Could a Wyoming state agency accept a vehicle bid from a dealer that lacked a franchise for that make?

Plain-English summary

In 1998, Wyoming agencies asked what happened if the lowest bidder on a vehicle purchase was not franchised or licensed to sell the make it offered. The Attorney General concluded that the dealer could not legally submit the bid under the Wyoming Motor Vehicle Franchise Act.

The opinion relied on Wyo. Stat. § 31-16-108, which prohibited a dealer from displaying, exchanging, or selling a new vehicle without a valid franchise for that make. It also relied on § 31-16-124(c), which made a written instrument violating the Act "null and void and without force and effect." A completed state purchase from the nonfranchised dealer therefore would have been void.

The opinion identified one narrow exception. Under § 31-16-103(d), a dealer that had lost a franchise could dispose of new vehicles already in stock and could bid one of those vehicles. The AG suggested that future bid specifications restrict bidding to franchised dealers.

Currency note

This opinion was issued in 1998. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

What the opinion meant at the time

Wyoming procurement officers

The opinion treated franchise status as a legal qualification to bid, not merely a preference among otherwise eligible dealers. If the bidder lacked the required franchise, the agency could not cure the problem by accepting the low price because the resulting purchase contract would be void under § 31-16-124(c).

Vehicle dealers

A dealer could bid a new vehicle only if it held a franchise for that make. The exception discussed in the footnote covered vehicles already in the dealer's stock when its franchise ended.

State agencies drafting bid requests

The AG suggested writing the franchise requirement into future bid specifications to prevent agencies from reaching a low bid that they could not lawfully accept.

Common questions

Could the state accept the lowest vehicle bid if the dealer lacked the manufacturer's franchise?

No. The opinion concluded that the dealer could not legally submit the bid and that a purchase contract violating the Franchise Act would be void.

Why did the dealer need a franchise for the specific vehicle make?

The Act defined a franchise as the agreement authorizing a dealer to sell a specified make of new vehicles, and § 31-16-108 prohibited selling a new vehicle without that authorization.

Was there any exception for a former franchise dealer?

Yes. The opinion's footnote said § 31-16-103(d) allowed a dealer to dispose of new vehicles it had on hand when it lost the franchise.

Background and statutory framework

The question arose after Wyoming agencies used competitive requests for proposals to acquire vehicles and received complaints that some low bidders were not licensed or franchised for the vehicles offered.

The opinion read three provisions together. Wyo. Stat. § 31-16-101(a)(x) defined the manufacturer-dealer agreement that authorized sales of a specified make. Wyo. Stat. § 31-16-108 made a sale without that franchise unlawful. Wyo. Stat. § 31-16-124(c) supplied the consequence by making a violating agreement or other written instrument void.

Citations

• Wyo. Stat. §§ 31-16-101 through 31-16-124, Wyoming Motor Vehicle Franchise Act
• Wyo. Stat. § 31-16-101(a)(x), definition of franchise
• Wyo. Stat. § 31-16-108(a)(x), sale of a new vehicle without a valid franchise
• Wyo. Stat. § 31-16-124(c), violating agreements are void
• Wyo. Stat. § 31-16-103(d), disposition of vehicles held when a franchise ended

Source

• Landing page: https://ag.wyo.gov/formal-opinions
• Original PDF: https://drive.google.com/file/d/0B_4EQ9PebvQId2dLMjFkcHhVbzg/view?resourcekey=0-tyBucsiSBP8OZSYWOuRJdw

Original opinion text

January 16, 1998

OPINION NO. 98-002

TO: Larry Wilde, University of Wyoming

Mac Landen, Department of Administration and Information

Roxanne Hudson, Game and Fish Commission

James Haefele, P.E., Wyoming Transportation Committee, WYDOT

FROM: William U. Hill, Attorney General

Michael L. Hubbard, Deputy Attorney General

Ron Arnold, Senior Assistant Attorney General

Lawrence A. Bobbitt, III, Senior Assistant Attorney General

QUESTION: What is the legal effect of a state agency accepting a bid by a vehicle dealer who is not franchised to sell the particular vehicle offered?

ANSWER: See Discussion.

DISCUSSION

This office is advised that some agencies have attempted to acquire motor vehicles through the competitive bidding process and accordingly have issued a request for proposal to various car dealers. Further, we are advised that in some cases, a dealer who had the lowest bid was not franchised or licensed to sell the type of motor vehicle he was offering to the agency. Other car dealers complained about this circumstance, and this office has been asked for advice as to the legal consequences of such a transaction.

The Wyoming Motor Vehicle Franchise Act, WYO. STAT. §§ 31-16-101 through 31-16-124 is very specific as to the qualifications of vehicle dealers to offer to sell or sell particular motor vehicles.

In particular, WYO. STAT. § 31-16-108 sets forth "Unlawful acts" and partially provides:

> (a) No person required to be licensed under this act shall:
>
> ***
>
> (x) Display for sale, exchange or sell any new motor vehicle for which the vehicle dealer does not hold a valid franchise; (emphasis added)

A franchise is defined in WYO. STAT. § 31-16-101(a)(x) as:

> . . . a contract or agreement between a vehicle dealer and a manufacturer or its distributor or factory branch by which the dealer is authorized to engage in the business of selling any specified make of new vehicles; . . . (emphasis added)

Consequently, a motor vehicle dealer must have a franchise for the particular vehicle that he is intending to sell. If there is no franchise, then the dealer is operating in violation of the Wyoming Motor Vehicle Franchise Act.1

The Wyoming Motor Vehicle Franchise Act prohibits a non-franchised vehicle dealer from offering to sell or selling a particular franchised vehicle. Consequently, where the dealer has not been enfranchised or licensed to sell the line or make of vehicles under Wyoming law, it may not legally submit a bid.

Finally, the Wyoming Motor Vehicle Franchise Act specifically sets forth the legal effect of any contract made in violation of its provisions. WYO. STAT. § 31-16-124(c) provides that: "Any provision of any agreement, franchise, waiver, novation or other written instrument which is in violation of any section of this act is null and void and without force and effect." Thus, any state contract consummating a purchase of a vehicle from a nonfranchised dealer would be void.

We suggest that any future bid specifications contain language that restricts bidding to franchised dealers to avoid potential violations of the foregoing Act.

1 WYO. STAT. § 31-16-103(d), does authorize a vehicle dealer to dispose of the stock of new vehicles which the dealer had on hand when he lost the franchise. Thus, this dealer could submit a bid although he does not have a current franchise.