Section 407.895

Title XXVI TRADE AND COMMERCE

Chapter 407

Effective - 28 Aug 1989   

  407.895.  Manufacturer, wholesaler or distributor not to terminate contract except for good cause — good cause established, how. — Any manufacturer, wholesaler or distributor of outdoor power equipment used for lawn, garden, golf course, landscaping or grounds maintenance, 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 outdoor power equipment used for lawn, garden, golf course, landscaping or grounds maintenance 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.

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(L. 1989 S.B. 41 § 4)