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2017 Tennessee Code
Title 55 - Motor and Other Vehicles
Chapter 28 - Tennessee Recreation Vehicle Franchise Act of 2016
§ 55-28-105. Termination or cancellation of manufacturer/dealer agreement by dealer.
Universal Citation: TN Code § 55-28-105 (2017)
- (a) A dealer may terminate or cancel its manufacturer/dealer agreement with a manufacturer or distributor with or without good cause by giving thirty (30) days' written notice.
- (b)
- (1) 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 (30) days following receipt of the original notice, the manufacturer or distributor provides to the dealer a written notice of intent to cure all claimed deficiencies, the manufacturer or distributor will then have ninety (90) days following receipt of the original notice to rectify the deficiencies.
- (2) If the deficiencies are rectified within ninety (90) days, the dealer's notice is voided. If the manufacturer or distributor fails to provide the notice of intent to cure the deficiencies or fails to cure the deficiencies in the prescribed time period, the termination or cancellation will take effect as provided in the original notice.
- (3) If the manufacturer/dealer agreement is terminated, canceled, or not renewed by the dealer for good cause, and the manufacturer fails to provide notice or to cure the claimed deficiencies, the manufacturer shall at the dealer's option and within forty-five (45) days after termination, cancellation, or nonrenewal, repurchase:
- (A) All new, untitled recreational vehicles that were acquired from the manufacturer or distributor within twelve (12) months before the effective date of the notice of termination, cancellation, or nonrenewal that have not been used, except for demonstration purposes, and that have not been altered or damaged, at one hundred percent (100%) of the net invoice cost, including transportation, less applicable rebates and discounts to the dealer;
- (B) All undamaged accessories and proprietary parts sold to the dealer for resale within the twelve (12) months prior to termination, cancellation, or nonrenewal, if accompanied by the original invoice, at one hundred five percent (105%) of the original net price paid to the manufacturer or distributor to compensate the dealer for handling, packing, and shipping the parts; and
- (C) Properly functioning diagnostic equipment, special tools, current signage, and other equipment and machinery at one hundred percent (100%) of dealers' net cost plus freight if the dealer can prove the equipment can no longer be used in the normal course of the dealer's ongoing business.
- (4) In the event any of the vehicles repurchased pursuant to subdivision (b)(3) are damaged, but do not trigger a consumer disclosure requirement, the amount due the dealer shall be reduced by the cost to repair the vehicle. Damage prior to delivery to the dealer that is disclosed at the time of delivery will not disqualify repurchase under this subdivision (b)(4).
- (5) A dealer is not prohibited from selling the remaining in-stock inventory of a particular line-make after the manufacturer/dealer agreement for that line-make has been terminated or not renewed. If recreational vehicles of a line-make are not returned or required to be returned to the manufacturer or distributor, the dealer may continue to sell all line-makes that were subject to the terminated manufacturer/dealer agreement and are currently in stock until those line-makes are no longer in the dealer's inventory.
- (6) 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:
- (A) A manufacturer being convicted of, or entering a plea of guilty or nolo contendere to a felony;
- (B) The business operations of the manufacturer have been abandoned or closed for ten (10) 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;
- (C) A significant misrepresentation by the manufacturer materially affecting the business relationship;
- (D) A material violation of this chapter which is not cured within thirty (30) days after written notice by the dealer; or
- (E) A declaration by the manufacturer of bankruptcy, insolvency, or the occurrence of an assignment for the benefit of creditors or bankruptcy.
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