(A) Each manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division must fulfill properly a warranty agreement and compensate adequately and fairly each of its equipment dealers for labor and parts. All claims made by equipment dealers pursuant to this section for the labor and parts and pursuant to § 39-6-90 must be paid within thirty days following their approval. All claims must be approved or disapproved within thirty days after their receipt. The equipment dealer who submits a disapproved claim must be notified in writing of its disapproval within that period, and the notice must state the specific grounds for the disapproval. Special handling of claims required by the manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division, but not uniformly required of all dealers of that make, may be enforced only after thirty days’ notice in writing of good and sufficient reason.

(B) An audit for sales incentives, service incentives, rebates, or other forms of incentive compensation may include only the twelve-month period immediately following the date of the termination of the incentive compensation program. This limitation is not effective in the case of fraudulent claims.

Terms Used In South Carolina Code 39-6-100

  • Distributor: means a person who sells or distributes new equipment to equipment dealers or who maintains distributor representatives within the State. See South Carolina Code 39-6-20
  • Distributor branch: means a branch office maintained by a distributor that sells or distributes new equipment to equipment dealers. See South Carolina Code 39-6-20
  • Equipment: means machinery, implements, or mechanical devices or apparatuses used in farming, construction, or industry and any outdoor power equipment, but not including:

    (a) motor vehicles required to be registered pursuant to § 56-3-110;

    (b) motorcycles as defined in § 56-16-10;

    (c) outdoor power equipment whose primary source of power is a two-cycle or electric motor;

    (d) "all terrain vehicles" or "ATVs" that are three-and-four-wheeled motorized vehicles, generally characterized by large, low-pressure tires, a seat designed to be straddled by the operator and handlebars for steering, which are intended for off-road use by an individual rider on various types of nonpaved terrain;

    (e) cranes; or

    (f) pneumatic tires, tubes, and flaps and related products and components associated with tires, including tires used in farm, construction, industrial, outdoor power, mining, and other on-and-off road applications. See South Carolina Code 39-6-20
  • equipment dealer: means a person who sells or attempts to effect the sale of equipment, but not including a:

    (a) distributor or wholesaler;

    (b) receiver, trustee, administrator, executor, guardian, or other person appointed by or acting pursuant to the judgment or order of a court;

    (c) public officer while performing his official duties;

    (d) person disposing of equipment acquired for his own use and used in good faith, not for the purpose of avoiding the law;

    (e) finance company or other financial institution that sells repossessed equipment;

    (f) single line dealer primarily engaged in the retail sale and service of off-road construction and earth-moving equipment. See South Carolina Code 39-6-20
  • Factory branch: means a branch office maintained by a manufacturer that makes or assembles equipment for sale to distributors or equipment dealers or that is maintained for directing and supervising the representatives of the manufacturer. See South Carolina Code 39-6-20
  • Manufacturer: means a person engaged in the business of manufacturing or assembling new and unused equipment. See South Carolina Code 39-6-20

(C) It is unlawful to deny, delay payment for, or restrict a claim by a dealer for payment or reimbursement for warranty service or parts, incentives, hold-backs, or other amounts owed to the dealer unless the denial, delay, or restriction is the direct result of a material defect in the claim that affects its validity, except that the manufacturer, distributor, distributor branch or division, factory branch or division, or wholesale branch or division may withhold payment as setoff against obligations otherwise owed by the dealer to the manufacturer, distributor, distributor branch or division, factory branch or division, or wholesale branch or division.

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