Kansas Farm Equipment Buy-Back Statutes

(Requires repurchase of farm machinery at 100% of net cost and repair parts at 95% (plus 5%).)

K.S.A. § § 16-1001, 16-1002, 16-1003, 16-1004, 16-1005, 16-1006, 16-1007, Amended 1991

Article 10.— CONTRACTS TO MAINTAIN STOCK OF FARM EQUIPMENT

16-1001. Definitions. As used in this act:
(a) "Current model" means a model listed in the wholesaler’s, manufacturer’s or distributor’s current sales manuals or any supplements thereto.

(b) "Current net price" means the price listed in the wholesaler’s, manufacturer’s or distributor’s price list or catalog in effect at the time the contract is canceled or discontinued, less any applicable trade and cash discounts.

(c ) "Net cost" means the price the retailer actually paid for the merchandise to the wholesaler, manufacturer or distributor, plus freight from the wholesaler’s , manufacturer’s, or distributor’s location to the retailer’s location at carload (30,000 pounds) rate.

History: L. 1976, ch. 95, § 1; July 1.

16-1002. Contracts, sales agreements or security agreements to maintain stock of farm equipment or repair parts by retailer; cancellation or discontinuance thereof; repurchase obligations of wholesaler, manufacturer, distributor or transferee of such wholesaler, manufacturer or distributor thereon; contracts affected; security interests not affected; repurchase not subject to bulk sales law or the claims of secured or unsecured creditors of specified others.

(a) Whenever any person, firm or corporation engaged in the business of selling and retailing farm implements, machinery, attachments or repair parts therefor enters into a written or parol contract, sales agreement or security agreement evidenced by a franchise agreement whereby such retailer agrees to maintain a stock of parts or complete or whole implements, machines or attachments with any wholesaler, manufacturer or distributor of such implements, machinery, attachments or repair parts, and either such wholesaler, manufacturer or distributor or the retailer desires to cancel or discontinue the contract, such wholesaler, manufacturer or distributor shall pay to such retailer or credit to such retailer's account, if the retailer has outstanding any sums owing the wholesaler, manufacturer or distributor, unless the retailer should desire to keep such merchandise, a sum equal to 100% of the net cost of all new, unused, undamaged, complete farm implements, machinery and attachments and 95% of the current net prices on new, unused, undamaged repair parts, including superseded parts, which implements, machinery, attachments and parts had previously been purchased from such wholesaler, manufacturer, distributor or transferee of such wholesaler, manufacturer or distributor if the transferee acquired substantially all of the assets of such wholesaler, manufacturer or distributor, and held by such retailer on the date of the cancellation or discontinuance of such contract. The wholesaler, manufacturer or distributor shall also pay such retailer a sum equal to 5% of the current net price of all parts returned for the handling, packing and loading of such parts for return to the wholesaler, manufacturer or distributor, except that such 5% shall not be paid or credited to the retailer if the wholesaler, manufacturer or distributor elects to perform the handling, packing, loading and transportation of the parts itself.  Upon the payment or allowance of credit to the retailer's account of the sum required by this section, the title to such farm implements, machinery, attachments and repair parts therefor shall pass to the manufacturer, wholesaler or distributor making such payment, and such manufacturer, wholesaler or distributor shall be entitled to the possession of such farm implements, machinery, attachments or repair parts. All payments or allowances of credit due retailers shall be paid or credited within 60 days after the return of implements, machinery, attachments or repair parts.  After 60 days, all payments or allowances shall include interest at the rate prescribed by K.S.A. 16-204, and amendments thereto.

 (b) The provisions of this section relating to a retailer's right to cancel or discontinue a contract and receive payment for implements, machines, attachments and parts returned shall apply to all contracts now in effect which have no expiration date and are a continuing contract, and all other contracts entered into or renewed after July 1, 1976. The provisions for a retailer to receive payment for implements, machines, attachments and parts returned shall apply only to implements, machines, attachments and parts purchased after the effective date of this act. Any contract in force and effect on July 1, 1976, which by its own terms will terminate on a date subsequent thereto shall be governed by the law as it existed prior to this act.

 (c) The provisions of this section shall not be construed to affect in any way any security interest which the wholesaler, manufacturer or distributor may have in the inventory of the retailer, except that any repurchase hereunder shall not be subject to the provisions of the bulk sales law or to the claims of any secured or unsecured creditors of the wholesaler, manufacturer or distributor or any assignee of the wholesaler, manufacturer or distributor until such time the retailer has received payment in full subject to any offset the retailer may owe to the wholesaler, manufacturer or distributor.

16-1003. Contracts, sales agreements or security agreements to maintain stock of farm equipment or repair parts by retailer; repurchase not required, when.

(a)   The provisions of this act shall not require the repurchase from a retailer of:

(1)  Repair part which is in a broken or damaged package;

(2)  single repair part which is priced as a set of two or more items;

(3) any repair part which because of its condition is not resalable as a new part without repackaging or reconditioning;

(4) any farm implements, machinery, attachments, or repair parts for which the retailer is unable to furnish evidence, satisfactory to the wholesaler, manufacturer or distributor of clear title, free and clear of all claims, liens and encumbrances;

(5) any farm implements, machinery, attachments or repair parts which the retailer desires to keep, provided the retailer has a contractual right to do so;

(6) any farm implements, machinery and attachments which are not current models or which are not in new, unused, undamaged, complete condition;

(7) any repair parts which are not in new, unused, undamaged condition;

(8) any farm implements, machinery or attachments which were purchased prior to the beginning of the twenty-four (24) month period immediately preceding the date of notification of termination;

(9) any farm implement, machinery, attachments or repair parts which were ordered by retailer on or after the date of notification of termination; or

(10) any farm implements, machinery, attachments or repair parts which were acquired by the retailer from any source other than the wholesaler, manufacturer, distributor or transferee of such wholesaler, manufacturer or distributor.

      b. Any repair part which is not excluded from the repurchase obligations established under K.S.A. 16-1002 and 16-1005, and amendments thereto, by this section, as amended by this act, and the repurchase of which is in dispute on the effective date of this act shall be subject to the repurchase obligations established under K.S.A. 16-1002 and 16-1005, and amendments thereto.

Sec. 2. K.S.A. 16-1004 is hereby amended to read as follows: 16-1004. In the event that any manufacturer, wholesaler or distributor of farm implements, machinery, attachments or repair parts therefor, upon cancellation of a contract by either a retailer or a manufacturer, wholesaler or distributor, fails or refuses to make payment or allow credit to such retailer as required by K.S.A. 16-1002, and amendments thereto, such manufacturer, wholesaler or distributor shall be liable in a civil action to be brought by such retailer for the actual costs of the action, including attorney, paralegal and expert witness fees; for 100% of the net cost of such farm implements, machinery and attachments and 100% of the current net price of repair parts, plus 5% for handling, packing and loading plus freight charges which have been paid by the retailer.

16-1005. Same; death of retailer or majority stockholder of corporation retailing farm equipment or repair parts. In the event of the death of the retail dealer or majority stockholder in a corporation operating a retail dealership in the business of selling and retailing farm implement, machinery, attachments or repair parts therefor, the wholesaler, distributor, or manufacturer who supplied such merchandise shall repurchase from the heir or heirs of such retail dealer or majority stockholder such merchandise under the same terms and conditions as if the wholesaler, manufacturer, or distributor had terminated the contract. Nothing in this act shall require the repurchase of any farm implements, machinery, attachments or repair parts therefor if the heir or heirs, and the wholesaler, manufacturer or distributor jointly agree to enter into a new contract to operate the retail dealership.

History: L. 1976, ch. 95, § 5; July 1.

 16-1006. Severability of act. If any section in this act or any part of any section shall be declared invalid or unconstitutional, such declaration of invalidity shall not affect the validity of the remaining portions thereof.

History: L. 1976, ch. 95, § 6; July 1.

16-1007. Repurchase obligations in bankruptcy. (a) K.S.A. 16-1002, and amendments thereto, shall apply to the repurchase obligation of any wholesaler, manufacturer, distributor or transferee of any wholesaler, manufacturer or distributor who has filed on or files subsequent to the effective date of this act for protection from creditors pursuant to 11 United States Code 101 et seq.

(b) K.S.A. 16-1002, and amendments thereto, shall apply to the repurchase obligation of any wholesaler, manufacturer, distributor or transferee of any wholesaler, manufacturer or distributor who has a case pending on the effective date of this act for protection from creditors pursuant to 11 United States Code 101 et seq.

(c ) This section shall be part of and supplemental to article 10 of chapter 16 of the Kansas Statutes Annotated.

History: L. 1989, ch. 71, § 2; April 20.

For more information, contact Jeff Flora.