35-8A-5. Good cause for termination, cancellation, nonrenewal, discontinuance, or modification.

319 words·~1 min read·/sd/title-35/chapter-35-8/35-8a-5

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

Except as provided in § 35-8A-6 , no supplier may terminate an agreement, cancel an agreement, fail to renew an agreement upon expiration of its terms, refuse to continue under an agreement, or require a material modification of a wholesaler's territory unless good cause exists. Good cause exists for the purpose of termination, cancellation, nonrenewal, discontinuance, or modification if all of the following occur:

(1)There is a failure by the wholesaler to substantially comply, without reasonable excuse or justification, with a provision of the agreement which is both reasonable and of material significance to the business relationship between the wholesaler and the supplier;

(2)The supplier first acquired knowledge of the failure to comply described in subdivision

(1)no more than two years before the date the wholesaler was given final notice under subdivision (5);

(3)The wholesaler has been notified in writing by the supplier of the alleged noncompliance and has been afforded thirty days in which to submit a plan of corrective action to comply with the agreement and an additional ninety days to cure the noncompliance in accordance with the plan;

(4)The wholesaler was afforded a reasonable opportunity to comply with the agreement within the time as provided in subdivision (3). If the wholesaler cures the alleged noncompliance during the time limits provided, the notice of termination is void;

(5)The wholesaler was given final written notice by the supplier of failure to comply with the agreement. The notice shall be delivered by certified mail, return receipt requested, and shall contain a statement of the intention to terminate, cancel, not renew, or discontinue the agreement, a statement of the reasons for the termination, cancellation, nonrenewal, or discontinuance and the date on which the termination shall take effect. The date may not be less than fifteen business days following receipt by the wholesaler of this notice; and

(6)The supplier has acted in good faith.