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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1988 

                        CHAPTER 511-S.F.No. 2096 
           An act relating to commerce; regulating and governing 
          business relations between manufacturers of 
          agricultural equipment and independent retail dealers 
          of those products; proposing coding for new law in 
          Minnesota Statutes, chapter 325E. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  [325E.061] [DEFINITIONS.] 
    Subdivision 1.  [SCOPE.] For the purposes of sections 1 to 
5, the terms defined in this section have the meanings given 
them. 
    Subd. 2.  [FARM EQUIPMENT.] "Farm equipment" means 
equipment including, but not limited to, tractors, trailers, 
combines, tillage implements, balers, skid steer loaders, and 
other equipment including attachments and repair parts 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. 
    Subd. 3.  [FARM EQUIPMENT MANUFACTURER.] "Farm equipment 
manufacturer" means a person, partnership, corporation, 
association, or other form of business enterprise engaged in the 
manufacturing, assembly, or wholesale distribution of farm 
equipment.  The term also includes any successor in interest of 
the farm equipment manufacturer, including any purchaser of 
assets or stock, any surviving corporation resulting from a 
merger or liquidation, any receiver or assignee, or any trustee 
of the original farm equipment manufacturer.  
    Subd. 4.  [FARM EQUIPMENT DEALER OR DEALERSHIP.] "Farm 
equipment dealer" or "farm equipment dealership" means a person, 
partnership, corporation, association, or other form of business 
enterprise engaged in the retail sale of farm equipment. 
    Subd. 5.  [DEALERSHIP AGREEMENT.] "Dealership agreement" 
means an oral or written 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. 
    Sec. 2.  [325E.062] [TERMINATIONS OR CANCELLATIONS.] 
    Subdivision 1.  [GOOD CAUSE REQUIRED.] No farm equipment 
manufacturer, directly or through an officer, agent, or employee 
may terminate, cancel, fail to renew, or substantially change 
the competitive circumstances of a dealership agreement 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 the requirements are not different from those 
requirements imposed on other similarly-situated dealers by 
their terms.  In addition, good cause exists whenever: 
    (1) without the consent of the farm equipment manufacturer 
who shall not withhold consent unreasonably, (a) the farm 
equipment dealer has transferred an interest in the farm 
equipment dealership, or (b) there has been a withdrawal from 
the dealership of an individual proprietor, partner, major 
shareholder, or the manager of the dealership, or (c) there has 
been a substantial reduction in interest of a partner or major 
stockholder; 
    (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 
30 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 business, or there has been a commencement of 
dissolution or liquidation of the dealer; 
    (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 a chattel 
mortgage or other security agreement between the dealer and the 
farm equipment manufacturer, or there has been a revocation or 
discontinuance of a 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 the 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; 
or 
    (8) the farm equipment dealer, after receiving notice from 
the manufacturer of its requirements for reasonable market 
penetration based on the manufacturer's experience in other 
comparable marketing areas, consistently fails to meet the 
manufacturer's market penetration requirements. 
    Subd. 2.  [NOTICE.] Except as otherwise provided in this 
subdivision, 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 the action and shall provide that the dealer has 60 
days in which to cure any claimed deficiency.  If the deficiency 
is rectified within 60 days, the notice is void.  The notice and 
right to cure provisions under this section do not apply if the 
reason for termination, cancellation, or nonrenewal is for any 
reason set forth in subdivision 1, clauses (1) to (7). 
    Sec. 3.  [325E.063] [VIOLATIONS.] 
    (a) It is a violation of sections 1 to 5 for a farm 
equipment manufacturer to coerce a farm equipment dealer to 
accept delivery of farm equipment, parts, or accessories which 
the farm equipment dealer has not voluntarily ordered. 
    (b) It is a violation of sections 1 to 5 for a farm 
equipment manufacturer to: 
    (1) condition or attempt to condition the sale of farm 
equipment on a requirement that the farm equipment dealer also 
purchase other goods or services; except that a farm equipment 
manufacturer may require 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 and 
telecommunication necessary to communicate with the farm 
equipment manufacturer; 
    (2) coerce or attempt to coerce a farm equipment dealer 
into a refusal to purchase the farm equipment manufactured by 
another farm equipment manufacturer; 
    (3) 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.  The 
clause does not prevent the use of differentials which make only 
due allowance for difference in the cost of manufacture, sale, 
or delivery or for the differing methods or quantities in which 
the farm equipment is sold or delivered, by the farm equipment 
manufacturer; or 
     (4) attempt or threaten to terminate, cancel, fail to renew 
or substantially change the competitive circumstances of the 
dealership agreement if the attempt or threat is based on the 
results of a natural disaster, including a sustained drought in 
the dealership market area, a labor dispute or other 
circumstance beyond the dealer's control. 
    Sec. 4.  [325E.064] [STATUS OF INCONSISTENT AGREEMENTS.] 
    A term of a dealership agreement either expressed or 
implied which is inconsistent with the terms of sections 1 to 5 
is void and unenforceable and does not waive any rights which 
are provided to a person by sections 1 to 5. 
    Sec. 5.  [325E.065] [REMEDIES.] 
    If a farm equipment manufacturer violates sections 1 to 5, 
a farm equipment dealer may bring an action against the 
manufacturer in a 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 attorney's fees, and the dealer also may be 
granted injunctive relief against unlawful termination, 
cancellation, nonrenewal, or substantial change of competitive 
circumstances.  The remedies in this section are in addition to 
any other remedies permitted by law. 
    Sec. 6.  [325E.066] [CITATION.] 
    Sections 1 to 5 may be cited as the "Minnesota agricultural 
equipment dealership act." 
     Sec. 7.  [325E.067] [APPLICABILITY.] 
    The provisions of sections 1 to 5 are effective the day 
after enactment and apply to all dealership agreements now in 
effect which have no expiration date and which are continuing 
contracts, and all other contracts entered into, amended, or 
renewed after the day of enactment.  Any contract in force and 
effect on the day of enactment, which by its terms will 
terminate on a date subsequent thereto and which is not renewed 
is governed by the law as it existed before the day of enactment.
    Approved April 13, 1988