2013 Kentucky Revised Statutes CHAPTER 365 - TRADE PRACTICES 365.831 Termination or change of contract by supplier -- Good cause requirement -- When not permitted -- Notice.
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365.831 Termination or change of contract by supplier -- Good cause
requirement -- When not permitted -- Notice.
(1)
(2)
(3)
(4)
No supplier, directly or through an officer, agent, or employee, shall terminate
or substantially change the competitive circumstances of a retail agreement
contract without good cause. As used in this subsection, "good cause" means
the failure by a retailer to comply with requirements imposed upon the retailer
by the retail agreement contract if the requirements are not different from those
imposed on other retailers similarly situated in this state. In addition, good
cause exists if:
(a) There has been a closeout or sale of a substantial part of the retailer's
assets related to the equipment business, or there has been a
commencement of a dissolution or liquidation of the retailer;
(b) The retailer has changed its principal place of business or added
additional locations without prior approval of the supplier, which shall not
be unreasonably withheld;
(c) The retailer has substantially defaulted under a chattel mortgage or other
security agreement between the retailer and the supplier, or there has
been a revocation or discontinuance of a guarantee of a present or future
obligation of the retailer to the supplier;
(d) The retailer has failed to operate in the normal course of business for
seven (7) consecutive days or has otherwise abandoned the business;
(e) The retailer has pleaded guilty to or has been convicted of a felony
affecting the relationship between the retailer and supplier; or
(f) The retailer transfers an interest in the dealership; or a person with a
substantial interest in the ownership or control of the dealership, including
an individual proprietor, partner, or major shareholder, withdraws from the
dealership or dies; or a substantial reduction occurs in the interest of an
individual proprietor, partner, or major shareholder in the dealership.
Good cause does not exist if the supplier consents to an action described in
subsection (1) of this section. Such consent exists if the retail agreement
contract does not provide the supplier with a right to terminate or substantially
change the competitive circumstances of the contract as a result of such
action, or the supplier otherwise consents to such action.
No supplier, directly or through an officer, agent, or employee, shall terminate
or substantially change the competitive circumstances of a retail agreement
contract based on high unemployment in the dealership market area, a labor
dispute, the results of a natural disaster, including a sustained drought, or other
circumstances beyond the retailer's control.
Except as provided in paragraphs (a) to (f) of subsection (1) of this section, a
supplier shall provide a retailer with at least ninety (90) days written notice of
termination of a retail agreement contract. The notice shall also contain a sixty
(60) day written notice to cure the deficiency. The notice shall not be required if
the termination is enacted for reasons included in paragraphs (a) to (f) of
subsection (1) of this section. The notice shall state all reasons constituting
good cause for action. In the case where termination is enacted due to market
penetration, a reasonable period of time, not less than one (1) year, shall have
existed where the supplier has worked with the retailer to gain the desired
market share.
Effective:June 25, 2013
History: Amended 2013 Ky. Acts ch. 125, sec. 2, effective June 25, 2013. -Created 2004 Ky. Acts ch. 144, sec. 10, effective April 21, 2004.
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