Florida Statutes 686.413 – Unlawful acts and practices
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Unfair methods of competition and unfair or deceptive acts or practices in the conduct of the manufacturing, distribution, wholesaling, franchising, sale, and advertising of equipment are declared to be unlawful.
(1) It is deemed a violation of this section for any manufacturer, factory branch, factory representative, distributor, distributor branch, distributor representative, wholesaler, or dealer to engage in any action which is arbitrary, capricious, in bad faith, or unconscionable and which causes damage in terms of law or equity to any of the parties or to the public.
(2) It is deemed a violation of this section for a manufacturer, factory branch or division, distributor, distributor branch or division, wholesaler, or wholesale branch or division, or officer, agent, or other representative thereof, to coerce, compel, or attempt to coerce or compel any dealer:
(a) To order or accept delivery of any equipment, parts or accessories therefor, or other commodity or commodities which such dealer has not voluntarily ordered.
Terms Used In Florida Statutes 686.413
- Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
- Contract: A legal written agreement that becomes binding when signed.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- person: includes individuals, children, firms, associations, joint adventures, partnerships, estates, trusts, business trusts, syndicates, fiduciaries, corporations, and all other groups or combinations. See Florida Statutes 1.01
- writing: includes handwriting, printing, typewriting, and all other methods and means of forming letters and characters upon paper, stone, wood, or other materials. See Florida Statutes 1.01
(b) To order or accept delivery of any equipment with special features, accessories, or equipment not included in the base list price of such equipment as publicly advertised by the manufacturer of the equipment.
(3) It is deemed a violation of this section for a manufacturer, factory branch or division, distributor, distributor branch or division, wholesaler, or wholesale branch or division, or officer, agent, or other representative thereof:
(a) To refuse to deliver to any dealer having a franchise or contractual agreement for the retail sale of new equipment sold or distributed by such manufacturer, factory branch or division, distributor branch or division, or wholesale branch or division, in reasonable quantities and within a reasonable time after receipt of the dealer’s order, any equipment covered by such franchise or contract specifically advertised or represented by such manufacturer, factory branch or division, distributor, distributor branch or division, wholesaler, or wholesale branch or division to be available for immediate delivery. However, the failure to deliver any such equipment is not considered a violation of this section if such failure is due to a prudent and reasonable restriction on the extension of credit by the franchisor to the dealer, an act of God, a work stoppage or delay due to a strike or labor difficulty, a bona fide shortage of materials, a freight embargo, or another cause over which the manufacturer, distributor, or wholesaler, or any agent thereof, has no control whatsoever.
(b) To coerce, compel, or attempt to coerce or compel any dealer to enter into any agreement, whether written or oral, supplementary to an existing franchise with such manufacturer, factory branch or division, distributor, distributor branch or division, wholesaler, or wholesale branch or division, or officer, agent, or other representative thereof; or to do any other act prejudicial to such dealer by threatening to cancel any franchise or contractual agreement existing between such manufacturer, factory branch or division, distributor, distributor branch or division, wholesaler, or wholesale branch or division and such dealer. However, notice in good faith to any dealer of such dealer’s violation or breach of any terms or provisions of such franchise or contractual agreement does not constitute a violation of this section if such notice is in writing and is mailed by registered or certified mail to such dealer at her or his current business address and such notice contains the specific facts as to the dealer’s violation or breach of such franchise or contractual agreement.
(c)1. To terminate the franchise or selling agreement of any dealer without due cause, as defined in subparagraph 2. The termination of a franchise or selling agreement, without due cause, constitutes an unfair termination, regardless of the specified time period of such franchise or selling agreement. Except when the ground for such termination falls within sub-subparagraph 2.c., such manufacturer, factory branch or division, distributor, distributor branch or division, wholesaler, or wholesale branch or division, or officer, agent, or other representative thereof, shall notify a dealer in writing of the termination of the franchise or selling agreement of such dealer at least 180 days before the effective date of the termination, stating the specific ground for such termination. In no event shall the contractual term of any such franchise or selling agreement expire, without the written consent of the dealer involved, prior to the expiration of at least 180 days following such written notice. During the 180-day period, either party may, in appropriate circumstances, petition a court of competent jurisdiction to modify such 180-day stay or to extend it pending a final determination of such proceeding on the merits. The court shall have authority to grant temporary, preliminary, and final injunctive relief. Should a dealer cure the claimed deficiency within the 180-day period, the franchise or selling agreement shall not be terminated.
2. As used in this subparagraph, tests for determining what constitutes due cause for a manufacturer or distributor to terminate a franchise agreement include whether the dealer:
a. Has transferred an ownership interest in the dealership without the manufacturer’s or distributor’s consent;
b. Has made a material misrepresentation in applying for or in acting under the franchise agreement;
c. Has filed a voluntary petition in bankruptcy or has had an involuntary petition in bankruptcy filed against her or him which has not been discharged within 60 days after the filing, is in default under the provisions of a security agreement in effect with the manufacturer or distributor, or is in receivership;
d. Has engaged in unfair business or trade practices;
e. Has inadequately represented the manufacturer’s or distributor’s products with respect to sales, service, or warranty work;
f. Has inadequate and insufficient sales and service facilities and personnel;
g. Has failed to comply with an applicable federal, state, or local licensing law;
h. Has been convicted of a crime, the effect of which would be detrimental to the manufacturer, distributor, or dealership;
i. Has failed to operate in the normal course of business for 10 consecutive business days or has terminated her or his business;
j. Has relocated her or his place of business without the manufacturer’s or distributor’s consent; or
k. Has failed to comply with the terms that are not in conflict with this chapter or the terms of the dealership or franchise agreement.
3. Before termination of the franchise or selling agreement because of the dealer’s failure to meet marketing criteria or market penetration, the manufacturer, factory branch or division, distributor, distributor branch or division, wholesaler, or wholesale branch or division, or officer, agent, or other representative thereof, shall provide written notice of such intention at least 1 year in advance. After such notice, the manufacturer or other entity issuing the notice shall make good faith efforts to work with the dealer to gain the desired market share, including, without limitation, reasonably making available to the dealer an adequate inventory of new equipment and parts and competitive marketing programs. The manufacturer or other entity, at the end of the 1-year notice period, may terminate or elect not to renew the agreement only upon further written notice specifying the reasons for determining that the dealer failed to meet reasonable marketing criteria or market penetration. Such written notice must specify that termination is effective 90 days from the date of the notice. Either party may petition the court pursuant to subparagraph 1. for the relief specified in such subparagraph. Should a dealer cure the claimed deficiency within the 90-day period, the franchise or selling agreement shall not be terminated.
(d) To resort to or use any false or misleading advertisement in connection with its business as such manufacturer, factory branch or division, distributor, distributor branch or division, wholesaler, or wholesale branch or division, or officer, agent, or other representative thereof.
(e) To offer to sell or to sell any new equipment, or parts or accessories therefor, to any other dealer at a lower actual price therefor than the actual price offered to any other dealer for the same model equipment identically equipped or to utilize any device, including, but not limited to, sales promotion plans or programs, which results in such lesser actual price or results in a fixed price predetermined solely by the manufacturer or distributor. However, the provisions of this paragraph do not apply to sales to a dealer for resale to any unit or agency of the United States Government, the state or any of its political subdivisions, or any municipality located within this state. Further, the provisions of this paragraph do not apply so long as a manufacturer, distributor, or wholesaler, or any agent thereof, sells or offers to sell such new equipment, parts, or accessories to all of its franchised dealers at an equal price.
(f) To willfully discriminate, either directly or indirectly, in price, programs, or terms of sale offered to franchisees, when the effect of such discrimination may be to substantially lessen competition or to give to one holder of a franchise any economic, business, or competitive advantage not offered to all holders of the same or similar franchise.
(g) To prevent or attempt to prevent, by contract or otherwise, any dealer from changing the capital structure of her or his dealership or the means by or through which the dealer finances the operation of her or his dealership, provided the dealer at all times meets any reasonable capital standards agreed to between the dealership and the manufacturer, distributor, or wholesaler and provided such change by the dealer does not result in a change in the executive management of the dealership.
(h) To prevent or attempt to prevent, by contract or otherwise, any dealer or any officer, member partner, or stockholder of any dealer from selling or transferring any part of the interest of any of them to any other person or persons or party or parties. However, no dealer, officer, partner, or stockholder has the right to sell, transfer, or assign the franchise or power of management or control thereunder without the written consent of the manufacturer, distributor, or wholesaler, except that such consent may not be unreasonably withheld.
(i) To impose, directly or indirectly, unreasonable restrictions on the dealer relative to transfer, renewal, termination, location, or site control.
(j) To prevent a dealer from having an investment in or holding a dealership contract for the sale of competing product lines or makes of equipment, or to require a dealer to provide separate facilities for competing product lines or makes of equipment.
(k) To obtain money, goods, services, anything of value, or any other benefit from any other person with whom the dealer does business or employs on account of or in relation to the transactions between the dealer, the franchisor, and such other person.
(4) It is deemed a violation of this section for a dealer:
(a) To require a retail purchaser of new equipment, as a condition of sale and delivery of the equipment, also to purchase special features, appliances, equipment, parts, or accessories not desired or requested by the purchaser. However, this prohibition does not apply to special features, appliances, equipment, parts, or accessories which are already installed when the equipment is received by the dealer from the manufacturer, distributor, or wholesaler of such equipment.
(b) To represent and sell as new and unused any equipment which has been used and operated for demonstration or other purposes without stating to the purchaser prior to the sale the approximate amount of use the equipment has experienced or undergone.
(c) To resort to or use any false or misleading advertisement in connection with her or his business as such dealer.