Alabama Code 8-21A-6. Supplier’s duties to dealers – Agreements to maintain inventory; supplier’s duty to repurchase inventory, etc. upon termination of agreement; transfer of title and right of possession; continuing security interest; items not c…

(a) Whenever any dealer enters into a dealer agreement with a supplier wherein the dealer agrees to maintain an inventory of equipment and/or repair parts and the dealer agreement is subsequently terminated or not renewed, whether by either party or mutual consent of both, the supplier shall repurchase the inventory as provided in this section. Further, supplier shall repurchase at its fair market value or assume the lease responsibilities of any specific data processing hardware and/or software that the supplier required the dealer to purchase to satisfy the minimum requirements of the dealer agreement and repurchase at 75 percent of the current net price any merchandising tools, accessories, and specialized repair tools, previously purchased pursuant to requirements of the supplier and held by the dealer on the date of termination. Dealer may, at his option, elect to retain such tools if it is not in violation of any contract terms held by the supplier.

Attorney's Note

Under the Alabama Code, punishments for crimes depend on the classification. In the case of this section:

Class	Prison	Fine
Violation	up to 30 days	up to $200

For details, see Ala. Code § 13A-5-7

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Terms Used In Alabama Code 8-21A-6

Contract: A legal written agreement that becomes binding when signed.
Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). ^{Source: OCC}
state: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Alabama Code 1-1-1
Statute: A law passed by a legislature.
Uniform Commercial Code: A set of statutes enacted by the various states to provide consistency among the states' commercial laws. It includes negotiable instruments, sales, stock transfers, trust and warehouse receipts, and bills of lading. ^{Source: OCC}

(b) If the dealer decides not to keep the inventory, supplier shall repurchase the inventory, specific data processing hardware and software, merchandising equipment, tools, and accessories, and specialized repair tools previously purchased by dealer and held by dealer on the date of termination of the dealer agreement. Supplier shall pay 100 percent of the net cost of all new, unsold, undamaged and complete tractors and equipment, 100 percent of the current net price of all new, unused, undamaged repair parts and accessories which are listed in the supplier’s effective price list or catalog. The supplier shall also pay the dealer six percent of the current net price of all new, unused and undamaged repair parts returned as payment for the cost of handling, packing, and loading. Supplier shall have the option of performing the handling, packing, and loading and paying 100 percent of the current net price of parts in lieu of paying the additional six percent sum imposed herein for these services and in this case, the dealer shall make available to the supplier, at the dealer’s address or at the places at which it is located, all equipment previously purchased by the dealer, after a satisfactory repurchase amount has been negotiated. Provided, however, that merchandising tools and accessories and specialized repair tools must have been purchased within the last three years, and must be complete, usable and unique to the product line.

(c) Upon payment or credit of the repurchase amount to the dealer, the title and right to possession of the repurchased inventory shall transfer or be transferred to the supplier and, notwithstanding the provisions for the state‘s Uniform Commercial Code to file notice of a security interest, the dealer shall have a continuing security interest in the inventory until payment or the issuance of credit against any undisputed account balance claimed against dealer by supplier.

(d) The provisions of this chapter shall not require the repurchase from the dealer by supplier of:

(1) Any single repair part which is priced as a set of two or more items;

(2) Any repair part which, because of its condition, is not resalable as a new part without reconditioning or repairing;

(3) Any inventory from which the dealer is unable to furnish evidence, reasonably satisfactory to the supplier, of good title, free and clear of all claims, liens, and encumbrances;

(4) Any inventory which the equipment dealer desires to keep, provided dealer has a contractual right to do so;

(5) Any equipment or repair parts which are not in new, unused, undamaged condition;

(6) Any inventory which was ordered by the dealer on or after the date of receipt of the notification of termination or nonrenewal of the dealer agreement; or

(7) Any inventory which was acquired by the dealer from any source other than the supplier, other than a successor in interest as provided in Section 8-21A-9.

(e) If any supplier shall fail or refuse to repurchase any inventory covered under the provisions of this chapter within ninety days after termination or nonrenewal of dealer agreement, the supplier shall be civilly liable to the dealer for the total amount of 115 percent of the current net price of the inventory, plus any freight charges paid by the dealer, plus all cost of financing such repurchase, including court costs, and reasonable attorney’s fee as awarded by court or statute.

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