Opinion ID: 2710281
Heading Depth: 3
Heading Rank: 1

Heading: the source of contractual rights

Text: The MVDA in effect at the time of both the 2007 Chrysler-LaFontaine Dealer Agreement and 2010 Chrysler-IHS LOI defined “Dealer agreement” as an agreement or contract in writing between . . . a manufacturer and a . . . new motor vehicle dealer . . . which purports to establish the legal rights and obligations of the parties to the agreement or contract with regard to the purchase and sale or resale of new and unaltered motor vehicles and accessories for motor vehicles.[16] 12 Debano-Griffin v Lake Co, 493 Mich 167, 175; 828 NW2d 634 (2013). 13 Fane v Detroit Library Comm, 465 Mich 68, 74; 631 NW2d 678 (2001). 14 Morales v Auto-Owners Insurance Co (After Remand), 469 Mich 487, 490; 672 NW2d 849 (2003). 15 Brewer v A D Transp Express, Inc, 486 Mich 50, 53; 782 NW2d 475 (2010). 16 MCL 445.1562(2), as amended by 1998 PA 456 (emphasis supplied). 8 This provision of the MVDA specifies three key elements to a Dealer Agreement: (1) a writing (2) establishing the legal rights and obligations of the parties (3) with regard to the purchase and sale or resale of new motor vehicles and accessories for motor vehicles. Applying these elements to the 2007 Chrysler-LaFontaine Dealer Agreement compels the undisputed conclusion that that agreement constitutes a “dealer agreement” within the meaning of the MVDA. The agreement is in writing, purports to establish the parties’ legal rights and obligations, and sets out specific “Products Covered” in a “Motor Vehicle Addendum.” The agreement therefore complies with the requirements of theneffective MCL 445.1562(2), and establishes the parties’ contractual rights.17 And because MCL 445.1566(1) provided for a six-mile relevant market area at the time Chrysler and LaFontaine entered into their Dealer Agreement, the six-mile radius will govern that agreement unless the 2010 Amendment expanding the relevant market area is retroactively applicable to existing dealer agreements. Indeed, it is well settled that “the obligation of a contract consisted in its binding force on the party who makes it. This depends upon the laws in existence when it is made. They are necessarily referred to in all contracts, and form a part of them, as the measure of obligation to perform them by the one party and right acquired by the other.” The doctrine asserted in that case . . . applies to laws in reference to which the contract is made, and forming a part of the contract.[18] 17 The 2010 Amendment also amended the definition of “dealer agreement,” renumbered as MCL 445.1562(3), but the scope of that amendment is immaterial here. 18 Crane v Hardy, 1 Mich 56, 62-63 (1848), quoting McCracken v Hayward, 43 US 608, 612; 11 L Ed 397 (1844) (emphasis supplied). See also State Hwy Comm’r v Detroit City Controller, 331 Mich 337, 352; 49 NW2d 318 (1951), quoting Von Hoffman v City of Quincy, 71 US 535, 550; 18 L Ed 403 (1866) (stating that it is “ ‘settled that the laws which subsist at the time and place of the making of a contract, and where it is to be performed, enter into and form a part of it, as if they were expressly referred to and 9 Before reaching the issue of retroactivity, however, we must also consider the 2010 LOI between Chrysler and IHS and whether that agreement similarly meets the MVDA’s definition of “dealer agreement.” Like the 2007 Chrysler-LaFontaine Dealer Agreement, the LOI between Chrysler and IHS is a writing executed by both parties. However, while the language of this latter agreement speaks in terms of “requirements” and “breaches,” and purports to constitute Chrysler and IHS’s “entire agreement concerning the establishment of the Facility,” the LOI is not a “dealer agreement” within the meaning of the MVDA because it does not establish their rights and obligations with regard to the purchase and sale or resale of new motor vehicles and accessories for motor vehicles, as the MVDA requires. Rather, the LOI speaks almost entirely to requirements IHS must meet before Chrysler will “accept [IHS’s] offer to enter into an Agreement in its then-customary form” and likewise contemplates conditions IHS must satisfy “[b]efore [Chrysler] enters into an Agreement with [IHS] . . . .”19 At most, then, the LOI is akin to an agreement to agree to a Dealer Agreement. While it is “ ‘well incorporated in its terms.’ ”). 19 Indeed, at no point does the LOI purport to establish the types or numbers of automobiles Chrysler would provide to IHS, wholesale purchase price for any such vehicles, or any other terms relevant to the purchase and sale or resale of new motor vehicles and motor vehicle accessories. The only semblance of any such terms occurs in Paragraph 8 of the LOI, which provides that the precise terms “will change based on several factors, including changes that occur in the total industry new vehicle sales, changes in sales of new like-line vehicles in the sales locality, and changes in the number of like-line dealers in the sales locality.” Chrysler explicitly states that it “does not predict the number of new vehicles that [Chrysler] will sell to [IHS] or that [IHS] may sell.” Nor does the LOI establish either party’s rights or obligations regarding the purchase and sale or resale of new motor vehicles and accessories. Rather, it left these terms—terms essential to a Dealer Agreement—for later determination. 10 recognized that it is possible for parties to make an enforceable contract binding them to prepare and execute a subsequent agreement,’ ” an agreement to agree is not enforceable where “ ‘the document or contract that the parties agree to make is to contain any material term that is not already agreed on . . . .’ ”20 Accordingly, the LOI was not a Dealer Agreement pursuant to MCL 445.1562(2) as was in effect at the time Chrysler and IHS executed their LOI. Chrysler and IHS therefore had no contractual rights by way of the 2010 LOI with which retroactive application of the nine-mile relevant market area could interfere.