Missouri Industrial, Maintenance and Construction Power Equipment Fair Dealership Statute

  407-753; 407-754; 407-755; 407-756

Manufacturer, wholesaler or distributor not to terminate contract except for good cause--good cause, how established.

407.753. 1. Any manufacturer, wholesaler or distributor of industrial, maintenance and construction power equipment used for industrial, maintenance and construction applications and repair parts therefor, who enters into a written or parol contract with any person, firm, or corporation engaged in the business of selling and repairing industrial, maintenance and construction power equipment used for industrial, maintenance and construction applications and repair parts therefor, whereby such retailer agrees to maintain a stock of parts or complete or whole machines or attachments, shall not terminate, cancel, or fail to renew any such contract without good cause. "Good cause" means failure by the retailer to substantially comply with essential and reasonable requirements imposed upon the retailer by the contract if such requirements are not different from those requirements imposed on other similarly situated retailers either by their terms or in the manner of their enforcement. In addition, good cause shall exist whenever:

(1) The retailer has transferred an interest in the retailer business without the manufacturer's, wholesaler's or distributor's written consent, or there has been a withdrawal from the retailer's business of an individual proprietor, partner, major shareholder, or the manager of the retailer's business, or there has been a substantial reduction in interest of a partner or major stockholder without the written consent of the manufacturer, wholesaler, or distributor;

(2) The retailer 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 retailer's assets related to the retailer's business or there has been a commencement or dissolution or liquidation of the retailer's business;

(3) There has been a change, without the prior written approval of the manufacturer, wholesaler, or distributor, in the location of the retailer's principal place of business under the retailer's agreement with the manufacturer, wholesaler, or distributor;

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

(5) The retailer has failed to operate in the normal course of business for seven consecutive days or has otherwise abandoned his business, except for reasonable and customary closures of business;

(6) The retailer has pleaded guilty to or has been convicted of a felony affecting the relationship between the retailer and the manufacturer, wholesaler, or distributor;

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

(8) The retailer has consistently failed to meet the manufacturer's, wholesaler's or distributor's requirements for reasonable market penetration based on the manufacturer's, wholesaler's, or distributor's experience in other comparable marketing areas.

 2. Except as otherwise provided in this section, a supplier shall provide a retailer at least ninety-days prior written notice of termination, cancellation, or nonrenewal of the contract. 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 this section.

  

How to apply to successors in interest--successor in interest defined.

407.754. The obligations of any wholesaler, manufacturer or distributor created by the provisions of sections 407.750 to 407.754 apply to any successor in interest or assignee of that wholesaler, manufacturer, or distributor. A "successor in interest" includes any purchaser of substantially all of the assets or over fifty percent of the stock, any surviving corporation resulting from a merger or liquidation, any receiver, or any trustee of the original wholesaler, manufacturer or distributor.

 Action for damages and costs by retailer for violations--remedy not exclusive.

407.755. If a manufacturer, wholesaler or distributor violates any provisions of sections 407.753 and 407.754, a retailer may bring an action against such manufacturer, wholesaler, or distributor in any court of competent jurisdiction for damages sustained by the retailer as a consequence of the violation, together with the actual costs of the action, including reasonable attorney's fees. The court may award court costs and reasonable attorney fees to the prevailing party. The remedies set forth in this section shall not be deemed exclusive and shall be in addition to any other remedies permitted by law.

 Law, applicability to existing and future contracts.

407.756. The provisions of sections 407.750 to 407.756 shall apply to all continuing or nonrenewable contracts and all other contracts entered into, amended, or renewed after August 28, 1991. Any contract in force and effect on August 28, 1991, which, by its terms, will terminate on a date subsequent thereto, is governed by the law as it existed before August 28, 1991.

 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.