Okla. Stat. tit. 47 § 596.5

Current through Laws 2024, c. 453.

Section 596.5 - Manufacturer termination of dealer agreement - Good cause - Notice - Repurchase of inventory

A. A manufacturer, directly or through any officer, agent, or employee, may terminate or not renew a dealer agreement without good cause. If the manufacturer terminates or does not renew the dealer agreement without good cause, the manufacturer shall comply with the provisions of subsections D and E of this section. If the manufacturer terminates or does not renew the dealer agreement with good cause, the provisions of subsections D and E of this section shall not apply.

B. A manufacturer has the burden of showing good cause for terminating or not renewing a dealer agreement. All of the following factors shall be considered in determining whether there is good cause for a proposed termination or nonrenewal of a dealer agreement by a manufacturer:

1. The extent of the penetration of the dealer in the relevant market area;

2. The extent and quality of the service of the dealer under recreational vehicle warranties;

3. The nature and extent of the investment of the dealer in business of the dealer;

4. The adequacy of the service facilities, equipment, parts, supplies, and personnel of the dealer;

5. The effect of the proposed action on the community;

6. Whether the dealer fails to follow agreed-upon procedures or standards related to the overall operation of the dealership; and

7. The performance by the dealer under the terms of dealer agreement.

C. Except as otherwise provided in this section, a manufacturer shall provide a dealer with written notice of a termination or nonrenewal of a dealer agreement. All of the following conditions apply to a notice described in this subsection:

1. Except as provided in paragraph 4 or 5 of this subsection, the manufacturer shall provide written notice at least ninety (90) days before the effective date of the termination or nonrenewal of the dealer agreement;

2. The notice shall state all of the reasons for the termination or nonrenewal of the dealer agreement;

3. The notice shall state that if the dealer provides to the manufacturer a written notification of the intent of the dealer to cure all claimed deficiencies within thirty (30) days after the dealer receives the notice, the dealer shall have one hundred twenty (120) days after the date of the notice to correct the claimed deficiencies. If all of the deficiencies are corrected within the one-hundred-twenty-day time period, the notice shall be deemed void and the manufacturer shall not terminate or not renew the dealer agreement because of the claimed deficiencies stated in the notice. If the dealer does not provide a notification of intent to cure deficiencies within the thirty-day time period, the termination or nonrenewal of the dealer agreement shall take effect sixty (60) days after the dealer received the notice from the manufacturer;

4. A manufacturer may reduce the notice period described in paragraph 1 of this subsection from ninety (90) days to thirty (30) days and shall not be required to allow the dealer an opportunity to correct the deficiencies if the grounds for termination or nonrenewal of the dealer agreement by the manufacturer are any of the specific categories of good cause described in subsection F of this section; and

5. A manufacturer shall not be required to provide notice or an opportunity to correct deficiencies under this subsection if the grounds for termination or nonrenewal of the dealer agreement by the manufacturer includes one of the following:

a. the dealer becomes insolvent,

b. the dealer is bankrupt, or

c. the dealer makes an assignment for the benefit of creditors.

D. If a manufacturer terminates or does not renew a dealer agreement for good cause under this section, the dealer, at its option, may require the manufacturer to repurchase any of the following from the dealer:

1. All new, untitled recreational vehicles that were acquired from the manufacturer within eighteen (18) months before the effective date of the notice of termination of the dealer agreement that have not been used, except for demonstration purposes and have not been altered or damaged, may be repurchased at one hundred percent (100%) of the net invoice cost of the recreational vehicles, including transportation, less applicable rebates and discounts to the dealer;

2. All current and undamaged accessories and proprietary parts sold to the dealer for resale within the eighteen (18) months prior to the effective date of the termination of the dealer agreement that are accompanied by the original invoice may be repurchased at one hundred five percent (105%) of the original net price paid to the manufacturer to compensate the dealer for handling, packing, and shipping the accessories and parts; and

3. Any properly functioning diagnostic equipment, special tools, current signage, and other equipment and machinery, purchased by the dealer within the five (5) years prior to the effective date of the termination of the dealer agreement at the request of the manufacturer, if the equipment or machinery cannot be used in the normal course of the ongoing business of the dealer, may be repurchased at one hundred percent (100%) of the net cost of the dealer, plus freight, destination, delivery, and distribution charges and sales taxes.

E. The dealer shall promptly return or arrange for the return of all of the items the manufacturer is required to repurchase under subsection D of this section at the expense of the manufacturer.

F. As used in this section, "good cause" includes, but is not limited to, any of the following:

1. A conviction of a felony or a plea of guilty or nolo contendere to a felony by a dealer or an owner of a dealership of a crime that was committed during the time frame of the current dealer agreement; provided, there is full disclosure, in writing, of any felony conviction or plea of guilty or nolo contendere to any such felony crime that occurred within ten (10) years of entering into the dealer agreement;

2. Abandonment or permanent closing of the business operations of a dealer for twenty-one (21) consecutive business days without contacting the manufacturer prior to the closing unless the closing is due to an act of God, strike, labor difficulty, or other cause over which the dealer has no control;

3. A material misrepresentation to a manufacturer by a dealer that severely affects the business relationship between the dealer and the manufacturer;

4. Suspension or revocation of the license of a dealer or refusal to renew the license of the dealer by the Oklahoma New Motor Vehicle Commission;

5. A material violation of any of the provisions of the Recreational Vehicle Franchise Act by a dealer; or

6. The dealer becomes insolvent, is bankrupt, or makes an assignment for the benefit of creditors.

Okla. Stat. tit. 47, § 596.5

Amended by Laws 2023 , c. 29, s. 24, eff. 11/1/2023.

Added by Laws 2011 , SB 902, c. 272, § 7, eff. 1/1/2012.