(A) A dealer may terminate or cancel its manufacturer/dealer agreement with or without good cause by giving the manufacturer thirty day's written notice. If the termination or cancellation is for good cause, the notice must state all reasons for the proposed termination or cancellation and must further state that if, within thirty days following receipt of the notice, the manufacturer provides to the dealer a written notice of intent to cure all claimed deficiencies, the manufacturer will then have ninety days following receipt of the original notice to rectify the deficiencies. If the deficiencies are rectified within ninety days, the dealer's notice is voided. If the manufacturer fails to provide the notice of intent to cure the deficiencies or fails to cure the deficiencies in the time period prescribed, the termination or cancellation shall take effect as provided in the original notice.

(B) If the dealer terminates, cancels, or fails to renew the manufacturer/dealer agreement without good cause, the terms of Section 56-14-110 do not apply. If the dealer terminates, cancels, or fails to renew the manufacturer/dealer agreement with good cause, Section 56-14-110 shall apply. If the dealer terminates for cause and has new and untitled inventory on hand subject to the termination then the inventory may be sold pursuant to Section 56-14-110.

(C) The dealer has the burden of showing good cause. Any of the following items shall be deemed "good cause" for the proposed termination, cancellation, or nonrenewal action by a dealer:

(1) a manufacturer being convicted of, or entering a plea of nolo contendere to, a felony;

(2) the business operations of the manufacturer have been abandoned or closed for ten consecutive business days, unless the closing is due to an act of God, strike, labor difficulty, or other cause over which the manufacturer has no control;

(3) a significant misrepresentation by the manufacturer materially affecting the business relationship;

(4) a material violation of this chapter which is not cured within thirty days after written notice by the dealer;

(5) a declaration by the manufacturer of bankruptcy, insolvency, or the occurrence of an assignment for the benefit of creditors or bankruptcy.

HISTORY: 2017 Act No. 51 (S.321), Section 1, eff November 19, 2017.

Editor's Note

2017 Act No. 51,Sections 6, 7, provide:

"SECTION 6. The department is authorized to promulgate regulations for the enforcement of the provisions of Chapter 14, Title 56.

"SECTION 7. This act takes effect six months after approval by the Governor and applies to manufacturer/dealer agreements entered into on or after July 1, 2018."