Chapter
347
2008 -- H 8150 SUBSTITUTE A
Enacted 07/05/08
A N A C T
RELATING TO
COMMERCIAL LAW GENERAL REGULATORY PROVISIONS -- THE RHODE ISLAND FAIR
DEALERSHIP ACT
Introduced By:
Representative Gordon D. Fox
Date Introduced: April 09,
2008
It is
enacted by the General Assembly as follows:
SECTION
1. Sections 6-50-2, 6-50-3, 6-50-4, 6-50-6, 6-50-7 and 6-50-9 of the General
Laws in
Chapter 6-50 entitled "The Rhode Island Fair Dealership Act" are
hereby amended to
read as
follows:
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 for
the purposes of
this
act, good cause for terminating, canceling or nonrenewal shall include, but not
be limited to,
failure
by the dealer to comply with the reasonable requirements imposed by the grantor
or any of
the
reasons listed in subdivisions 6-50-4(a)(1) through (a)(6).
(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;
(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) Notwithstanding the terms, provisions, or
conditions of any agreement to the contrary,
a
grantor shall provide a dealer at least ninety (90) days' sixty (60)
days prior written notice of
termination,
cancellation, or nonrenewal or substantial change in competitive
circumstances. The
notice shall
state all the reasons for termination, cancellation, or nonrenewal or
substantial change
in
competitive circumstances and shall
provide that the dealer has sixty (60) thirty (30) days in
which to
rectify cure any claimed deficiency; provided that a dealer
has a right to cure three (3)
times
in any twelve (12) month period during the period of the dealership agreement. If the
deficiency
is rectified within sixty (60) days the notice shall be void. The sixty (60) day notice
provisions
of this section shall not apply and the termination, cancellation or
nonrenewal may be
made
effective immediately upon written notice, if the reason for termination, cancellation or
nonrenewal
is insolvency, the occurrence of an assignment for the benefit of creditors
or
bankruptcy. in the event the dealer: (1) voluntarily abandons
the dealership relationship; (2) is
convicted
of a felony offense related to the business conducted pursuant to the
dealership; (3)
engages
in any substantial act which tends to materially impair the goodwill of the
grantor's trade
name,
trademark, service mark, logotype or other commercial symbol; (4) makes a
material
misrepresentation
of fact to the grantor relating to the dealership; (5) attempts to transfer the
dealership
(or a portion thereof) without authorization of the grantor; or (6) is
insolvent, files or
suffers
to be filed against it any voluntary or involuntary bankruptcy petition, or
makes an
assignment
for the benefit of creditors or similar disposition of assets of the dealer
business.
(b)
If the reason for termination, cancellation, or 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
cure
such
default from the date of delivery or posting of such notice. A dealer
has the right to cure
three
(3) times in any twelve (12) month period during the period of the dealership
agreement.
(c)
If the reason for termination, cancellation or nonrenewal is for violation of
any law,
regulation
or standard relating to public health or safety the dealer shall be entitled to
immediate
written
notice and shall have twenty-four (24) hours to cure such violation.
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, or
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, or
nonrenewal or substantial
change
of competitive circumstances.
6-50-9.
Nonapplicability. -- This chapter shall not apply to intoxicating
liquor malt
beverage 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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LC02681/SUB A
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