§ 39-6-60 — Notification of cancellation or nonrenewal; petition to modify notice period; grounds for immediate termination.

(A) Except as provided in subsection (E), a manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division, or officer, agent, or other representative of it shall notify an equipment dealer in writing of the termination or cancellation of the dealership agreement or selling agreement of the dealer at least one hundred eighty days before its effective date, stating the specific grounds for the termination or cancellation. (B) The manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division, or officer, agent, or other representative of it shall notify an equipment dealer in writing at least one hundred eighty days before the contractual term of his dealership agreement or selling agreement expires that the agreement will not be renewed, stating the specific grounds for the nonrenewal in those cases where there is no intention to renew. The contractual term of a dealership agreement or selling agreement may not expire, without the written consent of the equipment dealer involved, before the expiration of at least one hundred eighty days following the written notice. (C) During the one hundred eighty-day period, either party may petition a court to modify the one hundred eighty-day stay or to extend it pending a final determination of the proceedings on the merits. The court may grant preliminary and final injunctive relief pursuant to the Rules of Civil Procedure. (D) Before termination or nonrenewal of the dealership agreement or selling agreement because of the dealer's failure to meet reasonable marketing criteria or market penetration, the manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division, shall provide written notice of the intention at least one year in advance. After the notice, the manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division shall provide fair and reasonable efforts to work with the equipment dealer to gain the desired market share including, without limitation, reasonably making available to the dealer an adequate inventory of new equipment and parts and competitive marketing programs. The manufacturer, distributor, factory branch or division, or wholesale branch or division, at the end of the one-year notice period, may terminate or elect not to renew the agreement only upon written notice specifying the reasons for determining that the dealer failed to meet reasonable criteria or market penetration. This written notice must specify that termination or nonrenewal is effective one hundred eighty days from the date of the notice. Either party may petition the court pursuant to subsection (C). (E) Immediate notice of termination without an opportunity to cure is considered reasonable if, during the agreement term, the equipment dealer: (1) is declared bankrupt or is determined judicially to be insolvent, assigns all or a substantial part of his assets to or for the benefit of a creditor, or admits his inability to pay his debts as they come due; (2) abandons the dealership agreement or sales agreement by failing to operate the business for five consecutive days that the equipment dealer is required to operate the business pursuant to the terms of the dealership agreement or sales agreement, or any shorter period after which it is reasonable under the facts and circumstances for the manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division to conclude that the equipment dealer does not intend to continue to operate pursuant to the dealership agreement or sales agreement, unless the failure to operate is due to fire, flood, earthquake, or other similar causes beyond the equipment dealer's control; (3) agrees in writing with the manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division to terminate the dealership agreement or sales agreement; (4) makes a misrepresentation material to the acquisition of the dealership agreement or sales agreement or engages in conduct that reflects materially and unfavorably upon the reputation of the business of the manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division; (5) fails to comply with a federal, state, or local law or regulation applicable to the operation of his business for a period of ten days after notification of noncompliance; (6) has his business or business premises seized, taken over, or foreclosed by a government official in the exercise of his duties or by a creditor, lienholder, or lessor, and a final judgment against the dealer remains unsatisfied for thirty days absent a filing of a supersedeas or other appeal bond, or a levy of execution is made upon a license granted by the dealership agreement or sales agreement and it is not discharged within five days of the levy; (7) makes a material misrepresentation or falsification of a record; (8) pleads guilty to or is convicted of a felony; (9) transfers a controlling ownership interest in the dealership without the manufacturer's consent, except that the manufacturer may not withhold consent unfairly or unreasonably; (10) relocates or establishes a new or additional dealer location without the supplier's consent; (11) fails to satisfy a payment obligation as it comes due and payable to the manufacturer; or (12) fails to account promptly to the manufacturer for proceeds from the sale of equipment or to hold those proceeds in trust for the manufacturer's benefit.

Legislative History

HISTORY: 2000 Act No. 369, SECTION 1, eff June 14, 2000.