TITLE 28

COMMERCIAL TRANSACTIONS

CHAPTER 24

AGREEMENTS BETWEEN SUPPLIERS AND DEALERS OF FARM EQUIPMENT

PART 1.

AGREEMENTS BETWEEN SUPPLIERS AND DEALERS OF FARM EQUIPMENT

28-24-103.  Dealer agreements — Unlawful acts and practices. It shall be a violation of the provisions of this chapter for a supplier to:

(1)  Require or attempt to require any equipment dealer to order or accept delivery of any equipment or parts or any equipment with special features or accessories not included in the base list price of such equipment as publicly advertised by the supplier which the equipment dealer has not voluntarily ordered;

(2)  Require or attempt to require any equipment dealer to enter into any agreement, whether written or oral, supplementing or amending an existing dealer agreement with such supplier unless such amendment or supplementary agreement is imposed on other similarly situated dealers in the state;

(3)  Refuse to deliver in reasonable quantities and within a reasonable time after receipt of the equipment dealer’s order, to any equipment dealer having a dealer agreement for the retail sale of new equipment sold or distributed by such supplier, equipment covered by such dealer agreement specifically advertised or represented by such supplier to be available for immediate delivery. The failure to deliver any such equipment shall not be considered a violation of the provisions of this chapter when deliveries are based on prior retail sales ordering histories, the priority given to the sequence in which the orders are received or manufacturing schedules or if such failure is due to prudent and reasonable restriction on extension of credit by the supplier to the equipment dealer, an act of God, work stoppage or delay due to a strike or labor difficulty, a bona fide shortage of materials, freight embargo or other cause over which the supplier has no control;

(4)  Terminate, cancel or fail to renew the dealer agreement of any equipment dealer or substantially change the dealer’s competitive circumstances, attempt to terminate or cancel, or threaten not to renew the dealer agreement or attempt or threaten to substantially change the dealer’s competitive circumstances without good cause. For purposes of this chapter, the fact that a dealer agreement allows an event, act or omission does not control whether such event, act or omission resulted in a substantial change in the dealer’s competitive circumstances. Nothing in this subsection shall be interpreted to apply to a discontinuation of or change in the product line of a supplier;

(5)  Condition the renewal, continuation or extension of a dealer agreement on the equipment dealer’s substantial renovation of the equipment dealer’s place of business or on the construction, purchase, acquisition or rental of a new place of business by the equipment dealer, unless:

(a)  The supplier has advised the equipment dealer in writing of its demand for such renovation, construction, purchase, acquisition or rental within a reasonable time prior to the effective date of the proposed date of renewal or extension, but in no case less than one (1) year; and

(b)  The supplier demonstrates the need for such change in the place of business and the reasonableness of the demand with respect to marketing and servicing the supplier’s products and any significant economic conditions existing at the time in the equipment dealer’s trade area, and the equipment dealer does not make a good faith effort to complete such construction or renovation plans within one (1) year;

(6)  Discriminate in the prices charged for equipment of like grade and quality sold by the supplier to similarly situated dealers in this state where the effect of such discrimination may be to substantially lessen competition or tend to create a monopoly in a line of commerce. The provisions of this subsection do not prevent the use of differentials which make only due allowance for differences in the cost of manufacture, sale or delivery of equipment resulting from the differing methods or quantities in which such equipment is sold or delivered; provided that nothing shall prevent a supplier from offering a lower price in order to meet an equally low price of a competitor, or the services or facilities furnished by a competitor;

(7)  Unreasonably withhold consent for an equipment dealer to change the capital structure of the equipment dealership or the means by which it is financed, provided that the equipment dealer meets the reasonable capital requirements of the supplier;

(8)  Prevent, by contract or otherwise, any equipment dealer or any officer, member, partner or stockholder of an equipment dealership from selling, assigning, or transferring any interest or portion thereof held by any of them in the equipment dealership to any other person or party; provided, however, that no equipment dealer, officer, partner, member or stockholder shall have the right to sell, transfer, or assign the equipment dealership or the power of management or control thereof without the written consent of the supplier, except that such consent shall not be unreasonably withheld if the buyer, transferee, or assignee meets the reasonable financial, business experience and character standards of the supplier. Should a supplier determine that the designated transferee is not acceptable, the supplier shall provide the equipment dealer with written notice of the supplier’s objections and specific reasons for withholding its consent within thirty (30) calendar days of receipt of notice from the equipment dealer;

(9)  Require an equipment dealer to assent to a release, assignment, novation, waiver or estoppel which would relieve any person from liability imposed by this chapter;

(10) (a) Unreasonably withhold consent, in the event of the death of the equipment dealer or the principal owner of the equipment dealership, to the transfer of the equipment dealer’s or the principal owner’s interest in the equipment dealership to another individual, if the individual meets the reasonable financial, business experience and character standards of the supplier. A supplier shall have sixty (60) days to consider a request to make a transfer to an individual. If, within that period, the supplier determines that the individual does not meet the reasonable financial, business experience and character standards of the supplier, it shall provide the dealership, heirs to the dealership, or the estate of the dealer with written notice of its objection and the specific reasons for withholding its consent. If the individual reasonably satisfies the supplier’s objections within sixty (60) days after notice thereof, the supplier shall approve the transfer. Nothing in this paragraph shall entitle a qualified individual to continue to operate the dealership without the consent of the supplier;

(b)  Notwithstanding the provisions of paragraph (a) of this subsection, in the event that a supplier and equipment dealer have duly executed an agreement concerning succession rights prior to the equipment dealer’s death, and if such agreement has not been revoked, such agreement shall be observed;

(11) Cause the equipment dealer to refrain from participation in the management, investment, acquisition or sale of any other related product or product line of equipment, parts or accessories, from the same or separate locations;

(12) Fail to compensate a dealer for preparation and delivery of equipment that the supplier sells or leases for use within this state and that the dealer prepares for delivery and delivers.

History:

[28-24-103, added 1990, ch. 267, sec. 1, p. 751; am. 2005, ch. 238, sec. 7, p. 735; am. 2018, ch. 224, sec. 1, p. 504.]