Chapter 370
2013 -- S 0811 SUBSTITUTE A
Enacted 07/15/13
A N A C T
RELATING TO
COMMERCIAL LAW
Introduced By: Senator Roger Picard
Date Introduced: April 04, 2013
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 54
GENERAL REGULATORY PROVISIONS
THE
AND PROTECTION ACT
6-54-1.
Short title. -- This chapter shall be known as
the "
Preservation and Protection
Act."
6-54-2.
Definitions. – As used 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, and
any successor in interest;
(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, for the purposes of this act, good cause for terminating,
diminishing, canceling or nonrenewal shall mean:
(i)
The failure by the dealer to substantially comply with the reasonable
requirements
imposed by the grantor; or
(ii) Any of the
reasons listed in subdivisions 6-54-4(a)(1) through
(a)(6).
(5)
"Grantor" means a person who grants a dealership, and any successor
in interest;
(6)
"Person" means a natural person, partnership, joint venture,
corporation or other
entity.
6-54-3.
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;
(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
(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.
6-54-4.
Notice of termination or change in dealership. -- (a)
Notwithstanding the
terms, provisions, or conditions of any agreement to the
contrary, a grantor shall provide a dealer
sixty (60) days prior written notice of termination,
cancellation, or nonrenewal. The notice shall
state all reasons for termination, cancellation or
nonrenewal and shall provide that the dealer has
thirty (30) days in which to 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. 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 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 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 cure such default from the date
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.
(d) No grantor may
terminate, cancel or fail to renew a dealership, directly or indirectly,
or otherwise take any action to diminish the dealership
or its value, other than for good cause.
6-54-5. 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
market value. This section applies only
to merchandise with a name, trademark, label or other
mark on it which identifies the grantor.
6-54-6.
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, and the relief provided is no less than that
provided for in this chapter.
6-54-7.
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. For purposes
of this chapter, damages shall include, without
limitation, reasonable compensation for the fair
market value of the dealer's business with relation to the
dealership.
6-54-8.
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.
6-54-9.
Nonapplicability. -- This
chapter shall not apply to 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,
door-to-door sales, dealerships, and franchises,
franchisors, franchisees, dealers and dealerships that are
subject to and comply with, or are
exempt from, the provisions of chapter 28 of title 19, known
as the "
Investment Act."
SECTION
2. This act shall take effect upon passage.
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LC02265/SUB A/2
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