Rhode Island General Laws 6-46-4. Supplier’s duty to repurchase inventory
(a) Whenever a dealer enters into a dealer agreement under which the dealer agrees to maintain an inventory, and the agreement is terminated by either party as provided in this chapter, the supplier, upon written request of the dealer filed within thirty (30) days of the effective date of the termination, shall repurchase the dealer’s inventory as provided in this chapter. There shall be no requirement for the supplier to repurchase inventory pursuant to this section if:
(1) The dealer has made an intentional and material misrepresentation as to the dealer’s financial status;
(2) The dealer has defaulted under the chattel mortgage or other security agreement between the dealer and supplier; or
(3) The dealer has filed a voluntary petition in bankruptcy.
Terms Used In Rhode Island General Laws 6-46-4
- Agreement: means a written contractual agreement between the merchant and the third-party delivery service. See Rhode Island General Laws 6-58-1
- 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.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Guardian: A person legally empowered and charged with the duty of taking care of and managing the property of another person who because of age, intellect, or health, is incapable of managing his (her) own affairs.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- person: may be construed to extend to and include co-partnerships and bodies corporate and politic. See Rhode Island General Laws 43-3-6
(b) Whenever a dealer enters into a dealer agreement in which the dealer agrees to maintain an inventory and the dealer or the majority stockholder of the dealer, if the dealer is a corporation, dies, or becomes incompetent, the supplier shall, at the option of the heir, personal representative, guardian of the dealer, or the person who succeeds to the stock of the majority stockholder, repurchase the inventory as if the agreement had been terminated. The heir, personal representative, guardian, or succeeding stockholder has six (6) months from the date of the death of the dealer or majority stockholder to exercise the option under this chapter.
History of Section.
P.L. 1998, ch. 408, § 1; P.L. 2014, ch. 528, § 33.