Except as provided in §§ 57-5-505 and 57-5-506, a supplier may not amend, modify, terminate, cancel, discontinue or refuse to renew an agreement with a wholesaler, or cause a wholesaler to resign from an agreement, unless the supplier has complied with the following requirements:

(1) The supplier shall give written notice to the wholesaler, as provided in § 57-5-508, not less than ninety (90) days prior to the effective date of the amendment, modification, termination, cancellation, discontinuance or nonrenewal;

Terms Used In Tennessee Code 57-5-507

  • Agreement: means any agreement between a wholesaler and a supplier, oral or written, whereby a wholesaler is granted the right to purchase and sell a brand or brands of beer with an alcoholic content of five percent (5%) by weight or less sold by a supplier. See Tennessee Code 57-5-502
  • Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
  • Good faith: means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade, as defined in and interpreted under §. See Tennessee Code 57-5-502
  • Supplier: means a manufacturer or importer of beer. See Tennessee Code 57-5-502
  • Wholesaler: means a person or entity that sells beer to retailers, but does not include any manufacturer authorized to sell directly to retailers pursuant to §. See Tennessee Code 57-5-502
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(2) The supplier acts in good faith. The supplier shall have the burden of proving that it acted in good faith;
(3) The supplier has good cause. In any action challenging the supplier’s action under this section, the supplier shall have the burden of proving that it has good cause. Good cause exists when all of the following have occurred:

(A) The wholesaler has failed to comply substantially with essential and reasonable requirements imposed upon the wholesaler by the agreement, if such requirements are not discriminatory, either by their terms or in the methods of their enforcement, as compared with requirements imposed on other wholesalers in Tennessee or adjoining states and if such requirements are not in violation of any law or regulation;
(B) The supplier first acquired knowledge of the failure described in subdivision (3)(A) not more than twenty-four (24) months before the date notification was given pursuant to this section;
(C) The supplier has given written notice to the wholesaler, stating specifically the manner in which the wholesaler has failed to comply with the agreement; and
(D) The wholesaler was given adequate opportunity to use good faith efforts to correct the failure to comply with the agreement. Adequate opportunity shall be thirty (30) days to submit a plan of corrective action to comply with the agreement and an additional ninety (90) days after the thirty-day period to correct the failure in accordance with the plan.
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