Iowa Code 322C.14 – Manufacturer-dealer agreement — termination, cancellation, nonrenewal, or alteration by manufacturer or distributor
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1. Notwithstanding section 322C.3, subsection 5, a manufacturer or distributor may, either directly or through any authorized officer, agent, or employee, terminate, cancel, or fail to renew a manufacturer-dealer agreement with or without good cause. If the manufacturer or distributor terminates, cancels, or fails to renew a manufacturer-dealer agreement without good cause, the manufacturer or distributor shall comply with the repurchase requirements set forth in section 322C.16.
Terms Used In Iowa Code 322C.14
- 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.
- Community: means a towable recreational vehicle dealer's area of responsibility as stipulated in the manufacturer-dealer agreement. See Iowa Code 322C.2
- Days: means calendar days. See Iowa Code 322G.2
- dealer: means a person required to be licensed under this chapter who is authorized to sell and service towable recreational vehicles. See Iowa Code 322C.2
- Distributor: means a person, resident or nonresident, who sells or distributes all-terrain vehicles to all-terrain vehicle dealers in this state or who maintains distributor representatives. See Iowa Code 321I.1
- Distributor: means a person who sells or distributes towable recreational vehicles to towable recreational vehicle dealers either directly or through a representative employed by a distributor. See Iowa Code 322C.2
- following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
- Manufacturer: means a person engaged in the business of constructing or assembling all-terrain vehicles required to be registered under this chapter and who has an established place of business for that purpose in this state. See Iowa Code 321I.1
- Manufacturer: means a person engaged in the manufacture of towable recreational vehicles. See Iowa Code 322C.2
- Manufacturer-dealer agreement: means a written agreement or contract entered into between a manufacturer or distributor and a towable recreational vehicle dealer that specifies the rights and responsibilities of the parties and authorizes the dealer to sell and service new towable recreational vehicles. See Iowa Code 322C.2
- Nolo contendere: No contest-has the same effect as a plea of guilty, as far as the criminal sentence is concerned, but may not be considered as an admission of guilt for any other purpose.
- Plea: In a criminal case, the defendant's statement pleading "guilty" or "not guilty" in answer to the charges, a declaration made in open court.
- state: when applied to the different parts of the United States, includes the District of Columbia and the territories, and the words "United States" may include the said district and territories. See Iowa Code 4.1
2. A manufacturer or distributor shall have the burden of proof to demonstrate good cause for terminating, canceling, or failing to renew a manufacturer-dealer agreement. For purposes of determining whether good cause exists for the manufacturer’s or distributor’s termination, cancellation, or failure to renew a manufacturer-dealer agreement, any of the following factors may be considered:
a. The extent of the dealer‘s presence in the community.
b. The nature and extent of the dealer’s investment in the dealer’s business.
c. The adequacy of the dealer’s service facilities, equipment, parts, supplies, and personnel.
d. The effect that the proposed termination, cancellation, or nonrenewal of the manufacturer-dealer agreement would have on the community.
e. The extent and quality of the dealer’s service under the warranties of the towable recreational vehicles sold by the dealer.
f. The dealer’s failure to follow procedures or standards related to the overall operation of the dealership that were agreed to by the dealer.
g. The dealer’s performance under the terms of the manufacturer-dealer agreement.
3. a. Except as otherwise provided in this subsection or subsection 4, a manufacturer or distributor shall provide to a dealer written notice of termination, cancellation, or nonrenewal of a manufacturer-dealer agreement for good cause at least ninety days prior to terminating, canceling, or failing to renew the manufacturer-dealer agreement.
b. (1) The notice shall state all of the reasons for the termination, cancellation, or nonrenewal and shall further state that if, within thirty 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 shall then have ninety days following receipt of the notice to cure the deficiencies.
(2) If the deficiencies are cured within ninety days, the manufacturer’s or distributor’s notice is voided. If the dealer fails to provide the notice of intent to cure the deficiencies within thirty days, or fails to cure the deficiencies within ninety days, the termination, cancellation, or nonrenewal takes effect as provided in the original notice. If the dealer has possession of new and untitled inventory, the inventory may be sold pursuant to section 322C.16.
c. The notice period for termination, cancellation, or nonrenewal of a manufacturer-dealer agreement for good cause may be reduced to thirty days if the grounds for termination, cancellation, or nonrenewal are due to any of the following factors:
(1) The dealer or one of the dealer’s owners has been convicted of, or has entered a plea of guilty or nolo contendere to, a felony.
(2) The dealer has abandoned or closed the dealer’s business operations for ten consecutive business days. This subparagraph does not apply if the closing is due to a normal seasonal closing and the dealer notifies the manufacturer or distributor of the planned closing, or is due to an act of God, a strike, a labor difficulty, or any other cause over which the dealer has no control.
(3) The dealer has made a significant misrepresentation that materially affects the business relationship of the manufacturer or distributor and the dealer.
(4) The dealer’s license has been suspended, revoked, denied, or has not been renewed by the department.
(5) The dealer has committed a material violation of this chapter which is not cured within thirty days after receipt of written notice of the violation.
4. Subsection 3 does not apply if the manufacturer or distributor terminates, cancels, or fails to renew the manufacturer-dealer agreement because the dealer is insolvent, or has filed for bankruptcy, receivership, or assignment for the benefit of creditors.