Arizona § 44-6703 - Dealer agreements; cancellation

§ 44-6703. Dealer agreements; cancellation

A. Unless one or more of subsection B, paragraphs 1 through 10 apply, a supplier shall give an equipment dealer ninety days' written notice of the supplier's intent to terminate, cancel or not renew a dealer agreement or to change the competitive circumstances of that agreement. The notice shall state the reasons for this action and that the dealer has sixty days to cure any claimed deficiency. If the dealer cures the deficiency to the supplier's satisfaction within that time, the supplier may not terminate, cancel, refuse to renew or change the competitive circumstances of the agreement for the reasons specified in the notice. The agreement's terms do not expire and the supplier shall not change the competitive circumstances of the agreement before the end of the ninety day period without the dealer's written consent.

B. A supplier, either directly or through an agent, shall not terminate, cancel, fail to renew or substantially change the competitive circumstances of a dealership agreement without cause. For the purposes of this subsection, "cause" means that a dealer:

1. Fails to comply with the terms of the agreement if these requirements are not different from those imposed on other similarly situated dealers in this state.

2. Transfers a controlling ownership interest in the dealership without the supplier's consent. The supplier shall not withhold consent without good reason.

3. Makes a material misrepresentation or falsification of a record.

4. Files a voluntary petition in bankruptcy or has an involuntary petition in bankruptcy filed against him that has not been discharged within sixty days after it was filed.

5. Is insolvent or in receivership.

6. Pleads guilty to or is convicted of a felony.

7. Fails to operate in the normal course of business for seven consecutive business days or terminates the business.

8. Relocates or establishes a new or additional equipment dealer's place of business without the supplier's consent.

9. Fails to satisfy a payment obligation as it comes due and payable to the supplier.

10. Fails to promptly account to the supplier for any proceeds from the sale of equipment or to hold these proceeds in trust for the supplier's benefit.

11. Consistently engages in business practices that are detrimental to the consumer or the supplier including excessive pricing, misleading advertising or failing to provide service and replacement parts or to perform warranty obligations.

12. Consistently fails to meet the supplier's market penetration requirements based on available record information and after receiving notice from the supplier of the supplier's requirements.

13. Consistently fails to meet building and housekeeping requirements.

14. Consistently fails to provide adequate sales, service or parts personnel commensurate with the dealer agreement.

15. Consistently fails to comply with the applicable licensing laws pertaining to the products and services the dealer represents as being for and on the supplier's behalf.