Pub. 1 2019-2020 Issue 4

32 Why the PaperworkMatters Terrence J. O’Loughlin, J.D., M.B.A. Director of Compliance, The Reynolds and Reynolds Company R eynolds & Reynolds and the CNCDA periodically con- vene meetings with outside counsel and other interest- ed parties to review California dealer forms. Revisions are sometimes made to the documents to reflect the changing legal landscape or for business reasons. Of course, should any legal reason arise, in between these meetings, such as a statute or regulation change, or a court deci- sion, the forms would be immediately updated. Reynolds and the CNCDA recognize as smart dealers do that the “paperwork” can insulate a dealer from grave legal peril. If a dealer knew that his deal jackets were going to be subpoenaed and carefully examined, how much more would that dealer appreciate these documents? What are the key reasons dealer documents should be valued? First of all, dealers should be cognizant of the fact that the paperwork is the last defense a dealer has against an investigation or a lawsuit. It can’t be changed after the fact. Government regulators, class action attorneys, and plaintiff’s counsel use documents against dealers if they are not appropri- ately drafted or populated. Second, these agreements document the lifelong relationship between the consumer and the dealer. The docu- ments remain relevant for many years, long after the consumer has driven the vehicle off the lot. The documents should anticipate as many problems as possible that may arise during this lengthy relationship. Reynolds and the CNCDA, and its drafting partners, make every effort to draft the docu- ments to redress foreseeable poten- tial future problems. Third, there are other legal requi- sites that must be included in the documentation. Federal and state law dictate the format and disclo- sures needed for these documents. For example, disclosures, format of the information, and quoted regula- tory language must all be exact. Moreover, effective dates, form length, font size and color, face and backer, legibility, simple language, copyright, multi-part forms, verbatim language, and internal language form consistency, necessitate special attention. It is also worth noting that the front and the back of these documents can be equally important. Effective Date Legally required document disclo- sures in forms periodically change due to legislative or regulatory ac- tions. These new disclosures, conse- quently, must be used beginning with a date certain specified in the law. This is the effective date. Form Length Form length addresses consumer protection as one form means that all the language can be seen in that document. Pages cannot be lost, or consumers can’t be misdirected, as it could be done if there were a series of pages. Font Size and Color Some statutes and regulations specifically prescribe the type, size, or the color of the type or font. In addition, the font may be required to be emboldened. In other cases, language must appear separately in a