Missouri Agricultural Fair Dealership Statute

Farm Equipment Fair Dealership Statute

(Prevents termination of dealer agreement without good cause)

R.S.Mo. § § 407.838, 407.840, 407.842, 407.844, 407.846, and 407.848

(Missouri Agricultural Fair Dealership Statute)

FARM IMPLEMENT DEALERSHIP AGREEMENTS, REGULATION

407.838. Definitions.— As used in sections 407.838 to 407.848, the following terms shall mean:

(1) "Farm equipment", equipment including, but not limited to, tractors, trailers, combines, tillage implements, bailers and other equipment including attachments and repair parts thereof used in the planting, cultivating, irrigation, harvesting and marketing of agricultural products , excluding self-propelled machines designed primarily for the transportation of persons or property on a street or highway;

(2) "Farm equipment manufacturer" or "manufacturer", any person, partnership, corporation, association or other form of business enterprise engaged in the manufacturing, assembly or wholesale distribution of farm equipment;

(3) "Farm equipment dealer", "farm equipment dealership" or "dealer", any person, partnership, corporation, association or other form of business enterprise engaged in the retail sale of farm equipment;

(4) "Dealership agreement", a written or oral agreement of definite or indefinite duration between a farm equipment manufacturer and a farm equipment dealer which provides for the rights and obligations of the parties with respect to the purchase or sale of farm equipment.
(L. 198 S.B. 35)

407.840. Dealership agreement, termination— cancellation— failure to renew to be based on good cause— good cause defined.— No farm equipment manufacturer, directly or through any officer, agent or employee may terminate, cancel or fail to renew a dealership agreement or substantially change the competitive circumstances of a farm equipment dealership without good cause. Good cause means failure by a farm equipment dealer to substantially comply with essential and reasonable requirements imposed upon the dealer by the dealership agreement if such requirements are not different from those requirements imposed on other similarly situated dealers either by their terms or in the manner of their enforcement. In addition, good cause shall exist whenever:

(1) The farm equipment dealer has transferred an interest in the farm equipment dealership without the manufacturer’s written consent, or there has been a withdrawal from the dealership of an individual proprietor, partner, major shareholder, or the manager of the dealership, or there has been a substantial reduction in interest of a partner or major stockholder without the written consent of the manufacturer;

(2) The farm equipment dealer has filed a voluntary petition in bankruptcy or has had an involuntary petition in bankruptcy filed against it which has not been discharged within thirty days after the filing, or there has been a closeout or sale of a substantial part of the dealer’s assets related to the farm equipment dealership or there has been a commencement or dissolution or liquidation of the farm equipment dealership;

(3) There has been a change, without the prior written approval of the manufacturer, in the location of the dealer’s principal place of business under the dealership agreement;

(4) The farm equipment dealer has defaulted under any chattel mortgage or other security agreement between the dealer and the farm equipment manufacturer, or there has been a revocation or discontinuance of any guarantee of the dealer’s present or future obligations to the farm equipment manufacturer;

(5) The farm equipment dealer has failed to operate in the normal course of business for seven consecutive days or has otherwise abandoned his* business;

(6) The farm equipment dealer has pleaded guilty to or has been convicted of a felony affecting the relationship between the dealer and manufacturer;

(7) The dealer has engaged in conduct which is injurious or detrimental to the dealer’s customers or to the public welfare;

(8) The farm equipment dealer has consistently failed to meet the manufacturer’s requirements for reasonable market penetration based on the manufacturer’s experience in other comparable marketing areas.
(L. 1987 S.B. 35)
* Word "its" appears in original roils.

407.842. Notice to dealer of cancellation, content— dealer has sixty days to rectify— exceptions.— Except as otherwise provided in this section, a farm equipment manufacturer shall provide a farm equipment dealer at least 90 days’ prior written notice of termination, cancellation or nonrenewal of the dealership agreement. The notice shall state all reasons constituting good cause for termination, cancellation or nonrenewal and shall provide that the dealer has sixty days in which to cure any claimed deficiency. If the deficiency is rectified within sixty days, the notice shall be void. The notice and right to cure provisions under this section shall not apply if the reason for termination, cancellation or nonrenewal is for any reason set forth in subdivisions (1) to (8) of section 407.840.
(L. 1987 S.B. 35)

407.844. Farm equipment manufacturers, certain acts prohibited.— No farm equipment manufacturer shall:

(1) Coerce, or attempt to coerce, any farm equipment dealer to accept delivery of any farm equipment, parts or accessories therefor, which such farm equipment dealer has not voluntarily ordered;

(2) To condition or attempt to condition the sale of any farm equipment on a requirement that the farm equipment dealer also purchase any other goods or services but nothing contained in sections 407.838 to 407.848 shall prevent the farm equipment manufacturer from requiring the dealer to purchase all parts reasonably necessary to maintain the quality of operation in the field of any farm equipment used in the trade area;

(3) To coerce or attempt to coerce any farm equipment dealer into a refusal to purchase the farm equipment manufactured by another farm equipment manufacturer;

(4) To discriminate in the prices charged for farm equipment of like grade and quality sold by the farm equipment manufacturer to similarly situated farm equipment dealers, but nothing contained in sections 407.838 to 407.848 shall prevent differentials which make only due allowance for difference in the cost of manufacture, sale or delivery resulting from the differing methods or quantities in which such farm equipment is sold or delivered, by the farm equipment manufacturer.
(L. 1987 S.B. 35)

407.846. Law applicable to dealer’s agreements, when.— The provisions of sections 407.838 to 407.848 shall apply to all dealership agreements now in effect and all other dealership agreements entered into or renewed after September 28, 1987.
(L. 1987 S.B. 35)

407.848. Damages in civil action or injunction for dealer against manufacturer, when.— If any farm equipment manufacturer violates any provision of sections 407.838 to 407.848, a farm equipment dealer may bring an action against such manufacturer in any court of competent jurisdiction for damages sustained by the dealer as a consequence of the manufacturer’s violation, together with the actual costs of the action, including reasonable attorneys fees, and the dealer also may be granted injunctive relief against unlawful termination, cancellation, nonrenewal or substantial change of competitive circumstances. The remedies set forth in this section shall not be deemed exclusive and shall be in addition to any other remedies permitted by law.
(L. 1987 S.B. 35)

SUCCESSION TO OWNERSHIP

 AN ACT relating to certain farm and industrial equipment dealers and manufacturers.

Chapter 407, RSMo, is amended by adding thereto one new section relating to certain farm and industrial equipment dealers and manufacturers.

Section A Chapter 407, RSMo, is amended by adding thereto one new section, to be known as section 407.307, to read as follows:

 407.307. 1. The provisions of this section shall apply to:

(1) Farm implement dealerships, as provided in sections 407.838 to 407.880;

(2) Industrial maintenance and construction power equipment dealerships, as provided in sections 407.750 to 407.757; and

(3) Outdoor power equipment dealerships, as provided in sections 407.890 to 407.898.

2. A manufacturer, wholesaler or distributor shall have ninety days in which to consider and make a determination on a request by a dealer/retailer to sell or transfer any portion of his or her business ownership to another party or to enter into an agreement to operate the dealership with another party.  The dealer/retailer’s request shall include the reasonable financial information, personal background, character references and work histories as required by the manufacturer to render such a determination.  In the event the manufacturer or distributor determines that the request is not acceptable, the manufacturer or distributor shall provide the dealer/retailer with a written notice of its determination with the stated reasons for nonacceptance.

 For more information, contact Jeff Flora.