf, or within the scope of the
employment of such salesman and such person has possession of a
written instrument furnished by the licensee, containing stipulated
provisions and guarantees which the person believes have been
violated by the licensee, or (2) if any person shall suffer any loss
or damage by reason of the violation by such dealer or salesman of
any of the provisions of Division 3 (commencing with Section 4000) of
this code, or (3) if any person is not paid for a vehicle sold to
and purchased by a licensee, then any such person shall have a right
of action against such dealer, his salesman, and the surety upon the
dealer's bond, in an amount not to exceed the value of the vehicle
purchased from or sold to the dealer.
   (b) If the state or any political subdivision thereof shall suffer
any loss or damage by reason of any fraud practiced on the state or
fraudulent representation made to the state by a licensed dealer, or
one of such dealer's representatives acting for the dealer, in his
behalf, or within the scope of employment of such representatives, or
shall suffer any loss or damage by reason of the violation of such
dealer or representative of any of the provisions of Division 3
(commencing with Section 4000) of this code, or Part 5 (commencing
with Section 10701), Division 2 of the Revenue and Taxation Code, the
state or any political subdivision thereof, through the department,
shall have a right of action against such dealer, his representative,
and the surety upon the dealer's bond in an amount not to exceed the
value of the vehicles involved.
   (c) The failure of a dealer upon demand to pay the fees and
penalties determined to be due as provided in Section 4456 hereof is
declared to be a violation of Division 3 (commencing with Section
4000) of this code, and Part 5 (commencing with Section 10701),
Division 2 of the Revenue and Taxation Code and to constitute loss or
damage to the state in the amounts of such fees and penalties
determined to be due and not paid.
   (d) The claims of the state under subdivision (b) shall be
satisfied first and entitled to preference over all claims under
subdivision (a).
   (e) The claims of any person under subdivision (a) who is not a
licensee shall be satisfied first and entitled to preference over all
other claims under subdivision (a).



11711.3.  A person acting as a dealer, who was not licensed as a
dealer as required by this article, or a person acting as a
lessor-retailer, who was not licensed as a lessor-retailer as
required by Chapter 3.5 (commencing with Section 11600), may not
enforce any security interest or bring or maintain any action in law
or equity to recover any money or property or obtain other relief
from the purchaser or lessee of a vehicle in connection with a
transaction in which the person was, at the time of the transaction,
required to be licensed as a dealer or a lessor-retailer.




11712.  (a) The department shall not issue a dealer's license to any
applicant therefor who has not an established place of business as
defined in this code. Should the dealer change the site or location
of his established place of business, he or she shall, immediately
upon making that change, so notify the department. Should a dealer
for any reason whatsoever, cease to be in possession of an
established place of business from and on which he or she conducts
the business for which he or she is licensed, he or she shall
immediately notify the department and, upon demand by the department,
shall deliver to the department the dealer's license, dealer's
special plate or plates, and all report of sale books in his or her
possession.
   (b) Should the dealer change to, or add another franchise for the
sale of new vehicles, or cancel or, for any cause whatever, otherwise
lose a franchise for the sale of new vehicles, he or she shall
immediately so notify the department.
   (c) Any person licensed under this article who has closed his or
her established place of business may be served with process issued
pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of
Division 3 of Title 2 of the Government Code by registered mail at
that place of business or at the mailing address of record if
different from the established place of business, unless the person
has notified the department in writing of another address where
service may be made.



11712.5.  It is unlawful and a violation of this code for a dealer
issued a license pursuant to this article to sell, offer for sale, or
display any new vehicle, as follows:
   (a) A new motorcycle unless there is securely attached thereto a
statement as required by Section 24014.
   (b) A new light duty truck with a manufacturer's gross vehicle
weight rating of 8,500 pounds or less unless there is affixed to the
light duty truck the label required by Section 24013.5.



11713.  No holder of any license issued under this article shall do
any of the following:
   (a) 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
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; or to so make or disseminate, or cause to be so
disseminated, any statement as part of a plan or scheme with the
intent not to sell any vehicle or service so advertised at the price
stated therein, or as so advertised.
   (b) (1) (A) Advertise or offer for sale or exchange in any manner,
any vehicle not actually for sale at the premises of the dealer or
available to the dealer directly from the manufacturer or distributor
of the vehicle at the time of the advertisement or offer. However, a
dealer who has been issued an autobroker's endorsement to his or her
dealer's license may advertise his or her service of arranging or
negotiating the purchase of a new motor vehicle from a franchised new
motor vehicle dealer and may specify the line-makes and models of
those new vehicles. Autobrokering service advertisements may not
advertise the price or payment terms of any vehicle and shall
disclose that the advertiser is an autobroker or auto buying service,
and shall clearly and conspicuously state the following: "All new
cars arranged for sale are subject to price and availability from the
selling franchised new car dealer."
   (B) As to printed advertisements, the disclosure statement
required by subparagraph (A) shall be printed in not less than
10-point bold type size and shall be textually segregated from the
other portions of the printed advertisement.
   (2) Notwithstanding subparagraph (A), classified advertisements
for autobrokering services that measure two column inches or less are
exempt from the disclosure statement in subparagraph (A) pertaining
to price and availability.
   (3) Radio advertisements of a duration of less than 11 seconds
that do not reference specific line-makes or models of motor vehicles
are exempt from the disclosure statement required in subparagraph
(A).
   (c) Fail, within 48 hours, in writing to withdraw any
advertisement of a vehicle that has been sold or withdrawn from sale.
   (d) Advertise or represent a vehicle as a new vehicle if the
vehicle is a used vehicle.
   (e) Engage in the business for which the licensee is licensed
without having in force and effect a bond as required by this
article.
   (f) Engage in the business for which the dealer is licensed
without at all times maintaining an established place of business as
required by this code.
   (g) Include, as an added cost to the selling price of a vehicle,
an amount for licensing or transfer of title of the vehicle, which is
not due to the state unless, prior to the sale, that amount has been
paid by a dealer to the state in order to avoid penalties that would
have accrued because of late payment of the fees. However, a dealer
may collect from the second purchaser of a vehicle a prorated fee
based upon the number of months remaining in the registration year
for that vehicle, if the vehicle had been previously sold by the
dealer and the sale was subsequently rescinded and all the fees that
were paid, as required by this code and Chapter 2 (commencing with
Section 10751) of Division 2 of the Revenue and Taxation Code, were
returned to the first purchaser of the vehicle.
   (h) Employ any person as a salesperson who has not been licensed
pursuant to Article 2 (commencing with Section 11800), and whose
license is not displayed on the premises of the dealer as required by
Section 11812, or willfully fail to notify the department by mail
within 10 days of the employment or termination of employment of a
salesperson.
   (i) Deliver, following the sale, a vehicle for operation on
California highways, if the vehicle does not meet all of the
equipment requirements of Division 12 (commencing with Section
24000). This subdivision does not apply to the sale of a leased
vehicle to the lessee if the lessee is in possession of the vehicle
immediately prior to the time of the sale and the vehicle is
registered in this state.
   (j) Use, or permit the use of, the special plates assigned to him
or her for any purpose other than as permitted by Section 11715.
   (k) Advertise or otherwise represent, or knowingly allow to be
advertised or represented on behalf of, or at the place of business
of, the licenseholder that no downpayment is required in connection
with the sale of a vehicle when a downpayment is in fact required and
the buyer is advised or induced to finance the downpayment by a loan
in addition to any other loan financing the remainder of the
purchase price of the vehicle. The terms "no downpayment," "zero down
delivers," or similar terms shall not be advertised unless the
vehicle will be sold to any qualified purchaser without a prior
payment of any kind or trade-in.
   (l) Participate in the sale of a vehicle required to be reported
to the Department of Motor Vehicles under Section 5900 or 5901
without making the return and payment of the full sales tax due and
required by Section 6451 of the Revenue and Taxation Code.
   (m) Permit the use of the dealer's license, supplies, or books by
any other person for the purpose of permitting that person to engage
in the purchase or sale of vehicles required to be registered under
this code, or permit the use of the dealer's license, supplies, or
books to operate a branch location to be used by any other person,
whether or not the licensee has any financial or equitable interest
or investment in the vehicles purchased or sold by, or the business
of, or branch location used by, the other person.
   (n) Violate any provision of Article 10 (commencing with Section
28050) of Chapter 5 of Division 12.
   (o) Sell a previously unregistered vehicle without disclosing in
writing to the purchaser the date on which any manufacturer's or
distributor's warranty commenced.
   (p) Accept a purchase deposit relative to the sale of a vehicle,
unless the vehicle is present at the premises of the dealer or
available to the dealer directly from the manufacturer or distributor
of the vehicle at the time the dealer accepts the deposit. Purchase
deposits accepted by an autobroker when brokering a retail sale shall
be governed by Sections 11736 and 11737.
   (q) Consign for sale to another dealer a new vehicle.
   (r) Display a vehicle for sale at a location other than an
established place of business authorized by the department for that
dealer or display a new motor vehicle at the business premises of
another dealer registered as an autobroker. This subdivision does not
apply to the display of a vehicle pursuant to subdivision (b) of
Section 11709 or the demonstration of the qualities of a motor
vehicle by way of a test drive.
   (s) Use a picture in connection with any advertisement of the
price of a specific vehicle or class of vehicles, unless the picture
is of the year, make and model being offered for sale. The picture
shall not depict a vehicle with optional equipment or a design not
actually offered at the advertised price.
   (t) Advertise a vehicle for sale that was used by the selling
licensee in its business as a demonstrator, executive vehicle,
service vehicle, rental, loaner, or lease vehicle, unless the
advertisement clearly and conspicuously discloses the previous use
made by that licensee of the vehicle. An advertisement shall not
describe any of those vehicles as "new."



11713.1.  It is a violation of this code for the holder of a dealer'
s license issued under this article to do any of the following:
   (a) Advertise a specific vehicle for sale without identifying the
vehicle by its model, model-year, and either its license number or
that portion of the vehicle identification number that distinguishes
the vehicle from all other vehicles of the same make, model, and
model-year. Model-year is not required to be advertised for current
model-year vehicles. Year models are no longer current when ensuing
year models are available for purchase at retail in California. Any
advertisement that offers for sale a class of new vehicles in a
dealer's inventory, consisting of five or more vehicles, that are all
of the same make, model, and model-year is not required to include
in the advertisement the vehicle identification numbers or license
numbers of those vehicles.
   (b) Advertise the total price of a vehicle without including all
costs to the purchaser at time of sale, except taxes, vehicle
registration fees, the California tire fee, as defined in Section
42885 of the Public Resources Code, emission testing fees not
exceeding fifty dollars ($50), actual fees charged for certificates
pursuant to Section 44060 of the Health and Safety Code, finance
charges, and any dealer document preparation charge. The dealer
document preparation charge shall not exceed fifty-five dollars
($55).
   (c) (1) Exclude from an advertisement of a vehicle for sale that
there will be added to the advertised total price at the time of
sale, charges for sales tax, vehicle registration fees, the
California tire fee, the fee charged by the state for the issuance of
a certificate of compliance or noncompliance pursuant to a statute,
finance charges, and a dealer document preparation charge.
   (2) The obligations imposed by paragraph (1) are satisfied by
adding to the advertisement a statement containing no abbreviations
and that is worded in substantially the following form: "Plus
government fees and taxes, any finance charges, any dealer document
preparation charge, and any emission testing charge."
   (3) For purposes of paragraph (1), "advertisement" means an
advertisement in a newspaper, magazine, or direct mail publication
that is two or more columns in width or one column in width and more
than seven inches in length, or on a Web page of a dealer's Internet
Web site that displays the price of a vehicle offered for sale on the
Internet, as that term is defined in paragraph (6) of subdivision
(e) of Section 17538 of the Business and Professions Code.
   (d) Represent the dealer document preparation charge or
certificate of compliance or noncompliance fee, as a governmental
fee.
   (e) Fail to sell a vehicle to a person at the advertised total
price, exclusive of taxes, vehicle registration fees, the California
tire fee, the fee charged by the state for the issuance of a
certificate of compliance or noncompliance pursuant to a statute,
finance charges, mobilehome escrow fees, the amount of a city,
county, or city and county imposed fee or tax for a mobilehome, and a
dealer document preparation charge, which charges shall not exceed
fifty-five dollars ($55) for the document preparation charge and not
to exceed fifty dollars ($50) for emission testing plus the actual
fees charged for certificates pursuant to Section 44060 of the Health
and Safety Code, while the vehicle remains unsold, unless the
advertisement states the advertised total price is good only for a
specified time and the time has elapsed. Advertised vehicles shall be
sold at or below the advertised total price, with statutorily
permitted exclusions, regardless of whether the purchaser has
knowledge of the advertised total price.
   (f) (1) Advertise for sale, sell, or purchase for resale a new
vehicle of a line-make for which the dealer does not hold a
franchise.
   (2) This subdivision does not apply to a transaction involving the
following:
   (A) A mobilehome.
   (B) A recreational vehicle as defined in Section 18010 of the
Health and Safety Code.
   (C) A commercial coach, as defined in Section 18001.8 of the
Health and Safety Code.
   (D) An off-highway motor vehicle subject to identification as
defined in Section 38012.
   (E) A manufactured home.
   (F) A new vehicle that will be substantially altered or modified
by a converter prior to resale.
   (G) A commercial vehicle with a gross vehicle weight rating of
more than 10,000 pounds.
   (H) A vehicle purchased for export and exported outside the
territorial limits of the United States without being registered with
the department.
   (I) A vehicle acquired in the ordinary course of business as a new
vehicle by a dealer franchised to sell that vehicle, if all of the
following apply:
   (i) The manufacturer or distributor of the vehicle files a
bankruptcy petition.
   (ii) The franchise agreement of the dealer is terminated,
canceled, or rejected by the manufacturer or distributor as part of
the bankruptcy proceedings and the termination, cancellation, or
rejection is not a result of the revocation by the department of the
dealer's license or the dealer's conviction of a crime.
   (iii) The vehicle is held in the inventory of the dealer on the
date the bankruptcy petition is filed.
   (iv) The vehicle is sold by the dealer within six months of the
date the bankruptcy petition is filed.
   (3) Subparagraph (I) of paragraph (2) does not entitle a dealer
whose franchise agreement has been terminated, canceled, or rejected
to continue to perform warranty service repairs or continue to be
eligible to offer or receive consumer or dealer incentives offered by
the manufacturer or distributor.
   (g) Sell a park trailer, as specified in Section 18009.3 of the
Health and Safety Code, without disclosing in writing to the
purchaser that a park trailer is required to be moved by a
transporter or a licensed manufacturer or dealer under a permit
issued by the Department of Transportation or a local authority with
respect to highways under their respective jurisdictions.
   (h) Advertise free merchandise, gifts, or services provided by a
dealer contingent on the purchase of a vehicle. "Free" includes
merchandise or services offered for sale at a price less than the
seller's cost of the merchandise or services.
   (i) (1) Advertise vehicles, and related goods or services, at a
specified dealer price, with the intent not to supply reasonably
expectable demand, unless the advertisement discloses the number of
vehicles in stock at the advertised price. In addition, whether or
not there are sufficient vehicles in stock to supply a reasonably
expectable demand, when phrases such as "starting at," "from,"
"beginning as low as," or words of similar import are used in
reference to an advertised price, the advertisement shall disclose
the number of vehicles available at that advertised price.
   (2) For purposes of this subdivision, in a newspaper advertisement
for a vehicle that is two model-years old or newer, the actual
phrase that states the number of vehicles in stock at the advertised
price shall be printed in a type size that is at least equal to
one-quarter of the type size, and in the same style and color of
type, used for the advertised price. However, in no case shall the
phrase be printed in less than 8-point type size, and the phrase
shall be disclosed immediately above, below, or beside the advertised
price without intervening words, pictures, marks, or symbols.
   (3) The disclosure required by this subdivision is in addition to
any other disclosure required by this code or any regulation
regarding identifying vehicles advertised for sale.
   (j) Use "rebate" or similar words, including, but not limited to,
"cash back," in advertising the sale of a vehicle unless the rebate
is expressed in a specific dollar amount and is in fact a rebate
offered by the vehicle manufacturer or distributor directly to the
retail purchaser of the vehicle or to the assignee of the retail
purchaser.
   (k) Require a person to pay a higher price for a vehicle and
related goods or services for receiving advertised credit terms than
the cash price the same person would have to pay to purchase the same
vehicle and related goods or services. For the purpose of this
subdivision, "cash price" has the meaning as defined in subdivision
(e) of Section 2981 of the Civil Code.
   (l) Advertise a guaranteed trade-in allowance.
   (m) Misrepresent the authority of a salesperson, representative,
or agent to negotiate the final terms of a transaction.
   (n) (1) Use "invoice," "dealer's invoice," "wholesale price," or
similar terms that refer to a dealer's cost for a vehicle in an
advertisement for the sale of a vehicle or advertise that the selling
price of a vehicle is above, below, or at either of the following:
   (A) The manufacturer's or distributor's invoice price to a dealer.
   (B) A dealer's cost.
   (2) This subdivision does not apply to either of the following:
   (A) A communication occurring during face-to-face negotiations for
the purchase of a specific vehicle if the prospective purchaser
initiates a discussion of the vehicle's invoice price or the dealer's
cost for that vehicle.
   (B) A communication between a dealer and a prospective commercial
purchaser that is not disseminated to the general public. For
purposes of this subparagraph, a "commercial purchaser" means a
dealer, lessor, lessor-retailer, manufacturer, remanufacturer,
distributor, financial institution, governmental entity, or person
who purchases 10 or more vehicles during a year.
   (o) Violate a law prohibiting bait and switch advertising,
including, but not limited to, the guides against bait advertising
set forth in Part 238 (commencing with Section 238) of Title 16 of
the Code of Federal Regulations, as those regulations read on January
1, 1988.
   (p) Make an untrue or misleading statement indicating that a
vehicle is equipped with all the factory-installed optional equipment
the manufacturer offers, including, but not limited to, a false
statement that a vehicle is "fully factory equipped."
   (q) Affix on a new vehicle a supplemental price sticker containing
a price that represents the dealer's asking price that exceeds the
manufacturer's suggested retail price unless all of the following
occur:
   (1) The supplemental sticker clearly and conspicuously discloses
in the largest print appearing on the sticker, other than the print
size used for the dealer's name, that the supplemental sticker price
is the dealer's asking price, or words of similar import, and that it
is not the manufacturer's suggested retail price.
   (2) The supplemental sticker clearly and conspicuously discloses
the manufacturer's suggested retail price.
   (3) The supplemental sticker lists each item that is not included
in the manufacturer's suggested retail price, and discloses the
additional price of each item. If the supplemental sticker price is
greater than the sum of the manufacturer's suggested retail price and
the price of the items added by the dealer, the supplemental sticker
price shall set forth that difference and describe it as "added
mark-up."
   (r) Advertise an underselling claim, including, but not limited
to, "we have the lowest prices" or "we will beat any dealer's price,"
unless the dealer has conducted a recent survey showing that the
dealer sells its vehicles at lower prices than another licensee in
its trade area and maintains records to adequately substantiate the
claims. The substantiating records shall be made available to the
department upon request.
   (s) (1) Advertise an incentive offered by the manufacturer or
distributor if the dealer is required to contribute to the cost of
the incentive as a condition of participating in the incentive
program, unless the dealer discloses in a clear and conspicuous
manner that dealer participation may affect consumer cost.
   (2) For purposes of this subdivision, "incentive" means anything
of value offered to induce people to purchase a vehicle, including,
but not limited to, discounts, savings claims, rebates, below-market
finance rates, and free merchandise or services.
   (t) Display or offer for sale a used vehicle unless there is
affixed to the vehicle the Federal Trade Commission's Buyer's Guide
as required by Part 455 of Title 16 of the Code of Federal
Regulations.
   (u) Fail to disclose in writing to the franchisor of a new motor
vehicle dealer the name of the purchaser, date of sale, and the
vehicle identification number of each new motor vehicle sold of the
line-make of that franchisor, or intentionally submit to that
franchisor a false name for the purchaser or false date for the date
of sale.
   (v) Enter into a contract for the retail sale of a motor vehicle
unless the contract clearly and conspicuously discloses whether the
vehicle is being sold as a new vehicle or a used vehicle, as defined
in this code.
   (w) Use a simulated check, as defined in subdivision (a) of
Section 22433 of the Business and Professions Code, in an
advertisement for the sale or lease of a vehicle.
   (x) Fail to disclose, in a clear and conspicuous manner in at
least 10-point boldface type on the face of a contract for the retail
sale of a new motor vehicle that this transaction is, or is not,
subject to a fee received by an autobroker from the selling new motor
vehicle dealer, and the name of the autobroker, if applicable.
   (y) As used in this section, "make" and "model" have the same
meaning as is provided in Section 565.3 of Title 49 of the Code of
Federal Regulations.



11713.2.  It shall be unlawful and a violation of this code for any
manufacturer, manufacturer branch, distributor, or distributor branch
licensed under this code to coerce or attempt to coerce any dealer
in this state:
   (a) To order or accept delivery of any motor vehicle, part or
accessory thereof, appliance, equipment or any other commodity not
required by law which shall not have been voluntarily ordered by the
dealer.
   (b) To order or accept delivery of any motor vehicle with special
features, appliances, accessories or equipment not included in the
list price of such motor vehicles as publicly advertised by the
manufacturer or distributor.
   (c) To order for any person any parts, accessories, equipment,
machinery, tools, appliances, or any commodity whatsoever.
   (d) To participate in an advertising campaign or contest, any
promotional campaign, promotional materials, training materials,
showroom or other display decorations or materials at the expense of
the dealer.
   (e) To enter into any agreement with the manufacturer,
manufacturer branch, distributor, or distributor branch, or to do any
other act prejudicial to the dealer by threatening to cancel a
franchise or any contractual agreement existing between the dealer
and manufacturer, manufacturer branch, distributor, or distributor
branch. Notice in good faith to any dealer of the dealer's violation
of any terms or provisions of such franchise or contractual agreement
shall not constitute a violation of this article.



11713.3.  It is unlawful and a violation of this code for any
manufacturer, manufacturer branch, distributor, or distributor branch
licensed under this code to do any of the following:
   (a) To refuse or fail to deliver in reasonable quantities and
within a reasonable time after receipt of an order from a dealer
having a franchise for the retail sale of any new vehicle sold or
distributed by the manufacturer or distributor, any new vehicle or
parts or accessories to new vehicles as are covered by the franchise,
if the vehicle, parts, or accessories are publicly advertised as
being available for delivery or actually being delivered. This
subdivision is not violated, however, if the failure is caused by
acts or causes beyond the control of the manufacturer, manufacturer
branch, distributor, or distributor branch.
   (b) To prevent or require, or attempt to prevent or require, by
contract or otherwise, any change in the capital structure of a
dealership or the means by or through which the dealer finances the
operation of the dealership, if the dealer at all times meets any
reasonable capital standards agreed to by the dealer and the
manufacturer or distributor, and if a change in capital structure
does not cause a change in the principal management or have the
effect of a sale of the franchise without the consent of the
manufacturer or distributor.
   (c) To prevent or require, or attempt to prevent or require, a
dealer to change the executive management of a dealership, other than
the principal dealership operator or operators, if the franchise was
granted to the dealer in reliance upon the personal qualifications
of that person.
   (d) (1) Except as provided in subdivision (t), to prevent or
require, or attempt to prevent or require, by contract or otherwise,
any dealer, or any officer, partner, or stockholder of any
dealership, the sale or transfer of any part of the interest of any
of them to any other person. No dealer, officer, partner, or
stockholder shall, however, have the right to sell, transfer, or
assign the franchise, or any right thereunder, without the consent of
the manufacturer or distributor except that the consent shall not be
unreasonably withheld.
   (2) (A) For the transferring franchisee to fail, prior