NEDA Advises Dealers On Liability Protection

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The Northeast Dealer Assn. recently published a very important article concerning dealer liability and response when servicing equipment that has disabled or removed safety systems or components. Dealers can protect their businesses when consumers choose not to protect themselves by having customers sign a certified release. Dealers may incur additional liabilities when selling or servicing equipment with missing, defective, malfunctioning or disabled safety devices. There are several ways to limit a dealer’s liability in these situations.


What can you do as dealers with equipment for which you cannot purchase ROPS retrofitting, or for which the cost of retrofitting ROPS could be more than the value of the unit? The prudent approach is not to take the machine as a trade-in or, if accepted on trade-in, not to resell it. While there are several exceptions to requirements for ROPS, such as working around orchards and barns, as a dealer you should not make a judgment regarding the intended use of the unit when in the hands of your customer. The machine should be delivered with ROPS in place, and if the purchaser wants to remove ROPS it is his or her decision.

The same is true with other safety devices. Equipment—whether it is agricultural, construction, or outdoor power equipment—should not be sold without operational safety devices in place.

In The Shop

Occasionally, a service technician may encounter a customer wanting service on equipment that has missing, defective, malfunctioning or disabled safety devices. The problem may be spotted before service begins or the problem may be discovered during the service process. The dealership should immediately report the problem to the customer and recommend its repair/replacement/re-connection at the customer’s cost. If the customer refuses to have the problem fixed, then it will be a business decision of the dealership whether or not to proceed with the repair.

If the dealership proceeds with the repair upon the customer’s refusal to fix the safety device, a certification or release agreement should be signed by the owner of the equipment before work is continued. Such a release allows the dealership to prove that the owner knew of the safety concern yet refused to remedy it. It would presumably make the owner liable and divert liability from the dealership.

Use of these releases does not guarantee freedom from liability, but it offers a good defense for avoiding or reducing liability.

A customer certification raises the level of safety awareness to the dealer and to the customer, but it does not ensure that the dealer will not be held liable for injuries resulting from missing/defective/disabled safety devices. It is evidence that the purchaser acknowledges safety device(s) are not in place. The purchaser cannot, however, acknowledge for another person that ROPS are not in place and he or she cannot waive on behalf of the other person any rights against the dealer.

A release is intended to address this specific concern by requiring the customer to agree to indemnify and hold the dealer harmless. This may not be effective in all cases, but it at least gives the dealer another person or entity to look to in the event of claims arising out of safety devices not being in place or disconnected. In addition to federal regulations, many states have laws requiring safety devices.

The Northeast Equipment Dealer Assn. has a three-part form available to members that provide customer certification, and it acknowledges missing/disabled safety devices and includes a hold harmless agreement.

Osha Note

Upon research with attorneys and Osha offices, we cannot find any specific Osha regulations that prohibit service technicians from working on equipment with missing/defective/malfunctioning/disabled safety devices. However, Osha’s general duty clause can always be cited should a technician be injured while working on such a unit.

As noted from Osha’s web site in June 2011, denoting the Osha Act of 1970, 29 USC 654, Section 5, Duties: Each employer: (1) shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees; (2) shall comply with occupational safety and health standards promulgated under this Act. (b) Each employee shall comply with occupational safety and health standards and all rules, regulations, and orders issued pursuant to this Act which are applicable to his own actions and conduct.