South Carolina Code 39-6-60. Notification of cancellation or nonrenewal; petition to modify notice period; grounds for immediate termination
(B) The manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division, or officer, agent, or other representative of it shall notify an equipment dealer in writing at least one hundred eighty days before the contractual term of his dealership agreement or selling agreement expires that the agreement will not be renewed, stating the specific grounds for the nonrenewal in those cases where there is no intention to renew. The contractual term of a dealership agreement or selling agreement may not expire, without the written consent of the equipment dealer involved, before the expiration of at least one hundred eighty days following the written notice.
Terms Used In South Carolina Code 39-6-60
- Appeal: A request made after a trial, asking another court (usually the court of appeals) to decide whether the trial was conducted properly. To make such a request is "to appeal" or "to take an appeal." One who appeals is called the appellant.
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- 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
- Distributor branch: means a branch office maintained by a distributor that sells or distributes new equipment to equipment dealers. 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 - Factory branch: means a branch office maintained by a manufacturer that makes or assembles equipment for sale to distributors or equipment dealers or that is maintained for directing and supervising the representatives of the manufacturer. 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
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- 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
(C) During the one hundred eighty-day period, either party may petition a court to modify the one hundred eighty-day stay or to extend it pending a final determination of the proceedings on the merits. The court may grant preliminary and final injunctive relief pursuant to the Rules of Civil Procedure.
(D) Before termination or nonrenewal of the dealership agreement or selling agreement because of the dealer’s failure to meet reasonable marketing criteria or market penetration, the manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division, shall provide written notice of the intention at least one year in advance. After the notice, the manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division shall provide fair and reasonable efforts to work with the equipment dealer to gain the desired market share including, without limitation, reasonably making available to the dealer an adequate inventory of new equipment and parts and competitive marketing programs. The manufacturer, distributor, factory branch or division, or wholesale branch or division, at the end of the one-year notice period, may terminate or elect not to renew the agreement only upon written notice specifying the reasons for determining that the dealer failed to meet reasonable criteria or market penetration. This written notice must specify that termination or nonrenewal is effective one hundred eighty days from the date of the notice. Either party may petition the court pursuant to subsection (C).
(E) Immediate notice of termination without an opportunity to cure is considered reasonable if, during the agreement term, the equipment dealer:
(1) is declared bankrupt or is determined judicially to be insolvent, assigns all or a substantial part of his assets to or for the benefit of a creditor, or admits his inability to pay his debts as they come due;
(2) abandons the dealership agreement or sales agreement by failing to operate the business for five consecutive days that the equipment dealer is required to operate the business pursuant to the terms of the dealership agreement or sales agreement, or any shorter period after which it is reasonable under the facts and circumstances for the manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division to conclude that the equipment dealer does not intend to continue to operate pursuant to the dealership agreement or sales agreement, unless the failure to operate is due to fire, flood, earthquake, or other similar causes beyond the equipment dealer’s control;
(3) agrees in writing with the manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division to terminate the dealership agreement or sales agreement;
(4) makes a misrepresentation material to the acquisition of the dealership agreement or sales agreement or engages in conduct that reflects materially and unfavorably upon the reputation of the business of the manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division;
(5) fails to comply with a federal, state, or local law or regulation applicable to the operation of his business for a period of ten days after notification of noncompliance;
(6) has his business or business premises seized, taken over, or foreclosed by a government official in the exercise of his duties or by a creditor, lienholder, or lessor, and a final judgment against the dealer remains unsatisfied for thirty days absent a filing of a supersedeas or other appeal bond, or a levy of execution is made upon a license granted by the dealership agreement or sales agreement and it is not discharged within five days of the levy;
(7) makes a material misrepresentation or falsification of a record;
(8) pleads guilty to or is convicted of a felony;
(9) transfers a controlling ownership interest in the dealership without the manufacturer’s consent, except that the manufacturer may not withhold consent unfairly or unreasonably;
(10) relocates or establishes a new or additional dealer location without the supplier’s consent;
(11) fails to satisfy a payment obligation as it comes due and payable to the manufacturer; or
(12) fails to account promptly to the manufacturer for proceeds from the sale of equipment or to hold those proceeds in trust for the manufacturer’s benefit.