Commercial Law – General Regulatory Provisions

Equipment Dealerships

SECTION 6-46-3

§ 6-46-3. Notice of termination of dealer agreements.

(a) Notwithstanding any agreement to the contrary, prior to the termination of a dealer agreement, a supplier shall notify the dealer of the termination not less than one hundred twenty (120) days prior to the effective date of the termination. No supplier may terminate, cancel, or fail to renew a dealer agreement without cause. For purposes of this subsection "cause" means failure by an equipment dealer to comply with requirements imposed upon the equipment dealer by the dealer agreement, provided the requirements are not substantially different from those requirements imposed upon other similarly situated dealers in this state.

(b) The supplier may immediately terminate the agreement at any time upon the occurrence of any of the following events:

(1) The filing of a petition for bankruptcy or for receivership either by or against the dealer;

(2) The making by the dealer of an intentional and material misrepresentation as to the dealer's financial status;

(3) Any default by the dealer under a chattel mortgage or other security agreement between the dealer and the supplier;

(4) The commencement of voluntary or involuntary dissolution or liquidation of the dealer if the dealer is a partnership or corporation;

(5) A change in location of the dealer's principal place of business as provided in the agreement without the prior written approval of the supplier;

(6) Withdrawal of an individual proprietor, partner, major shareholder, or the involuntary termination of the manager of the dealership, or a substantial reduction in the interest of a partner or major shareholder without the prior, written consent of the supplier.

(c) Unless there is an agreement to the contrary, a dealer who intends to terminate a dealer agreement with a supplier shall notify the supplier of that intent not less than one hundred twenty (120) days prior to the effective date of the termination.

(d) Notification required by either party under this section shall be in writing and shall be made by certified mail or by personal delivery and shall contain:

(1) A statement of intention to terminate the dealer agreement;

(2) A statement of the reasons for the termination; and

(3) The date on which the termination shall be effective.

History of Section.
(P.L. 1998, ch. 408, § 1; P.L. 2014, ch. 528, § 33.)