(A) It is a violation of Section 39-6-40 for a manufacturer, factory branch, factory representative, distributor, or wholesaler, distributor branch, or distributor representative to engage in an action that is arbitrary, unconscionable, or in bad faith and that causes damage to any of the parties, the equipment dealer, or to the public.

(B) It is a violation of Section 39-6-40 for a manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division, or officer, agent, or other representative of it, to coerce or attempt to coerce an equipment dealer to order or accept delivery of:

(1) equipment or parts or accessories or other commodity that the equipment dealer has not voluntarily ordered, except as required by applicable law or unless required by a supplier as safety parts or safety accessories;

(2) equipment with special features or accessories not included in the list price of the equipment as publicly advertised by the manufacturer of the equipment; or

(3) any parts, accessories, equipment, machinery, tools, or other commodity for a person.

(C) It is a violation of Section 39-6-40 for a manufacturer, a distributor, a wholesaler, a distributor branch or division, a factory branch or division, or a wholesale branch or division, or officer, agent, or other representative of it to:

(1) discriminate, directly or indirectly, in filling an order for the purchase or lease of new equipment placed by a dealer of its product line or model:

(a) as between dealers of the same product line or model; or

(b) as between dealers and persons that purchase or lease new equipment directly from the manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division;

(2) coerce or attempt to coerce an equipment dealer to enter into an agreement with the manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division, or officer, agent or other representative of it, or to do any other act prejudicial to the dealer by threatening to cancel a dealership agreement or contractual agreement existing between the manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division, and the dealer, except that notice in good faith to an equipment dealer of the dealer's violation of terms or provisions of the dealership agreement or contractual agreement is not a violation of Section 39-6-40;

(3) terminate or cancel the dealership agreement or selling agreement of dealer without due cause. "Due cause" means failure by the dealer to comply with reasonable requirements imposed on the dealer by a dealer agreement if the requirements do not differ materially from those imposed on other similarly situated dealers in this State. "Due cause" also means that the dealer consistently fails to:

(a) provide service and replacement parts or perform warranty obligations, or the dealer otherwise engages in business practices that are detrimental to the consumer or the manufacturer including excessive pricing or misleading advertising;

(b) provide adequate sales, service, or parts personnel commensurate with the dealer agreement;

(c) meet reasonable building and housekeeping requirements;

(d) comply with the applicable licensing laws pertaining to products and services the dealer represents as being on behalf of the manufacturer;

(e) meet the manufacturer's market penetration requirements based on available record information after receiving notice from the manufacturer of the requirements as provided in Section 39-6-60(D).

(4) sell or offer to sell new equipment to an equipment dealer at a lower actual price than the actual price offered to another equipment dealer for the same new equipment, except that this provision does not apply to sales by a manufacturer, distributor, or wholesaler to the United States Government or an agency of it or prohibit a manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesaler branch or division from granting an equipment dealer a bonus based upon the volume of the dealer's sales, provided that the volume bonus is offered the other dealers of the same product line or make of new equipment having the same sales volumes;

(5) sell or offer to sell parts or accessories to a new equipment dealer for use in his own business, for the purpose of repairing or replacing them on a comparable part or accessory, at a lower actual price than the actual price charged to another new equipment dealer for similar parts or accessories for use in his own business;

(6) prevent or attempt to prevent by contract or otherwise an equipment dealer from changing the capital structure of his dealership or the means by or through which he finances the operation of his dealership, provided that the dealer at all times meets reasonable capital standards agreed to between the dealer and the manufacturer, distributor, or wholesaler, and provided that the change by the dealer does not result in a change in the executive management of the dealership;

(7) prevent or attempt to prevent by contract or otherwise an equipment dealer or any officer, partner, or stockholder of an equipment dealer from selling or transferring any part of his interest to another person; except that a dealer, officer, partner, or stockholder may not sell, transfer, or assign the dealership agreement or power of management or control under it without the consent of the manufacturer, distributor, or wholesaler, but that consent may not be withheld unfairly or unreasonably;

(8) obtain money, goods, services, anything of value, or another benefit from a person with whom the equipment dealer does business, on account of or in relation to the transactions between the dealer and that other person, unless the benefit is accounted for and transmitted promptly to the equipment dealer;

(9) require an equipment dealer to assent to a release, assignment, novation, waiver, or estoppel that would relieve a person from liability imposed by Section 39-6-40.

HISTORY: 2000 Act No. 369, Section 1, eff June 14, 2000.