law22244

Chapter 244

2022 -- S 2405 SUBSTITUTE A
Enacted 06/28/2022

A N A C T

RELATING TO COMMERCIAL LAW -- GENERAL REGULATORY PROVISIONS THE RHODE ISLAND DEALERSHIP PRESERVATION AND PROTECTION ACT

Introduced By: Senator Roger Picard

Date Introduced: February 15, 2022

It is enacted by the General Assembly as follows:

SECTION 1. Sections 6-54-2, 6-54-4 and 6-54-9 of the General Laws in Chapter 6-54

entitled "General Regulatory Provisions The Rhode Island Dealership Preservation And Protection

Act" are hereby amended to read as follows:

6-54-2. Definitions.

As used in this chapter:

(1) "Community of interest" means a continuing financial interest between the grantor and

the grantee in either the operation of the dealership business or the marketing of such goods or

services;.

(2) "Continuing financial interest" means the following:

(i) A dealership relationship of at least one year in duration between the grantor and dealer,

without regard to:

(A) Any minimum percentage of revenue or profit derived therefrom by the dealer;

(B) Any minimum financial investment by the dealer; or

(ii) The dealer has expended, allocated, or dedicated revenue or personnel to promoting the

sale or distribution of the grantor's goods or services, including investments in grantor inventory,

sales and marketing, or facilities; and

(iii) Dealer and grantor cooperate, coordinate activities, or share common goals;.

(2)(3) "Dealer" means a person who is a grantee of a dealership situated in this state, and

any successor in interest, regardless of the subsequent sale or change in ownership of such entity;.

(3)(4) "Dealership" means any of the following:

(i) A contract or agreement, either expressed or implied, whether oral or written, between

two (2) or more persons, by which a person is granted the right to sell or distribute goods or services,

or use a trade name, trademark, service mark, logotype, advertising, or other commercial symbol,

in which there is a community of interest in the business of offering, selling, or distributing goods

or services at wholesale, retail, by lease, agreement, or otherwise.

(4)(5) "Good cause" means, for the purposes of this act, good cause for terminating,

diminishing, canceling, or nonrenewal shall mean:

(i) The failure by the dealer to substantially comply with the reasonable requirements

imposed by the grantor; or

(ii) Any of the reasons listed in subdivisions §§ 6-54-4(a)(1) through (a)(6). A sale or

change in ownership shall not constitute good cause.

(5)(6) "Grantor" means a person who grants a dealership, and any successor in interest,

regardless of the subsequent sale or change in ownership of such person;.

(6)(7) "Person" means a natural person, partnership, joint venture, corporation, or other

entity. ;.

(8) "Sale or change in ownership" means with respect to any grantor or dealer, the direct

or indirect sale of such person's assets or equity ownership, whether by merger or sale or other

change in control event. A sale or change in ownership shall be considered for purposes of this

chapter as a continuation of the prior dealership relationship and shall not be deemed to have

interrupted, ended, or restarted such relationship between the parties.

6-54-4. Notice of termination or change in dealership.

(a) Notwithstanding the terms, provisions, or conditions of any agreement to the contrary,

a grantor shall provide a dealer sixty (60) days prior written notice of termination, cancellation, or

nonrenewal. The notice shall state all reasons for termination, cancellation, or nonrenewal and shall

provide that the dealer has thirty (30) days in which to cure any claimed deficiency; provided, that

a dealer has a right to cure three (3) times in any twelve-(12) month (12) period during the period

of the dealership agreement. The sixty-(60) day (60) notice provisions of this section shall not apply

and the termination, cancellation, or nonrenewal may be made effective immediately upon written

notice, if the reason for termination, cancellation, or nonrenewal is in the event the dealer:

(1) Voluntarily abandons the dealership relationship;

(2) Is convicted of a felony offense related to the business conducted pursuant to the

dealership;

(3) Engages in any substantial act which that tends to materially impair the goodwill of

the grantor's trade name, trademark, service mark, logotype, or other commercial symbol;

(4) Makes a material misrepresentation of fact to the grantor relating to the dealership;

(5) Attempts to transfer the dealership (or a portion thereof) without authorization of the

grantor, excluding a sale or change of ownership; or

(6) Is insolvent, files or suffers to be filed against it any voluntary or involuntary

bankruptcy petition, or makes an assignment for the benefit of creditors or similar disposition of

assets of the dealer business.

(b) If the reason for termination, cancellation, or nonrenewal is nonpayment of sums due

under the dealership, the dealers dealer shall be entitled to written notice of such default, and shall

have ten (10) days in which to cure such default from the date of such notice. A dealer has the right

to cure three (3) times in any twelve-(12) month (12) period during the period of the dealership

agreement.

regulation, or standard relating to public health or safety, the dealer shall be entitled to immediate

written notice and shall have twenty-four (24) hours five (5) days to cure such violation from the

date of receipt of the written notice.

(d) No grantor may terminate, cancel, or fail to renew a dealership, directly or indirectly,

or otherwise take any action to diminish the dealership or its value, other than for good cause. No

grantor may terminate, cancel, or fail to renew a dealership, directly or indirectly, or otherwise take

any action to diminish the dealership or its value, if the dealership shall cure the alleged deficiency

or violation in accordance with the provisions of this chapter.

6-54-9. Nonapplicability.

This chapter shall not apply to malt beverage dealerships; motor vehicle dealerships;

insurance agency relationships; any relationship relating to the sale or administration of insurance

or any similar contract with an entity organized under chapters chapter 19 or 20 of title 27; fuel

distribution dealerships; door-to-door sales; dealers and single-line dealers as defined in § 6-46-2;

dealerships;, and franchises, franchisors, franchisees, dealers and dealerships that are subject to,

and comply with or are exempt from, the provisions of chapter 28.1 of title 19, known as the "Rhode

Island Franchise Investment Act."

SECTION 2. Chapter 6-54 of the General Laws entitled "General Regulatory Provisions

The Rhode Island Dealership Preservation And Protection Act" is hereby amended by adding

thereto the following section:

6-54-10. Exclusive jurisdiction.

Notwithstanding any agreements between grantor and dealer to the contrary, the courts in

Rhode Island shall have the exclusive jurisdiction over any disputes arising out of or relating to this

chapter including, but not limited to, any claim for which a dealer relies on this chapter as a defense

to any purported termination, cancellation, or failure to renew.

SECTION 3. This act shall take effect upon passage.

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LC004668/SUB A

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