The high prices and heavy demand for luxury vehicles in countries like China caused by tariffs on imported vehicles has created an arbitrage opportunity for the exporting high priced luxury vehicles overseas. In some cases, exporters can sell a vehicle purchased in this country to a buyer in foreign markets for two to three times of what they would sell in the United States. To protect their overseas markets, many automobile manufactures have implemented a “Non-Export Policy” requiring that each purchaser execute a Non-Export Agreement. The typical agreement requires that the purchaser will not export the vehicle outside the United States for up to one year from the date of delivery. If a purchaser if found to have violated the agreement he or she is subject to payment of liquidated damages.
In the recent case of Manor Motorcar v. Sourvanos, Frank DeLuca represented the Plaintiff dealership regarding the Defendant’s violation of a Non-Export Agreement. The Defendant purchased a Mercedes-Benz SUV from Plaintiff’s dealership and executed a Non-Export Agreement. The Defendant immediately exported the vehicle to China in violation of a Non-Export Agreement. Plaintiff filed suit to enforce the terms of the Non-Export Agreement and the Defendant challenged the enforceability of the Agreement. The parties filed Motions for Summary Judgment and the Court found in favor of Plaintiff and held that the Non-Export Agreement was enforceable. Defendant thereafter filed an appeal and the Appellate Court affirmed the lower Court’s ruling and found that the Non-Export Agreement was a valid and enforceable
contract.
If you have any questions regarding this case or any other Michigan business/commercial litigation related dispute, please contact Frank M. DeLuca at (248) 940-2000.