Out-of-State buyers create risk for Texas Auto Dealers

The internet can be a wonderful thing. New and exciting applications are being discovered every day that make our world seem smaller. On the business side, the internet has expanded our selling opportunities and increased our buying choices. Certainly, those who buy and sell motor vehicles have found a brave new world out there where markets are no longer limited by geographical or mileage restraints.

There has also been a dark side to the internet that seems to follow all new innovations as

technology shoots out ahead of the laws and regulations that were designed to protect citizens from theft and fraud. Most of our laws were written well before the internet was even a gleam in some computer expert’s (or Al Gore’s) eye.
And just as good and honest businesspeople look for opportunities and markets that something like the internet can bring, so do crooks and thieves see a wonderful universe of new potential victims that they could have never reached under the old ways. Dealing with internet fraud and theft has been a challenge for law enforcement officials who have been forced to expand their activities to a worldwide stage and to incorporate new technologies into their bags of police tools.

And even beyond the scope of fraud and theft on the net, are new issues involving the relationship of buyer and seller when a civil dispute arises.

For instance, legal disputes arise over the condition of a motor vehicle even when the potential buyer puts his or her hands on the vehicle and possibly has a mechanic inspect it. Imagine, then, what can happen when a buyer never actually lays eyes or hands on the vehicle, but relies solely on photographs and written descriptions.

One of the problems that rarely existed before the internet that the judicial system has had to contend with on an increasingly common basis, is: When does a state’s courts have jurisdiction over a resident of another state who sells to a resident of that state over the internet? A number of Texas dealers have had to face up to this issue when an unhappy out-of-state buyer decided to sue over the transaction in the buyer’s home state. We have seen lawsuits brought against Texas dealers in New Jersey, California, Florida, West Virginia, and Hawaii, to name a few….. (continue…)

Original source: TIADA
By Michael W. Dunagan
TIADA General Counsel

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