Texas House Bill HB4810

Texas 2023 - 88th Regular

• Filed: 3/10/23

Caption

Relating to transactions involving dealer agreements under the Fair Practices of Equipment Manufacturers, Distributors, Wholesalers, and Dealers Act

Impact

The bill is expected to significantly impact existing state laws governing dealer agreements, ensuring that suppliers cannot terminate agreements without just cause and must adhere to predefined compensation structures when terminating. For instance, the bill mandates that suppliers repurchase equipment, repair parts, and other products based on certain conditions and at specified rates. This statutory obligation aims to protect dealers from potential losses associated with sudden terminations of agreements and ensures they are compensated adequately for any inventory they hold at the time of termination.

Summary

House Bill 4810, also known as the Fair Practices of Equipment Manufacturers, Distributors, Wholesalers, and Dealers Act, aims to regulate transactions involving dealer agreements in Texas. The bill establishes clearer definitions and rights for dealers, suppliers, and terms of dealer agreements, thereby enhancing protections for dealers against arbitrary actions by suppliers. It particularly focuses on warranty claims and conditions under which suppliers must repurchase inventory from dealers following contract termination. The changes are designed to promote fairness and transparency in the equipment sales and servicing industry.

Sentiment

The sentiment surrounding HB 4810 appears to be generally positive among supporters who see it as a necessary measure to protect small businesses against the overwhelming power of larger suppliers. Proponents argue that it levels the playing field and fosters a competitive environment in the market. Some industry representatives and organizations express concerns about how enforcement will be managed and whether the provisions will fully address the challenges faced by dealers when negotiating with larger suppliers.

Contention

Notable points of contention in discussions surrounding HB 4810 include concerns regarding the balance between protecting dealer rights and the potential for imposing burdens on suppliers, which some stakeholders argue may lead to higher costs for consumers. Further deliberations involve the practical implementation of the bill's provisions, as the definitions established for key terms are critical to how effectively the bill will function. Stakeholders are also interested in ensuring that regulatory oversight does not stifle competition in the market.

Texas Constitutional Statutes Affected

Business And Commerce Code

• Chapter 4. Bank Deposits And Collections
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