23-112-1012. Termination, cancellation, or nonrenewal of dealer agreement.

23-112-1012. Termination, cancellation, or nonrenewal of dealer agreement. (a)(1) A manufacturer or distributor, directly or through any authorized officer, agent, or employee, may terminate, cancel, or fail to renew a dealer agreement with or without good cause. (2) If the manufacturer or distributor terminates, cancels, or fails to renew the dealer agreement without good cause, the manufacturer or distributor shall comply with § 23-112-1013. (3) If the manufacturer or distributor terminates, cancels, or fails to renew the dealer agreement with good cause, the terms of § 23-112-1013 do not apply. (b)(1) When terminating or cancelling for good cause, the manufacturer or distributor has the burden of showing good cause for terminating or cancelling a dealer agreement with a dealer. (2) For purposes of determining whether there is good cause for the proposed action, any of the following factors may be considered: (A) The extent of the affected dealer's penetration in the area of sales responsibility; (B) The nature and extent of the dealer's investment in its business; (C) The adequacy of the dealer's service facilities, equipment, parts, supplies, and personnel; (D) The effect of the proposed action on the community; (E) The extent and quality of the dealer's service under warranties associated with recreational vehicles; (F) The failure to follow agreed-upon procedures or standards related to the overall operation of the dealership; and (G) The performance of the dealer under the terms of its dealer agreement. (c)(1) Except as otherwise provided in this section, a manufacturer or distributor shall provide a dealer with at least ninety (90) days' prior written notice of termination, cancellation, or nonrenewal of the dealer agreement if the dealer is being terminated for good cause. (2) The notice shall state: (A) All reasons for the proposed termination, cancellation, or nonrenewal of the dealer agreement; and (B)(i) That if within thirty (30) days following receipt of the notice the dealer provides to the manufacturer or distributor a written notice of intent to cure all claimed deficiencies, the dealer will then have ninety (90) days following receipt of the original notice to rectify the deficiencies. (ii) If the deficiencies are rectified within ninety (90) days following receipt of the original notice, the manufacturer's or distributor's notice is voided. (iii) If the dealer fails to provide the notice of intent to cure the deficiencies in the prescribed time period, the termination, cancellation, or nonrenewal takes effect thirty (30) days after the dealer's receipt of the original notice from the manufacturer. If the dealer has new and untitled recreational vehicle inventory, the inventory may be sold under § 23-112-1014. (3) The notice period may be reduced to thirty (30) days if the manufacturer's or distributor's grounds for termination, cancellation, or nonrenewal are due to any of the following good-cause factors: (A) A dealer's or one (1) of its owners' being convicted of, or entering a plea of nolo contendere to, a felony; (B) The abandonment or closing of the business operations of the dealer for ten (10) consecutive business days unless the closing is due to an act of God, strike, labor difficulty, or other cause over which the dealer has no control; (C) A misrepresentation by the dealer materially affecting the business relationship; (D) A suspension or revocation of the dealer's license or refusal to renew the dealer's license by the Arkansas Motor Vehicle Commission; or (E) A material violation of this subchapter that is not cured within thirty (30) days after the written notice by the manufacturer. (4) The notice provisions of this subsection do not apply if the reason for termination, cancellation, or nonrenewal is: (A) The dealer's insolvency; (B) The occurrence of an assignment for the benefit of creditors; or (C) Bankruptcy. (d)(1) A dealer may terminate or cancel its dealer agreement with a manufacturer or distributor with or without good cause by giving ninety (90) days' written notice. (2) If the termination or cancellation is for good cause, the notice shall state: (A) All reasons for the proposed termination or cancellation; and (B) That if within thirty (30) days following receipt of the notice the manufacturer or distributor provides to the dealer a written notice of intent to cure all claimed deficiencies, the manufacturer or distributor will then have ninety (90) days following receipt of the original notice to rectify the deficiencies. (3)(A) If the deficiencies are rectified within ninety (90) days from receipt of the original notice, the dealer's notice is voided. (B) If the manufacturer or distributor fails to provide the notice of intent to cure the deficiencies in the time period prescribed in the original notice of termination or cancellation, the pending termination or cancellation shall take effect thirty (30) days after the manufacturer's or distributor's receipt of the original notice. (4)(A) If the dealer terminates, cancels, or fails to renew the dealer agreement without good cause, the terms of § 23-112-1013 do not apply. (B) If the dealer terminates, cancels, or fails to renew the dealer agreement with good cause, the terms of § 23-112-1013 do apply. (C) The dealer has the burden of showing good cause. (D) Any of the following items shall be deemed good cause for the proposed termination, cancellation, or nonrenewal action by a dealer: (i) A manufacturer's being convicted of, or entering a plea of nolo contendere to, a felony; (ii) The business operations of the manufacturer having been abandoned or closed for ten (10) consecutive business days, unless the closing is due to an act of God, strike, labor difficulty, or other cause over which the manufacturer has no control; (iii) A significant misrepresentation by the manufacturer materially affecting the business relationship; (iv) A material violation of this subchapter which is not cured by the manufacturer within thirty (30) days after written notice; or (v) A declaration by the manufacturer of bankruptcy, insolvency, or the occurrence of an assignment for the benefit of creditors or bankruptcy. (e) If the dealer agreement is terminated or cancelled with or without cause, the terminating or cancelling party shall notify the commission of the termination or cancellation within ten (10) days of sending the termination or cancellation notice and include a copy of the notice.