2021 Tennessee Code
Part 1 - Motor Vehicle Sales Licenses
§ 55-17-114. Grounds for Denial, Suspension, or Revocation of License

CONDITIONAL DELIVERY AGREEMENT THIS TRANSACTION IS NOT FINAL YEAR: MAKE: MODEL: VIN#: I understand that I am taking possession of this vehicle prior to approval from a financial institution and that this transaction is conditioned upon final approval by a lender and funding to the Dealer. I further understand that by taking possession of this vehicle I have agreed to its purchase at the price agreed upon with the Dealer as shown on the financing contract. I give the Dealer authorization to investigate my credit and place the financing contract with the lender of their choosing. I understand that if the Dealer is unable to obtain final funding of the financing contract within ( ) business days, or if I am unable to obtain financing of my own within 24 hours after notification from the Dealer that the financing contract has been denied, I will be required to return the vehicle to the Dealer. I agree that if I do not promptly return the vehicle that the Dealer may repossess the vehicle from me wherever it may be found. If a lender requires additional conditions from me before accepting the contract, I will use my best efforts to immediately comply with such conditions. If I do not meet or agree to accept any additional conditions or terms, this purchase and the financing contract will be void. I agree that the Dealer has the right to rely on any representation made by me in connection with the purchase contract and the financing contract, including information I provided on the credit application. In the event any representations are incorrect or false, the Dealer has the right to cancel the purchase and the financing contract immediately. I understand that I am liable for any personal injuries and physical damage that might occur to the vehicle or to other persons or property due to my operation of the vehicle, including any fines charged against the vehicle, even in the event that I am required to return the vehicle. I agree to indemnify the Dealer against such losses. In addition, I have provided evidence of collision/comprehensive and liability insurance which will cover any damage which might occur to the vehicle or other property or persons during my operation of the vehicle. Until this is final, I am responsible for any payments due or to come due on my trade-in vehicle. Dealer: (Type in or stamp dealer name) Customer(s) Print Name Date
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shall not be subject to this subsection (c);
(a) The license holder has failed to post in a prominent location notice of this subdivision (a)(1)(G); or
The license holder has failed to print on the repair contract notice of this subdivision (a)(1)(G); or
The license holder need not retain any parts not returned to the customer after the motor vehicle has been returned to the customer.
The commission shall promulgate a rule to provide that consumer information regarding chapter 24 of this title will be made available to their customers.
(1) In addition to the grounds contained in subsection (a), the commission may deny an application for a license or revoke or suspend the license of a motor vehicle dealer or salesperson who:
Has required the purchaser of a motor vehicle as a condition of sale and delivery thereof to also purchase special features, appliances, accessories or equipment not desired or requested by the purchaser, unless the features, appliances, accessories or equipment are the type that are ordinarily installed on the vehicle by the manufacturer or distributor when the vehicle is received or acquired by the dealer;
Has represented or sold as a new or unused motor vehicle any vehicle that has been operated for demonstration purposes or that is otherwise a used motor vehicle;
Has sold or offered for sale as a new or unused motor vehicle any motor vehicle for which the dealer or salesperson cannot secure for the purchaser of the motor vehicle such new car warranty as may be extended by the manufacturer of the vehicle to purchasers of one (1) of its new vehicles, unless the fact that the vehicle is being sold without a manufacturer's warranty is communicated to the purchaser and disclosed prominently in writing on the bill of sale;
Has no established place of business that is used or will be used primarily for the purpose of selling, buying, displaying, repairing or servicing motor vehicles;
Resorts to or uses false or misleading representations in connection with that person's business as a motor vehicle dealer or salesperson; provided, that dealers are specifically authorized to charge a document preparation fee, processing fee or servicing fee in addition to the sales price of the motor vehicle and these fees shall not be deemed to be a false or misleading representation made in connection with the sale of a motor vehicle, nor a violation of the Tennessee Consumer Protection Act of 1977, compiled in title 47, chapter 18, part 1; and provided further, that the amount of these fees is separately stated and clearly and conspicuously disclosed on the face of the sales contract or buyer's invoice prior to the buyer's execution thereof. For purposes of this subdivision (b)(1)(E), the disclosure shall be deemed to be “conspicuous” if it is listed on the contract or invoice in the same place and manner and in type face no smaller or less obvious than the other type face used therein with respect to other charges listed, and shall be deemed to be “clear” if it states that the charge is a fee for “document preparation,” “processing” or “servicing” or language or abbreviations to the same or a similar effect. The authorization provided by this subdivision (b)(1)(E) shall not apply if the dealer represents to the buyer that the fee is required by or will be paid to any governmental agency or entity;
Gives false or fictitious names or addresses for the purpose of registering the sale of a motor vehicle or who makes application for the registration of a motor vehicle in the name of any person other than the true owner;
Employs any person who has not been licensed as a salesperson pursuant to this part;
Fails to reasonably supervise agents, salespersons or employees;
Uses or permits the use of special license plates assigned to that person for any purpose other than those permitted by law;
Disconnects, turns back or resets the odometer of any motor vehicle in violation of state or federal law, except as provided for in § 39-14-132(b);
Commits any act or practice involving the purchase, sale, repair or servicing of a motor vehicle or the parts or accessories of a motor vehicle, that, in the opinion of the commission, is false, fraudulent or deceptive;
Increases the price of a new motor vehicle to a retail customer after the dealer has accepted an order of purchase or a contract from a buyer, except that a trade-in vehicle may be reappraised if it subsequently suffered damage, or parts or accessories have been removed. Price differences applicable to new models or a new series of motor vehicles at the time of the introduction of new models or new series shall not be considered a price increase or price decrease;
Possesses any certificate of title that is not a closed title, unless the motor vehicle dealer maintains an executed consignment form developed by the commission on each motor vehicle that does not have a closed title;
Issues more temporary plates than allowed by law or fails to maintain a record of the issuance of temporary plates;
Engaged in curbstoning, as defined in § 55-16-103;
Prior to a motor vehicle being subject to a public automobile auction, the public automobile auctioneer shall verify that the motor vehicle has a clean and unencumbered title, by obtaining a valid motor vehicle title history from the department of revenue or if the motor vehicle is registered in a state other than this state, the appropriate titling agency in the other state;
All public automobile auctions must take place at the established place of business listed on the motor vehicle dealer license;
The public automobile auction shall not sell new or unused motor vehicles or vehicles with a manufacturer's statement of origin;
The public automobile auctioneer shall take possession of and retain title to each motor vehicle offered for sale at the auction. If the sale is finalized on a motor vehicle, the owner of the vehicle shall sign the title over to the public automobile auctioneer who shall then sign the title over to and deliver the title to the buyer on the date of the sale. If a sale of the vehicle is not made, then the unsigned title shall be returned to the owner of the vehicle who offered the vehicle for sale at the auction. At all times, the public automobile auction shall be deemed the seller of the motor vehicle with the same duties and responsibilities as other licensed motor vehicle dealers; or
Fails to maintain a record of a customer's motor vehicle liability insurance coverage or other proof of financial responsibility for any customer who is issued a temporary plate by a motor vehicle dealer who finances the sale of used motor vehicles and retains the title to such vehicles. The record shall be maintained in the same manner or for the same period of time as the record of issuance of temporary plates described in subdivision (b)(1)(N).
Whenever any licensee pleads guilty or is convicted of the offense of odometer tampering or any other criminal offense involving moral turpitude, the licensee must within sixty (60) days so notify the commission and must provide the commission with certified copies of the conviction. The licensee's license shall automatically be revoked sixty (60) days after the guilty plea or conviction unless, during the sixty-day period, the licensee makes a written request to the commission for a hearing. Following the hearing, the commission in its discretion may impose upon the licensee any sanction permitted by this part.
A motor vehicle dealer shall pay off the agreed upon indebtedness on the trade-in vehicle within thirty (30) days after the dealer has received actual payment on the financing contract for the new motor vehicle purchase.
(A) Notwithstanding any law to the contrary, the commission may revoke or suspend the license of or levy a civil penalty against any motor vehicle dealer who, in a motor vehicle transaction that is conditioned upon final funding to the dealer by a third-party financial institution, fails to:
Provide in writing to the customer the conditional delivery agreement set forth in subdivision (b)(4)(D);
Retain possession of any vehicle used by the consumer as consideration, commonly known as a trade-in vehicle, until the dealer has received funding from the financial institution;
Allow the consumer to void the motor vehicle transaction if any of the terms of the transaction change after the consumer has approved and accepted the terms; or
Pay off the agreed upon indebtedness on the trade-in vehicle within thirty (30) days after the dealer has received funding from the financial institution on the financing contract for the new purchase.
As used in this subdivision (b)(4), “funding” means actual payment to the dealer by the financial institution purchasing the financing contract or lease.
Compliance with subdivisions (b)(4)(A) and (B) may not be waived by any consumer.
The form of the conditional delivery agreement shall be as follows: