Chapter 373
2008 -- S 2592
SUBSTITUTE A AS AMENDED
Enacted 07/08/08
A N A C T
RELATING
TO COMMERCIAL LAW GENERAL REGULATORY PROVISIONS -- THE
RHODE
ISLAND FAIR DEALERSHIP ACT
Introduced
By: Senator Daniel P. Connors
Date
Introduced: February 26, 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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LC02268/3
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