PowerSports applied for a franchise license to operate a Harley-Davidson motorcycle dealership in Seminole County, Florida. Among other conditions, Harley-Davidson informed PowerSports that it does not allow any of its dealerships to be publicly owned (i.e., to list its stock on a public stock exchange). PowerSports made certain representations about its business practices and procedures and assured Harley-Davidson that it would comply with Harley-Davidson’s strict standards of quality and customer service. Based on these representations, Harley-Davidson awarded a franchise contract to PowerSports. However, just a few days later, Harley-Davidson discovered that PowerSports had taken significant steps to go public, which was inconsistent with Harley-Davidson’s franchise contract. Harley-Davidson sued PowerSports for fraudulent misrepresentation, alleging that the representations made by PowerSports were false and demanding the rescission of the franchise contract, plus additional damages.Page 193 CASE QUESTIONS 1. In your opinion, were PowerSports’s misrepresentations to Harley-Davidson “material”? Explain why or why not.

2. What if PowerSports had gone public three years after it was awarded the Harley-Davidson franchise contract? Could Harley-

Davidson still sue for rescission? How about 10 years later?