2013 -- H 5520

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LC01331

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO COMMERCIAL LAW -- GENERAL REGULATORY PROVISIONS -- THE

RHODE ISLAND FAIR DEALERSHIP ACT

     Introduced By: Representative Brian P. Kennedy

     Date Introduced: February 14, 2013

     Referred To: House Corporations

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 6-50-2, 6-50-4 and 6-50-7 of the General Laws in Chapter 6-50

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entitled "The Rhode Island Fair Dealership Act" are hereby amended to read as follows:

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     6-50-2. Definitions. -- In this chapter:

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      (1) "Community of interest" means a continuing financial interest between the grantor

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and the grantee in either the operation of the dealership business or the marketing of such goods

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or services;

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      (2) "Dealer" means a person who is a grantee of a dealership situated in this state, and

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any successor in interest;

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      (3) "Dealership" means any of the following:

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      (i) A contract or agreement, either expressed or implied, whether oral or written,

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between two (2) or more persons, by which a person is granted the right to sell or distribute goods

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or services, or use a trade name, trademark, service mark, logotype, advertising or other

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commercial symbol, in which there is a community of interest in the business of offering, selling

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or distributing goods or services at wholesale, retail, by lease, agreement or otherwise.

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      (4) "Good cause" means for the purposes of this act, good cause for terminating,

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canceling or nonrenewal shall include, but not be limited to, mean:

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     (i) The failure by the dealer to substantially comply with the reasonable requirements

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imposed by the grantor; or

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     (ii) Any any of the reasons listed in subdivisions 6-50-4(a)(1) -- (a)(6).

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      (5) "Grantor" means a person who grants a dealership, and any successor in interest;

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      (6) "Person" means a natural person, partnership, joint venture, corporation or other

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entity.

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     6-50-4. Notice of termination or change in dealership Good cause--Notice of

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termination or change in dealership. -- (a) Notwithstanding the terms, provisions, or conditions

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of any agreement to the contrary, a grantor shall provide a dealer sixty (60) days prior written

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notice of termination, cancellation, or nonrenewal. The notice shall state all the reasons for

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termination, cancellation, or nonrenewal and shall provide that the dealer has thirty (30) days in

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which to cure any claimed deficiency; provided that a dealer has a right to cure three (3) times in

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any twelve (12) month period during the period of the dealership agreement. The sixty (60) day

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notice provisions of this section shall not apply and the termination, cancellation or nonrenewal

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may be made effective immediately upon written notice, if the reason for termination,

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cancellation or nonrenewal is in the event the dealer: (1) voluntarily abandons the dealership

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relationship; (2) is convicted of a felony offense related to the business conducted pursuant to the

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dealership; (3) engages in any substantial act which tends to materially impair the goodwill of the

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grantor's trade name, trademark, service mark, logotype or other commercial symbol; (4) makes a

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material misrepresentation of fact to the grantor relating to the dealership; (5) attempts to transfer

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the dealership (or a portion thereof) without authorization of the grantor; or (6) is insolvent, files

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or suffers to be filed against it any voluntary or involuntary bankruptcy petition, or makes an

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assignment for the benefit of creditors or similar disposition of assets of the dealer business.

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      (b) If the reason for termination, cancellation, or nonrenewal is nonpayment of sums due

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under the dealership, the dealers shall be entitled to written notice of such default, and shall have

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ten (10) days in which to cure such default from the date of such notice. A dealer has the right to

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cure three (3) times in any twelve (12) month period during the period of the dealership

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agreement.

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      (c) If the reason for termination, cancellation or nonrenewal is for violation of any law,

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regulation or standard relating to public health or safety, the dealer shall be entitled to immediate

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written notice and shall have twenty-four (24) hours to cure such violation.

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     (d) No grantor may terminate, cancel, or fail to renew a dealership, directly or indirectly,

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other than for good cause.

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     6-50-7. Action for damages and injunctive relief. -- If any grantor violates this chapter,

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a dealer may bring an action against such grantor in any court of competent jurisdiction for

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damages sustained by the dealer as a consequence of the grantor's violation, together with the

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actual costs of the action, including reasonable actual attorneys' fees, and the dealer also may be

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granted injunctive relief against unlawful termination, cancellation, or nonrenewal. For purposes

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of this chapter, damages shall include, without limitation, reasonable compensation for the fair

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market value of the dealer's business with relation to the dealership.

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     SECTION 2. This act shall take effect upon passage.

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LC01331

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO COMMERCIAL LAW -- GENERAL REGULATORY PROVISIONS -- THE

RHODE ISLAND FAIR DEALERSHIP ACT

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     This act would require "good cause" before a dealership can be terminated, cancelled or

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non-renewed.

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     This act would take effect upon passage.

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LC01331

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