South Carolina Code 39-6-70. Manufacturer prohibited from owning or competing with dealerships; exceptions
(a) own, operate, or control or to participate in the ownership, operation, or control of a new equipment dealer in this State;
Terms Used In South Carolina Code 39-6-70
- Contract: A legal written agreement that becomes binding when signed.
- Dealership: means the business of selling or attempting to effect the sale by a dealer of new equipment, or the right, whether by written or oral arrangement with a manufacturer, distributor, or wholesaler for a definite or indefinite period of time, to sell or attempt to effect the sale of new equipment. See South Carolina Code 39-6-20
- Dealership agreement: means an oral or written arrangement for a definite or indefinite period in which a manufacturer, distributor, or wholesaler grants to an equipment dealer a license to use a trade name, service mark, or related characteristic, and in which there is a community of interest in the marketing of equipment or services related to it at wholesale, retail, leasing, or otherwise. See South Carolina Code 39-6-20
- Distributor: means a person who sells or distributes new equipment to equipment dealers or who maintains distributor representatives within the State. See South Carolina Code 39-6-20
- Equipment: means machinery, implements, or mechanical devices or apparatuses used in farming, construction, or industry and any outdoor power equipment, but not including:
(a) motor vehicles required to be registered pursuant to § 56-3-110;
(b) motorcycles as defined in § 56-16-10;
(c) outdoor power equipment whose primary source of power is a two-cycle or electric motor;
(d) "all terrain vehicles" or "ATVs" that are three-and-four-wheeled motorized vehicles, generally characterized by large, low-pressure tires, a seat designed to be straddled by the operator and handlebars for steering, which are intended for off-road use by an individual rider on various types of nonpaved terrain;
(e) cranes; or
(f) pneumatic tires, tubes, and flaps and related products and components associated with tires, including tires used in farm, construction, industrial, outdoor power, mining, and other on-and-off road applications. See South Carolina Code 39-6-20 - equipment dealer: means a person who sells or attempts to effect the sale of equipment, but not including a:
(a) distributor or wholesaler;
(b) receiver, trustee, administrator, executor, guardian, or other person appointed by or acting pursuant to the judgment or order of a court;
(c) public officer while performing his official duties;
(d) person disposing of equipment acquired for his own use and used in good faith, not for the purpose of avoiding the law;
(e) finance company or other financial institution that sells repossessed equipment;
(f) single line dealer primarily engaged in the retail sale and service of off-road construction and earth-moving equipment. See South Carolina Code 39-6-20 - Manufacturer: means a person engaged in the business of manufacturing or assembling new and unused equipment. See South Carolina Code 39-6-20
- New equipment: means equipment that has not been sold previously to a person other than a distributor or wholesaler or equipment dealer for resale. See South Carolina Code 39-6-20
- Person: means a natural person, corporation, partnership, trust, or other entity, including any other entity in which it has a majority interest or of which it has control, as well as the individual officers, directors, and other persons in active control of the activities of each entity. See South Carolina Code 39-6-20
- Sale: means the issuance, transfer, agreement for transfer, exchange, pledge, hypothecation, or mortgage, whether by transfer in trust or any other form, of any equipment or interest in it or of a dealership agreement or sales agreement related to it, and any option, subscription, or contract, or solicitation, looking to a sale, or offer or attempt to sell, whether spoken or written, or any other form. See South Carolina Code 39-6-20
(b) establish in this State an additional dealer or dealership in which that person or entity has an interest; or
(c) own, operate, or control, directly or indirectly, an interest in a dealer or dealership in this State.
(2) This subsection does not prohibit the making of a loan by a manufacturer, distributor, or wholesaler to any person or entity for the purpose of acquiring a dealer or dealership, nor does it prohibit the ownership, operation, or control of a new equipment dealer by a manufacturer, distributor, or wholesaler:
(a) for a temporary period, not to exceed three years, during the transition from one owner or operator to another;
(b) if a prospective new equipment dealer is not available to own or operate the dealership within a particular geographic market area not serviced by an existing dealer and the manufacturer, distributor, or wholesaler contracts with or employs a third party to open or operate a dealership owned or controlled by the manufacturer, distributor, or wholesaler pursuant to a bona fide written agreement or plan giving a third party ownership of the new equipment dealer or dealership over time;
(c) during the period the new equipment dealer is being sold pursuant to a bona fide contract, shareholder agreement, or purchase option to the operator of the dealership; or
(d) if the manufacturer, distributor, or wholesaler is an owner, operator, or controller as of January 1, 2000, of a dealership that has been engaged in the retail sale of equipment within the same geographical market area for a continuous two-year period of time immediately before January 1, 2000, and a prospective new equipment dealer is not available to own or operate the dealership in a manner consistent with the public interest.
(B) It is unlawful for a manufacturer, distributor, or wholesaler or any parent, affiliate, wholly or partially owned subsidiary, officer, or representative of a manufacturer, distributor, or wholesaler to compete unfairly with a new equipment dealer of the same product line or make of new equipment operating pursuant to a dealership agreement or sales agreement in this State. Except as otherwise provided in this section, the mere ownership, operation, or control of a new equipment dealer by a manufacturer, distributor, or wholesaler is not a violation of this section.