# ORS § 650.020: 650.020 Liability of franchise seller > Oregon · Statutes · In force URL: https://www.frixlaw.com/law-library/statutes/STATE_OR_T50_C650_S650.020 ## Section - **Citation:** ORS § 650.020 - **Heading:** 650.020 Liability of franchise seller - **Jurisdiction:** Oregon - **Kind:** Statutes - **Status:** In force - **Text as of:** August 14, 2026 - **Source:** Compiled text - **Location:** OR Code / Title 50 / Chapter 650 / Section 650.020 ## Text (1) Any person who sells a franchise is liable as provided in subsection (3) of this section to the franchisee if the seller: (a) Employs any device, scheme or artifice to defraud; or (b) Makes any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading. (2) It shall be an affirmative defense to any action for legal or equitable remedies brought under subsection (1) of this section if the franchisee knew of the untruth or omission. (3) The franchisee may recover any amounts to which the franchisee would be entitled upon an action for a rescission. Except as provided in subsection (4) of this section, the court may award reasonable attorney fees to the prevailing party in an action under this section. (4) The court may not award attorney fees to a prevailing defendant under the provisions of subsection (3) of this section if the action under this section is maintained as a class action pursuant to ORCP 32. (5) Every person who directly or indirectly controls a franchisor liable under subsection (1) of this section, every partner, officer or director of the franchisor, every person occupying a similar status or performing similar functions, and every person who participates or materially aids in the sale of a franchise is also liable jointly and severally to the same extent as the franchisor, unless the nonseller did not know, and, in the exercise of reasonable care, could not have known, of the existence of the facts on which the liability is based. (6) An action may not be commenced under this section more than three years after the sale. (7) A corporation which is liable under ORS 650.005 (Definitions for ORS 650.005 to 650.100) to 650.100 (Disposition of civil penalties) shall have a right of indemnification against any of its principal executive officers, directors and controlling persons whose willful violation of any provision of ORS 650.005 (Definitions for ORS 650.005 to 650.100) to 650.100 (Disposition of civil penalties) gave rise to the liability. All persons liable under ORS 650.005 (Definitions for ORS 650.005 to 650.100) to 650.100 (Disposition of civil penalties) shall have a right of contribution against all other persons similarly liable, based upon each person’s proportionate share of the total liability, except: (a) A person willfully misrepresenting or failing to disclose shall not have any right of contribution against any other person guilty merely of a negligent violation; and (b) A principal executive officer, director, or controlling person shall not have any right of contribution against the corporation to which the person sustains that relationship. [1973 c.509 §4; 1979 c.284 §185; 1995 c.696 §40] Source: Section 650.020 — Liability of franchise seller; defenses; amount of recovery; attorney fees; joint and several liability; limitation on action; indemnification of corporation; right of contribution , https://www.­oregonlegislature.­gov/bills_laws/ors/ors650.­html (accessed May 26, 2025). ## Nearby sections - [ORS § 650.005 650.005 Definitions for ORS 650.005 to 650.100](https://www.frixlaw.com/law-library/statutes/STATE_OR_T50_C650_S650.005.md) - [ORS § 650.010 650.010 Franchise sellers required to maintain books and records](https://www.frixlaw.com/law-library/statutes/STATE_OR_T50_C650_S650.010.md) - [ORS § 650.015 650.015 When franchise sale or offer for sale is made in this state](https://www.frixlaw.com/law-library/statutes/STATE_OR_T50_C650_S650.015.md) - [ORS § 650.020 650.020 Liability of franchise seller](https://www.frixlaw.com/law-library/statutes/STATE_OR_T50_C650_S650.020.md) - [ORS § 650.050 650.050 Rules](https://www.frixlaw.com/law-library/statutes/STATE_OR_T50_C650_S650.050.md) - [ORS § 650.055 650.055 General duties and powers of director](https://www.frixlaw.com/law-library/statutes/STATE_OR_T50_C650_S650.055.md) - [ORS § 650.057 650.057 Orders issued under ORS 650.055](https://www.frixlaw.com/law-library/statutes/STATE_OR_T50_C650_S650.057.md) - [ORS § 650.060 650.060 Investigative powers of director](https://www.frixlaw.com/law-library/statutes/STATE_OR_T50_C650_S650.060.md) - [ORS § 650.065 650.065 Injunctive relief](https://www.frixlaw.com/law-library/statutes/STATE_OR_T50_C650_S650.065.md) - [ORS § 650.070 650.070 Director as agent for service of process](https://www.frixlaw.com/law-library/statutes/STATE_OR_T50_C650_S650.070.md) - [ORS § 650.075 650.075 Manner of executing service of process](https://www.frixlaw.com/law-library/statutes/STATE_OR_T50_C650_S650.075.md) - [ORS § 650.080 650.080 When personal service of process required](https://www.frixlaw.com/law-library/statutes/STATE_OR_T50_C650_S650.080.md) - [ORS § 650.085 650.085 Other civil or criminal remedies unaffected](https://www.frixlaw.com/law-library/statutes/STATE_OR_T50_C650_S650.085.md) - [ORS § 650.095 650.095 Civil penalties](https://www.frixlaw.com/law-library/statutes/STATE_OR_T50_C650_S650.095.md) --- Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/STATE_OR_T50_C650_S650.020. Check the current official text before relying on it. Not legal advice.