Chapter
028
2007 -- S 0540 SUBSTITUTE A
Enacted 06/14/07
A N A C T
RELATING TO
COMMERCIAL LAW -- GENERAL REGULATORY PROVISIONS -- THE RHODE ISLAND FAIR
DEALERSHIP ACT
Introduced By: Senators Maselli, Tassoni, Issa, Doyle, and Moura
Date Introduced: February
15, 2007
It is
enacted by the General Assembly as follows:
SECTION
1. Title 6 of the General Laws entitled "COMMERCIAL LAW – GENERAL
REGULATORY
PROVISIONS" is hereby amended by adding thereto the following chapter:
CHAPTER 50
THE RHODE ISLAND FAIR DEALERSHIP ACT
6-50-1.
Short title. – This chapter shall be known as the "Rhode Island
Fair Dealership
Act."
6-50-2.
Definitions. – In this chapter:
(1)
"Community of interest" means a continuing financial interest between
the grantor
and
the grantee in either the operation of the dealership business or the marketing
of such goods
or
services.
(2)
"Dealer" means a person who is a grantee of a dealership situated in
this state.
(3)
"Dealership" means any of the following:
(i)
A contract or agreement, either expressed or implied, whether oral or written,
between
two
(2) or more persons, by which a person is granted the right to sell or
distribute goods or
services,
or use a trade name, trademark, service mark, logotype, advertising or other
commercial
symbol,
in which there is a community of interest in the business of offering, selling
or
distributing
goods or services at wholesale, retail, by lease, agreement or otherwise.
(4)
"Good cause" means:
(i)
Failure by a dealer to comply substantially with essential and reasonable
requirements
imposed
upon the dealer by the grantor, or sought to be imposed by the grantor, which
requirements
are not discriminatory as compared with requirements imposed on other similarly
situated
dealers either by their terms or in the manner of their enforcement; or
(ii)
Bad faith by the dealer in carrying out the terms of the dealership.
(5)
"Grantor" means a person who grants a dealership.
(6)
"Person" means a natural person, partnership, joint venture,
corporation or other
entity.
6-50-3.
Purposes; rules of construction; variation by contract. – (a) This
chapter shall
be
liberally construed and applied to promote its underlying remedial purposes and
policies.
(b)
The underlying purposes and policies of this chapter are:
(1)
To promote the compelling interest of the public in fair business relations
between
dealers
and grantors, and in the continuation of dealerships on a fair basis;
(2)
To protect dealers against unfair treatment by grantors, who inherently have
superior
economic
power and superior bargaining power in the negotiation of dealerships;
(3)
To provide dealers with rights and remedies in addition to those existing by
contract
or
common law; and
(4)
To govern dealerships, including any renewals or amendments, to the full extent
consistent
with the constitutions of this state and the United States.
(c)
The effect of this chapter may not be varied by contract or agreement. Any
contract or
agreement
purporting to do so is void and unenforceable to that extent only.
6-50-4.
Notice of termination or change in dealership. – Except as provided
in this
section,
a grantor shall provide a dealer at least ninety (90) days' prior written
notice of
termination,
cancellation, nonrenewal or substantial change in competitive circumstances.
The
notice
shall state all the reasons for termination, cancellation, nonrenewal or
substantial change in
competitive
circumstances and shall provide that the dealer has sixty (60) days in which to
rectify
any
claimed deficiency. If the deficiency is rectified within sixty (60) days the
notice shall be
void.
The notice provisions of this section shall not apply if the reason for
termination,
cancellation
or nonrenewal is insolvency, the occurrence of an assignment for the benefit of
creditors
or bankruptcy. If the reason for termination, cancellation, nonrenewal or substantial
change
in competitive circumstances is nonpayment of sums due under the dealership,
the dealers
shall
be entitled to written notice of such default, and shall have ten (10) days in
which to remedy
such
default from the date of delivery or posting of such notice.
6-50-5.
Repurchase of inventories. – If a dealership is terminated by the
grantor, the
grantor,
at the option of the dealer, shall repurchase all inventories sold by the
grantor to the
dealer
for resale under the dealership agreement at the fair wholesale market value.
This section
applies
only to merchandise with a name, trademark, label or other mark on it which
identifies the
grantor.
6-50-6.
Application to arbitration agreements. -- This chapter shall not
apply to
provisions
for the binding arbitration of disputes contained in a dealership agreement, if
the
criteria
for determining whether good cause existed for a termination, cancellation,
nonrenewal or
substantial
change of competitive circumstances, and the relief provided is no less than
that
provided
for in this chapter.
6-50-7.
Action for damages and injunctive relief. – If any grantor violates
this chapter,
a
dealer may bring an action against such grantor in any court of competent
jurisdiction for
damages
sustained by the dealer as a consequence of the grantor's violation, together
with the
actual
costs of the action, including reasonable actual attorneys' fees, and the
dealer also may be
granted
injunctive relief against unlawful termination, cancellation, nonrenewal or
substantial
change
of competitive circumstances.
6-50-8.
Temporary injunctions. – In any action brought by a dealer against a
grantor
under
this chapter, any violation of this chapter by the grantor is deemed an
irreparable injury to
the
dealer in determining if temporary injunctions should issue.
6-50-9.
Nonapplicability. – This chapter shall not apply to intoxicating
liquor
dealerships,
motor vehicle dealerships, insurance agency relationships, any relationship relating
to
the sale or administration of insurance or any similar contract with an entity
organized under
chapters
19 or 20 of title 27, fuel distribution dealerships, and door to door sales
dealerships.
SECTION
2. This act shall take effect upon passage.
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LC02096/SUB A
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