The original instrument was prepared by Michelle Ducharme. The following digest,
which does not constitute a part of the legislative instrument, was prepared by Ann
S. Brown.
DIGEST
SB 263 Reengrossed 2015 Regular Session Thompson
Present law provides for the repurchase of farm, industrial, and lawn and garden equipment by a
wholesaler.
Present law applies to written contracts or oral agreements of definite or indefinite duration between
any person, firm, or corporation engaged in the business of selling, distributing or retailing farm,
construction, heavy industrial material handling, utility and lawn and garden equipment, engines,
implements, machinery, attachments and repair parts for such equipment and any wholesaler,
manufacturer or distributor of such equipment and repair parts, whereby the retailer agrees with the
wholesaler, manufacturer or distributor to maintain a stock of such parts, or complete equipment or
machines, or attachments. Any successor in interest of the manufacturer, wholesaler, or distributor
shall include any purchaser of assets or stock, any surviving corporation resulting from merger or
liquidation, any receiver or assignee, or any trustee of the original equipment manufacturer,
wholesaler or distributor.
Proposed law provides that the provisions of present law shall apply to forestry contracts or
agreements.
Present law defines certain terms and phrases.
Proposed law defines "forestry equipment" and "dealer agreement" and includes forestry equipment
dealer in the definition of "dealer".
Proposed law provides that dealers have a choice of remedy. The remedies provided by law are in
addition and supplemental to remedies provided in any dealer agreement. A dealer may elect to
pursue its contract remedy, the remedies provided by law, or both.
Proposed law provides that an election by the dealer to pursue remedies as provided in the dealer
agreement shall not preclude or prohibit the dealer from exercising his rights to any other remedies
provided by law.
Proposed law provides that any provision included in an agreement between an agent and a dealer
that attempts to limit or otherwise preclude or prohibit a dealer from exercising any rights or
protections provided by law shall be null, void, and unenforceable.
Present law provides that no agent may terminate, cancel, fail to renew, or substantially change the
competitive circumstances of a dealership agreement or contract without good cause. Proposed law retains present law and adds that in addition to good cause an agent must have failed
to act in good faith in order to terminate, cancel, fail to renew, or substantially change an agreement
or contract.
Proposed law provides that an agent shall bear the burden of proof that it has acted in good faith and
that there was good cause for the termination or cancellation of any dealership agreement or contract.
Present law provides that good cause exists whenever:
(1)An individual proprietor, partner, or major shareholder of the dealership has withdrawn.
(2)There has been a substantial reduction in interest of a substantial partner or major
stockholder.
(3)The dealer has filed or had filed against it a petition in bankruptcy that has not been
discharged within 60 days after the filing, has been sold a substantial part of the dealer's
assets related to the equipment business, or has commenced dissolution or liquidation.
(4)The dealer has changed its principal place of business without prior approval of the agent,
which shall not be unreasonably withheld.
(5)The equipment dealer has substantially defaulted under chattel mortgage or other security
agreement between the dealer and the agent, or there has been a revocation or discontinuance
of a guarantee of a present or future obligation to the agent.
(6)The equipment dealer has failed to operate in the normal course of business for 14 days.
(7)The dealer has pleaded guilty to or has been convicted of a felony substantially affecting the
relationship between the dealer and the agent.
(8)The dealer has engaged in conduct which is substantially injurious or detrimental to the
dealer's customers or to the public.
(9)After receiving at least 12 months' notice from the agent of its specific and achievable
requirements for reasonable market penetration based on the agent's contemporaneous
experience in other comparable marketing areas, the dealer has consistently failed to meet
the agent's reasonable market penetration requirements.
Proposed law provides that good cause exists whenever:
(1)An individual proprietor, partner, or major shareholder who owns more than 25% of the
dealership has withdrawn from the dealership, and a replacement from the withdrawing
individual proprietor, partner, or major shareholder, who meets the qualifying criteria
typically applied by the agent, has not previously been identified or is not identified within
a reasonable time frame. (2)There has been a substantial reduction in interest of a substantial partner or major
stockholder, and such interest is not being transferred to one or more replacement partners
or major shareholders.
(3)The dealer has filed or had filed against it a petition in bankruptcy that has not been
discharged within 60 days after the filing, has sold a substantial part of the dealer's assets
related to the equipment business outside of the ordinary course of business, or has
commenced dissolution or liquidation.
(4)The dealer has changed its principal place of business without prior approval of the agent,
which shall not be unreasonably withheld.
(5)Except as due to force majeure, the equipment dealer has failed to operate in the normal
course of business for 14 days.
(6)The dealer has pleaded guilty to or has been convicted of a felony substantially affecting the
relationship between the dealer and the agent.
(7)The dealer has engaged in conduct which is substantially injurious or detrimental to the
dealer's customers or to the public.
(8)The dealer has substantially defaulted under chattel mortgage or other security agreement
between the dealer and the agent, or there has been a revocation or discontinuance of a
guarantee of a present or future obligation to the agent.
(9)After receiving at least 12 months' notice from the agent of its specific and achievable
requirements for reasonable market penetration based on the performance standards that are
applied uniformly to similarly situated dealers, the dealer has consistently failed to use
commercially reasonable efforts to meet the agent's reasonable market penetration
requirements and the agent can demonstrate that the dealer's failure is a result of the dealer's
sole efforts or lack of efforts in its markets and not a result of the agent's efforts or lack of
efforts in the market. However, good cause shall not exist if in the dealer's market share
penetration meets or exceeds 80% of the agent's North American average in the 24 months
immediately preceding the agent's attempt to terminate, cancel, fail to renew, or substantially
change the competitive circumstances of a dealership agreement or contract.
Present law provides the procedure by which an agent may terminate, cancel, or fail to renew a
dealership agreement.
Proposed law provides except as otherwise provided by law, an agent shall provide a dealer with at
least 90 days' written notice of termination, cancellation, or nonrenewal of the dealership agreement.
The notice shall state all reasons constituting good cause for the action and shall provide that the
dealer has 60 days in which to cure any claimed deficiency, specifying the action that must be taken
in order to cure the deficiency. If the deficiency is rectified within 60 days, the notice is void.
Except as otherwise provided by law, the notice and the right to cure provisions are not required if the reason for termination, cancellation, or nonrenewal is a violation of certain provisions of law.
Proposed law provides that notwithstanding the terms of any dealer agreement, each agent shall
indemnify and hold harmless its dealers against any judgment for damages, including but not limited
to court costs and reasonable attorney fees of the dealer, arising out of complaints, claims or
lawsuits, including but not limited to strict liability, negligence, misrepresentation, express or
implied warranty, or rescission of sale, if the judgment arises out of an alleged defective or negligent
manufacture, assembly, design, or modifications or alterations made by dealer, who was authorized
by an agent to make such modifications or alterations, of farm equipment, construction equipment,
forestry equipment, material handling equipment, utility equipment, lawn and garden equipment,
parts, attachments, or accessories, or other functions by the agent, which are beyond the control of
the dealer.
Proposed law provides that in no event shall a dealer be liable for the gross negligence or willful
misconduct of any third party.
Proposed law provisions shall not apply to any contractual provisions in effect on the effective date
of this Act, but shall apply to subsequent amendments and modifications of the contract made after
such date.
Effective August 1, 2015.
(Amends R.S. 51:481(A) and (B)(1) and (3), and 482; adds R.S. 51:481(B)(5), 481.1, 483.1, and
490.1)
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Agriculture, Forestry,
Aquaculture, and Rural Development to the original bill
1. Technical amendments only.
Senate Floor Amendments to engrossed bill
1. Makes technical amendments.
2. Clarifies the provision relative to terminations or cancellations of an agreement or
contract when one fails to act in good faith.
3. Specifies which agreements or contacts are subject to the provisions of this Act.