44-6702. Prohibited acts of supplier
A. It is a violation of this chapter for a supplier to do any of the following:
1. Coerce or compel an equipment dealer to enter into a written or oral agreement
that is supplementary to an existing dealer agreement with the supplier unless that
agreement is imposed on all other similarly situated dealers in this state.
2. Refuse to deliver, within a reasonable time after receipt of an order, equipment
covered by the dealer agreement specifically represented by the supplier to be available
for immediate delivery if this equipment is available in reasonable quantities unless
this failure is due to any of the following:
(a) Restrictions on the extension of credit by the supplier to the equipment
dealer.
(b) A breach of or a default under the agreement by the equipment dealer.
(c) An act of God.
(d) Work stoppage or delay due to a strike or labor difficulty.
(e) A bona fide shortage of materials.
(f) Other causes over which the supplier has no control.
3. Terminate, cancel or fail to renew a dealer agreement or to substantially change
the competitive circumstances of the dealer agreement without cause.
4. Require as a condition of renewal or extension of a dealership agreement that
the dealer complete substantial renovation of the dealer's place of business or to
acquire new or additional space to serve as the dealer's place of business unless the
supplier provides at least one year's written notice of the conditions that states all of
the grounds supporting this condition. The supplier shall provide the dealer with a
reasonable time to complete the renovation or acquisition after this period expires.
5. Discriminate in the prices charged for equipment of like grade and quality sold
by the supplier to similarly situated dealers in this state. This paragraph does not:
(a) Prevent the use of differentials that result from the differing quantities in
which equipment is sold or delivered and does not prevent a supplier from offering a
lower price in order to meet a competitor's equally low price or the services or
facilities furnished by a competitor.
(b) Apply to sales to an equipment dealer for resale to a unit or agency of the
United States government, this state or its political subdivisions, a major fleet account
or an organization for testing or demonstration purposes.
6. Prevent by any means an equipment dealer from changing the capital structure of
the equipment dealership or the means by which the dealership is financed if the dealer
at all times meets reasonable capital standards imposed by the supplier or as otherwise
agreed to between the dealer and the supplier and this change does not cause a change of
the controlling interest in the executive management or the board of directors or of a
guarantor of the dealership.
7. Prevent by any means an equipment dealer or any officer, member, partner or
stockholder of a dealer from selling or transferring any part of the interest of any of
them to any other person. No dealer, officer, partner, member or stockholder may sell,
transfer or assign the equipment dealership or power of management or control of the
dealership without the written consent of the supplier. If a supplier determines that
the designated transferee is not acceptable, the supplier shall provide the dealer with
written notice of the supplier's objection and the specific reasons for withholding its
consent.
8. Require an equipment dealer to assent to a release, assignment, novation, waiver
or estoppel that would relieve a person from complying with this section.
9. If an equipment dealer or the principal owner of the dealership dies,
unreasonably withhold consent to the transfer of the dealer's interest in the dealership
to a member of the dealer's or the principal owner's family if that family member meets
the reasonable financial, business ability, experience and character standards of the
supplier. If the supplier determines that a family member does not meet these standards,
the supplier shall provide the dealer's representative with written notice of the
supplier's specific objections. A supplier has ninety days to consider a request to make
a transfer. For the purposes of this paragraph, "family member" means a spouse, parent,
sibling, child, stepchild, son-in-law or daughter-in-law and lineal descendants and
includes adopted children and their lineal descendants.
B. Notwithstanding subsection A, paragraph 9, if a supplier and dealer have
executed an agreement concerning succession rights before the dealer's death and that
agreement has not been revoked or otherwise terminated by either party, that agreement
controls the terms of succession.
C. Notwithstanding subsection A, paragraph 7 or 9, a supplier may withhold consent
to a transfer of interest in a dealership if the dealer's area of responsibility or trade
area does not afford sufficient sales potential to reasonably support the dealer. The
supplier has the burden of demonstrating this fact.
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