Section 13-8-17. Warranty agreements; disapproval of claims under warranty agreements; special handling of claims; calculation of compensation to dealer for warranty work; amounts owed to a dealer; audit of warranty claims

   (a) Every manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division shall provide a fair and reasonable warranty agreement on any new unit of equipment which it sells and shall fairly compensate each of its dealers for labor and parts used in fulfilling such warranty agreement. All claims for payment under such warranty agreements made by dealers under this subsection for such labor and parts shall be paid within 30 days following their approval. All such claims shall be either approved or disapproved within 30 days after their receipt; and, when any such claim is disapproved, the dealer who submits it shall be notified in writing of its disapproval within such period; and each such notice shall state the specific grounds upon which the disapproval is based. Any special handling of claims required of the dealer by the manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division, and not uniformly required of all dealers of that make, may be enforced only after 30 days' notice in writing to the dealer and upon good and sufficient reason.

(b) The minimum lawful basis for compensating said dealer for warranty work as provided for in this subsection shall be calculated for labor in accordance with the reasonable and customary amount of time required to complete such work, expressed in hours and fractions of hours multiplied by the dealer's established hourly retail labor rate. Prior to filing a claim for reimbursement for warranty work, the dealer must notify the applicable manufacturer, wholesaler, or distributor of his or her hourly retail labor rate. The minimum lawful basis for compensation to the dealer for parts used in fulfilling said warranty work shall be at the dealer's costs thereof, including all freight and handling charges applicable thereto, plus 15 percent of said sum to reimburse the dealer's reasonable costs of doing business and providing such warranty service on the manufacturer's behalf.

(c) It shall be unlawful to deny, delay payment for, or restrict a claim by a dealer for warranty service or parts, incentives, hold-backs, or other amounts owed to a dealer unless the denial, delay, or restriction is the direct result of a material defect in the claim that affects its validity.

(d) A manufacturer, distributor, or wholesaler may audit warranty claims submitted by its dealers only for a period of up to one year following payment of such claims and may charge back to its dealers only those amounts based upon paid claims shown by audit to be invalid; provided, however, that this limitation shall not apply in any case of fraudulent claims.

Code 1981, § 13-8-17, enacted by Ga. L. 1993, p. 1585, § 4; Ga. L. 2002, p. 1101, § 1.