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Minnesota Legislature

Office of the Revisor of Statutes

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

  

                         Laws of Minnesota 1989 

                         CHAPTER 76-H.F.No. 989 
           An act relating to trade practices; providing for 
          payment to farm implement retailer by the 
          manufacturer, wholesaler, or distributor who 
          repurchases stock and inventory; amending Minnesota 
          Statutes 1988, section 325E.06, subdivisions 1, 4, and 
          5. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1988, section 325E.06, 
subdivision 1, is amended to read: 
    Subdivision 1.  [OBLIGATION TO REPURCHASE.] Whenever any 
person, firm, or corporation engaged in the business of selling 
and retailing farm implements and repair parts for farm 
implements enters into a written or oral contract, sales 
agreement, or security agreement whereby the retailer agrees 
with any wholesaler, manufacturer, or distributor of farm 
implements, machinery, attachments or repair parts to maintain a 
stock of parts or complete or whole machines, or attachments, 
and thereafter the written or oral contract, sales agreement, or 
security agreement is terminated, canceled, or discontinued, 
then the wholesaler, manufacturer, or distributor shall pay to 
the retailer or credit to the retailer's account, if the 
retailer has outstanding any sums owing the wholesaler, 
manufacturer, or distributor, unless the retailer should desire 
and has a contractual right to keep such merchandise, a sum 
equal to 100 percent of the net cost of all unused complete farm 
implements, machinery, and attachments in new condition which 
have been purchased by the retailer from the wholesaler, 
manufacturer, or distributor within the 24 months immediately 
preceding notification by either party of intent to terminate, 
cancel, or discontinue the contract, including transportation 
charges which have been paid by the retailer, or invoiced to 
retailer's account by the wholesaler, manufacturer, or 
distributor and the following:  
    (a) 85 percent of the current net prices on repair parts, 
including superseded parts listed in current price lists or 
catalogs in use by the wholesaler, manufacturer, or 
distributor or its predecessor on the date of the termination, 
cancellation, or discontinuance of the contract,; 
    (b) as to any parts not listed in current price lists or 
catalogs, 100 percent of the invoiced price of the repair part 
for which the retailer has an invoice which parts had previously 
been purchased by the retailer from the wholesaler, 
manufacturer, or distributor and are held by the retailer on the 
date of the termination, cancellation, or discontinuance of the 
contract or thereafter received by the retailer from the 
wholesaler, manufacturer, or distributor; and 
    (c) 50 percent of the most recently published price of all 
other parts provided the price list or catalog is not more than 
ten years old as of the date of the cancellation or 
discontinuance of the contract.  
The wholesaler, manufacturer, or distributor shall also pay the 
retailer or credit to the retailer's account a sum equal to five 
percent of the current net price of prices required to be paid 
or credited by this subdivision for all parts returned for the 
handling, packing, and loading of the parts back to the 
wholesaler, manufacturer, or distributor unless the wholesaler, 
manufacturer, or distributor elects to perform inventorying, 
packing, and loading of the parts itself.  Upon the payment or 
allowance of credit to the retailer's account of the sum 
required by this subdivision, the title to the farm implements, 
farm machinery, attachments or repair parts shall pass to the 
manufacturer, wholesaler, or distributor making the payment or 
allowing the credit and the manufacturer, wholesaler, or 
distributor shall be entitled to the possession of the farm 
implements, machinery, attachments or repair parts.  However, 
this section shall not in any way affect any security interest 
which the wholesaler, manufacturer, or distributor may have in 
the inventory of the retailer.  
    Payment required to be made under this subdivision must be 
made not later than 90 days from the date the farm implements, 
machinery, attachments, and repair parts are returned by the 
retailer, and if not by then paid, the amount payable by the 
wholesaler, manufacturer, or distributor bears interest at the 
rate of 1-1/2 percent per month from the date the contract was 
terminated, canceled, or discontinued until the date payment is 
received by the retailer. 
     In lieu of the return of the farm implements, machinery, 
attachments, and repair parts to the wholesaler, manufacturer, 
or distributor, the retailer may advise the wholesaler, 
manufacturer, or distributor that the retailer has implements, 
machinery, attachments, or repair parts that the retailer 
intends to return.  The notice of the dealer's intention to 
return must be in writing, sworn to before a notary public as to 
the accuracy of the listing of implements, machinery, 
attachments, or repair parts and that all of the items are in 
usable condition.  The notice must include the name and business 
address of the person or business who has possession and custody 
of the machinery and parts and where the machinery and parts may 
be inspected and the list of farm implements, machinery, 
attachments, or repair parts may be verified.  The notice must 
also state the name and business address of the person or 
business who has the authority to serve as the escrow agent of 
the retailer, to accept payment or a credit to the retailer's 
account on behalf of the retailer, and to release the machinery 
and parts to the wholesaler, manufacturer, or distributor.  The 
notice constitutes the appointment of the escrow agent to act on 
the retailer's behalf.  The wholesaler, manufacturer, or 
distributor has 30 days from the date of the mailing of the 
notice, which shall be by certified mail, in which to inspect 
the machinery and parts and verify the accuracy of the 
retailer's list.  The wholesaler, manufacturer, or distributor 
shall, within ten days after inspection: 
    (1) pay the escrow agent; 
    (2) give evidence that a credit to the account of the 
retailer has been made if the retailer has outstanding sums due 
the wholesaler, manufacturer, or distributor; or 
    (3) send to the escrow agent a "dummy credit list" and 
shipping labels for the return of the machinery or parts to the 
wholesaler, manufacturer, or distributor that are acceptable as 
returns.  
   If the wholesaler, manufacturer, or distributor sends a 
credit list to the escrow agent, payment or a credit against the 
dealer's indebtedness in accordance with this subdivision for 
the acceptable returns shall accompany the credit list.  On the 
receipt of the payment, evidence of a credit to the account of 
the retailer or the credit list with payment, the title to the 
farm implements, farm machinery, attachments, or repair parts 
acceptable as returns passes to the manufacturer, wholesaler, or 
distributor making the payment or allowing the credit and the 
manufacturer, wholesaler, or distributor is entitled to keep the 
farm implements, machinery, attachments, or repair parts.  The 
escrow agent shall ship or cause to be shipped the machinery and 
parts acceptable as returns to the wholesaler, manufacturer, or 
distributor unless the wholesaler, manufacturer, or distributor 
elects to personally perform the inventorying, packing and 
loading of the machinery and parts.  When the machinery or parts 
have been received by the wholesaler, manufacturer, or 
distributor, notice of the receipt of the machinery or parts 
shall be sent by certified mail to the escrow agent who shall 
then disburse 90 percent of the payment it has received, less 
its actual expenses and a reasonable fee for its services, to 
the retailer.  The escrow agent shall keep the balance of the 
funds in the retailer's escrow account until it is notified that 
an agreement has been reached as to the nonreturnables after 
which the escrow agent shall disburse the remaining funds and 
dispose of any remaining parts or machinery as provided in the 
settlement.  If no settlement is reached in a reasonable time, 
the escrow agent may refer the matter to an arbitrator who has 
authority to resolve all unsettled issues in the dispute. 
    Sec. 2.  Minnesota Statutes 1988, section 325E.06, 
subdivision 4, is amended to read: 
    Subd. 4.  [FAILURE TO PAY SUMS SPECIFIED ON CANCELLATION OF 
CONTRACTS; LIABILITY.] In the event that any manufacturer, 
wholesaler, or distributor of farm implements, machinery, 
attachments and repair parts, upon the cancellation of a 
contract by either a retailer or such manufacturer, wholesaler, 
or distributor, fails or refuses to make payment to the dealer 
or the dealer's heir or heirs as required by this section, the 
manufacturer, wholesaler, or distributor shall be liable in a 
civil action to be brought by the retailer or the retailer's 
heir or heirs for (a) 100 percent of the net cost of the farm 
implements, machinery, and attachments, (b) transportation 
charges which have been paid by the retailer, (c) 85 percent of 
the current net price of repair parts, 100 percent of invoiced 
prices and 50 percent of the price of all other parts as 
provided in subdivision 1, and (d) five percent for handling, 
packing and loading, if applicable.  
    Sec. 3.  Minnesota Statutes 1988, section 325E.06, 
subdivision 5, is amended to read:  
     Subd. 5.  [EXCEPTIONS.] Unless a retailer has delivered 
parts to an escrow agent pursuant to subdivision 1, this section 
shall not require the repurchase from a retailer of a repair 
part where the retailer previously has failed to return the 
repair part to the wholesaler, manufacturer, or distributor 
after being offered a reasonable opportunity to return the 
repair part at a price not less than (a) 85 percent of the net 
price of the repair part as listed in the then current price 
list or catalog, (b) 100 percent of the invoiced price and (c) 
50 percent of the most recent published price as provided in 
subdivision 1.  This section shall not require the repurchase 
from a retailer of repair parts which have a limited storage 
life or are otherwise subject to deterioration, such as rubber 
items, gaskets and batteries; repair parts in broken or damaged 
packages; single repair parts priced as a set of two or more 
items; and repair parts which because of their condition are not 
resalable as new parts without new packaging or reconditioning.  
    Sec. 4.  [EFFECTIVE DATE.] 
    Sections 1 to 3 are effective the day after final enactment 
and apply to contracts now in effect that have no expiration 
date and are a continuing contract and all other contracts 
entered into or renewed after the date of final enactment.  Any 
contract in force and effect on the day of final enactment, 
which by its terms will terminate on a later date and which is 
not renewed, is governed by the law as it existed before the day 
of final enactment. 
    Presented to the governor May 5, 1989 
    Signed by the governor May 9, 1989, 1:30 p.m.