§15-245A.3. Good cause.

458 words·~2 min read·/ok/title-15-contracts/15-245a-3

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

A. This section will only apply to single-line dealer agreements.

B. No supplier may terminate a dealer agreement without good cause. For purposes of this section and Section 8 of this act only, “good cause” means failure by a dealer to comply with requirements imposed upon the dealer by the dealer agreement if such requirements are not different from those imposed on other similarly situated dealers. In addition, good cause exists whenever:

1. There has been a closeout or sale of a substantial part of the dealer’s assets related to the equipment business, or there has been a commencement of a dissolution or liquidation of the dealer;

2. The dealer has changed its principal place of business or added additional locations without prior approval of the supplier, which shall not be unreasonably withheld;

3. The dealer has substantially defaulted under a chattel mortgage or other security agreement between the dealer and the supplier, or there has been a revocation or discontinuance of a guarantee of a present or future obligation of the dealer to the supplier;

4. The dealer has failed to operate in the normal course of business for seven

(7)consecutive days or has otherwise abandoned its business;

5. The dealer has pleaded guilty to or has been convicted of a felony affecting the relationship between the dealer and the supplier; or

6. The dealer transfers an interest in the dealership, or a person with a substantial interest in the ownership or control of the dealership, including an individual proprietor, partner or major shareholder, withdraws from the dealership or dies, or a substantial reduction occurs in the interest of a partner or major shareholder in the dealership; provided, however, good cause does not exist if the supplier consents to an action described in this paragraph.

C. Except as otherwise provided in this subsection, a supplier shall provide a dealer with at least ninety

(90)days written notice of termination. The notice must state all reasons constituting good cause for such termination and must state that the dealer has sixty

(60)days in which to cure any claimed deficiency. If the deficiency is rectified within sixty

(60)days, the notice will be void. Notwithstanding the foregoing, if the good cause for termination is due to the dealer’s failure to meet or maintain the supplier’s requirements for market penetration, a reasonable period of time shall have existed where the supplier has worked with the dealer to gain the desired market share. The notice and right to cure provisions under this paragraph shall not apply if the reason for termination is for any reason set forth in paragraphs 1 through 6 of subsection B of this section. Added by Laws 2011, c. 156, § 7, eff. Nov. 1, 2011.