Interpretation ID: nht74-3.40

DATE: 05/09/74

FROM: AUTHOR UNAVAILABLE; Lawrence R. Schneider; NHTSA

TO: Open Road Industries Inc.

TITLE: FMVSR INTERPRETATION

TEXT: This is in reply to your letter of March 21, 1974, regarding Open Road's defect notification letter in NHTSA campaign #73-0043. We indicated to you by letter of March 21, 1974, that notification letters in future campaigns must be modified to conform to @ 577.4(e)(3) of the Defect Notification regulations (49 CFR Part 577) if you continue to make repairs contingent upon the purchaser's agreement to the indemnity and hold-harmless provision found in Open Road's "Authorization for Repair and Alteration" form. You state in your letter that the sole purpose of the indemnity and hold-harmless provision is to protect your company from claims from third parties for unauthorized repairs.

While it is true, as you point out, that the indemnity and hold-harmless provision is not part of the notification letter, that fact is not germane to our conclusion that your letter must conform to @ 577.4(e)(3) if you continue only to make repairs contingent upon the owner's agreement to the provision in question. We are pleased to know that the provision's sole purpose is to protect the company against claims from unknown owners for unauthorized repairs, and we do not object to repairs being contingent upon the owner's agreement to such a provision. But if that is the case we would insist that the provision be more narrowly drafted so that its intent is clear. If that is done Open Road may continue to send notification letters that conform to @ 577.4(e)(1). The responses we have had from owners of Open Road vehicles subject to defect notification and our own review of the provision are persuasive in our view that at present this limited intent is not clear.

Notwithstanding your reference to the meeting Open Road officials had with Robert Carter and Andrew Detrick of NHTSA, at no time was approval given to Open Road's notification letter with knowledge that repair would be made only following the owner's agreement to the indemnity and hold-harmless provision.