Section 8-21A-3

Violations by suppliers generally.

It shall be a violation of this chapter for a supplier to do any of the following:

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

(2) To coerce, compel, or require any dealer to enter into any agreement, whether written or oral, as a supplement to an existing dealer agreement with such supplier unless such supplemental agreement is imposed on all other dealers in the state doing business with that same supplier.

(3) To discriminate in the delivery of equipment to any dealer in reasonable quantities and within a reasonable time after receipt of the equipment dealer's order, if the equipment covered by the dealer agreement was specifically represented by the supplier to be available for immediate delivery. However, the failure to deliver the equipment shall not be considered a violation of this chapter if the failure is due to prudent and reasonable restriction on the extension of credit by the supplier to the dealer, an act of God, work stoppage or delay due to a strike or a labor difficulty, a bona fide shortage of materials, freight embargo, or other causes over which the supplier has no control.

(4) To terminate, cancel, or fail to renew a dealer's agreement or substantially alter that dealer's competitive circumstances without good cause.

(5) To condition the renewal or extension of a dealer agreement on the dealer's substantial renovation of the dealer's place of business or on the construction, purchase, acquisition, or rental of a new place of business by the dealer, unless:

a. the dealer is given at least 12 months' notice in advance;

b. the supplier's demand is shown to be reasonable; and

c. the supplier can demonstrate an actual need or necessity for such a change in the place of business in order that the dealer be in a position to adequately serve the public's needs in his or her trade area at that particular time.

(6) To discriminate in the offering of net prices, sale promotion plans, or any and all other devices of programs that affect the ultimate net price paid by the dealer for any item of equipment offered to the dealer by the supplier. "Item of equipment" shall include, but not be limited to, tractors, any equipment or attachments, garden tractors, lawn and garden equipment, or any other items offered by supplier to their dealer. This subdivision shall not apply to the sales to an equipment dealer for resale to any unit or agency of the United States government, the state, or any of its political subdivisions or any municipality located within this state, and provided further that there is no violation of this subdivision so long as a supplier sells or offers to sell its products to all of its dealers at an equal price.

(7) To prevent or attempt to prevent, by contract or otherwise, any dealer from changing the capital structure of his or her dealership or the means or sources through which he or she finances the operation of his or her dealership so long as the dealer continues to meet the reasonable capital requirements which have previously been agreed upon by dealer and supplier and the change does not result in a change of controlling interest, or in the executive management of the dealership.

(8) To prevent or attempt to prevent, by contract or otherwise, any equipment dealer or any officer, member, partner, or stockholder of any dealer from selling or transferring any part of the interest of any one of them to any other person or persons or party or parties. However, no dealer, officer, partner, member, or stockholder shall have the right to sell, transfer, or assign the dealership and/or the dealer agreement without the written consent of the supplier, provided however that consent shall not be unreasonably withheld.

(9) To require the dealer to agree to a release, agreement, waiver, or any other modification that would relieve supplier or dealer from liability imposed by this chapter.

(10)a. To unreasonably withhold consent, in the event of the death of the dealer or the principal owner of the dealership, to the transfer of the dealer's interest in the dealership to a member or members of the family of the dealer or the principal owner of the dealership or to another qualified individual if the family member or other qualified individual meets the reasonable requirements, business experience, and character standards required of all dealers at that time by the supplier. In the event the supplier determines that the designated family member or other qualified individual is not acceptable, the supplier shall provide the dealer or his or her family with written notice of its objections and specific reasons for withholding its consent. Frivolous or capricious reasons will not be acceptable to satisfy the requirements of this section. A supplier shall have 30 days in which to consider and make a determination on a dealer's request to make a transfer to a family member or other qualified individual. As used herein, "family" means a spouse, parents, siblings, children, stepchildren, sons-in-law, daughters-in-law, and lineal descendants including those by adoption of the dealer or principal owner of the dealership.

b. Notwithstanding the foregoing, in the event that a supplier and dealer have previously duly executed an agreement concerning succession rights prior to the dealer's death, and if the agreement has not been revoked, the agreement shall be observed, even if it designates someone other than the surviving spouse or heirs of the decedent as the successor.

(11) To prevent a dealer from having an investment in or holding a dealership contract for the sale of competing product lines or makes of equipment, or to require a dealer to provide separate facilities for competing product lines or makes of equipment.

(12) To impose, directly or indirectly, unreasonable restrictions on the dealer relative to transfer, renewal, termination, location, or site control.

(13) Notwithstanding the provisions of this section, the supplier may determine that a dealer's area of responsibility or trade area does not afford sufficient sales potential to continue to reasonably support a dealer.

(Acts 1991, No. 91-721, p. 1401,§3; Act 2003-356, p. 976, §1.)