407.840. Dealership agreement, termination--cancellation--failure to renew to be based on good cause--good cause defined.

Dealership agreement, termination--cancellation--failure to renew tobe based on good cause--good cause defined.

407.840. No farm equipment manufacturer, directly or throughany officer, agent or employee may terminate, cancel or fail torenew a dealership agreement or substantially change thecompetitive circumstances of a farm equipment dealership withoutgood cause. Good cause means failure by a farm equipment dealerto substantially comply with essential and reasonablerequirements imposed upon the dealer by the dealership agreementif such requirements are not different from those requirementsimposed on other similarly situated dealers either by their termsor in the manner of their enforcement. In addition, good causeshall exist whenever:

(1) The farm equipment dealer has transferred an interest inthe farm equipment dealership without the manufacturer's writtenconsent, or there has been a withdrawal from the dealership of anindividual proprietor, partner, major shareholder, or the managerof the dealership, or there has been a substantial reduction ininterest of a partner or major stockholder without the writtenconsent of the manufacturer;

(2) The farm equipment dealer has filed a voluntary petitionin bankruptcy or has had an involuntary petition in bankruptcyfiled against it which has not been discharged within thirty daysafter the filing, or there has been a closeout or sale of asubstantial part of the dealer's assets related to the farmequipment dealership or there has been a commencement ordissolution or liquidation of the farm equipment dealership;

(3) There has been a change, without the prior writtenapproval of the manufacturer, in the location of the dealer'sprincipal place of business under the dealership agreement;

(4) The farm equipment dealer has defaulted under anychattel mortgage or other security agreement between the dealerand the farm equipment manufacturer, or there has been arevocation or discontinuance of any guarantee of the dealer'spresent or future obligations to the farm equipment manufacturer;

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

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

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

(8) The farm equipment dealer has consistently failed tomeet the manufacturer's requirements for reasonable marketpenetration based on the manufacturer's experience in othercomparable marketing areas.

(L. 1987 S.B. 35)

*Word "its" appears in original rolls.