Section 407.413

Title XXVI TRADE AND COMMERCE

Chapter 407

Effective - 28 Aug 1998   

  407.413.  Wholesale liquor franchises, discrimination prohibited, when — supplier not to alter franchise without cause — good faith defined — damages to franchise holder, when — provisions applicable when — substantially amended defined. — 1.  If more than one franchise for the same brand or brands of intoxicating liquor is granted to different wholesalers in this state, it is a violation of sections 407.400 to 407.420 for any supplier to discriminate between the wholesalers with respect to any of the terms, provisions, and conditions of these franchises.

  2.  Notwithstanding the terms, provisions and conditions of any franchise, no supplier shall unilaterally terminate or refuse to continue or change substantially the condition of any franchise with the wholesaler unless the supplier has first established good cause for such termination, noncontinuance or change.

  3.  Any wholesaler may bring an action in a court of competent jurisdiction against a supplier for violation of any of the provisions of this section and may recover damages sustained by such wholesaler together with the costs of the action and reasonable attorney's fees.

  4.  In any action brought by a wholesaler against a supplier for termination, noncontinuance or substantial change in violation of the provisions of this section, it is a complete defense for the supplier to prove that the termination, noncontinuance or change was done in good faith and for good cause.

  5.  As used in this section, "good faith" is the duty of each party to any franchise and all officers, employees or agents thereof to act in a fair and equitable manner towards each other, and "good cause" means the following:

  (1)  Failure by the wholesaler to comply substantially with the provisions of an agreement or understanding with the supplier, which provisions are both essential and reasonable;

  (2)  Use of bad faith or failure to observe reasonable commercial standards of fair dealing in the trade; or

  (3)  Revocation or suspension for more than thirty-one days of a beer wholesaler's federal basic permit or of any state or local license required of a beer wholesaler for the normal operation of its business.

  6.  As to brewers and beer wholesalers, the provisions of this section shall only apply to agreements entered into on or after August 28, 1998, and to agreements which are renewed or substantially amended on or after August 28, 1998.  As used in the preceding sentence, "substantially amended" means a written amendment that materially alters the fundamental business relationship between brewer and wholesaler.  "Substantially amended" does not include changes or amendments that are contemplated in writing by the parties to an agreement.

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(L. 1975 H.B. 810 § 4, A.L. 1998 H.B. 957 & 1063)

(1978) Amendment adding this section to bill during passage did not violate constitutional requirements that bill contain no more than one subject and that it be clearly expressed in the title, and that bill was so amended in its passage as to change its original purpose. Brown-Forman Distillers Corp. v. McHenry (Mo.), 556 S.W.2d 194.