H*3376 Session 105 (1983-1984)
H*3376(Rat #0358, Act #0326 of 1984) General Bill, By
House Agriculture and Natural Resources
Similar(S 736)
A Bill to amend the Code of Laws of South Carolina, 1976, by adding Chapter 59
to Title 39, so as to provide for franchise agreements between retailers
engaged in the business of selling and retailing farm implements, machinery,
utility and industrial, and yard and garden equipment, attachments, or repair
parts, and wholesalers, manufacturers, or distributors of the products to
require repurchase of inventory, stock, and equipment from retailers upon
termination of a contract; to provide procedures; to establish limitations,
rights, and civil liability relative to repurchase; to extend the right to
require repurchase option to the heirs of retailers; to provide for warranty
claims, contractual rights, and indemnification, auditing time limits, and
collections.-amended title
01/18/84 House Introduced, read first time, placed on calendar
without reference HJ-529
01/26/84 House Read second time HJ-703
01/27/84 House Read third time and sent to Senate HJ-736
01/31/84 Senate Introduced and read first time SJ-515
01/31/84 Senate Referred to Committee on Agriculture and Natural
Resources SJ-515
02/16/84 Senate Committee report: Favorable with amendment
Agriculture and Natural Resources SJ-668
03/01/84 Senate Amended SJ-876
03/01/84 Senate Read second time SJ-877
03/08/84 Senate Amended SJ-932
03/08/84 Senate Read third time SJ-932
03/08/84 Senate Returned SJ-932
03/27/84 House Concurred in Senate amendment and enrolled HJ-2008
04/05/84 Ratified R 358
04/09/84 Signed By Governor
04/09/84 Effective date 04/09/84
04/09/84 Act No. 326
04/17/84 Copies available
(A326, R358, H3376)
AN ACT TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING CHAPTER 59
TO TITLE 39, SO AS TO PROVIDE FOR FRANCHISE AGREEMENTS BETWEEN RETAILERS ENGAGED
IN THE BUSINESS OF SELLING AND RETAILING FARM IMPLEMENTS, MACHINERY, UTILITY AND
INDUSTRIAL, AND YARD AND GARDEN EQUIPMENT, ATTACHMENTS, OR REPAIR PARTS, AND
WHOLESALERS, MANUFACTURERS, OR DISTRIBUTORS OF THE PRODUCTS TO REQUIRE REPURCHASE
OF INVENTORY, STOCK, AND EQUIPMENT FROM RETAILERS UPON TERMINATION OF A CONTRACT;
TO PROVIDE PROCEDURES; TO ESTABLISH LIMITATIONS, RIGHTS, AND CIVIL LIABILITY
RELATIVE TO REPURCHASE; TO EXTEND THE RIGHT TO REQUIRE REPURCHASE OPTION TO THE
HEIRS OF RETAILERS; TO PROVIDE FOR WARRANTY CLAIMS, CONTRACTUAL RIGHTS, AND
INDEMNIFICATION, AUDITING TIME LIMITS, AND COLLECTIONS.
Be it enacted by the General Assembly of the State of South Carolina:
Franchise agreements
SECTION 1. Title 39 of the 1976 Code is amended by adding:
"Chapter 59
Section 39-59-10. As used in this chapter:
(1) 'Current Model' means a model listed in the wholesaler's, manufacturer's,
or distributor's sales manual or any supplements to the manuals.
(2) 'Current Net Price' means the price listed in the wholesaler's,
manufacturer's, or distributor's current price list or catalog in effect at the
time the contract is cancelled or discontinued, less any applicable trade and
cash discounts.
(3) 'Retailer' means any person engaged in the business of selling and
retailing farm implements, machinery, utility and industrial, and yard and garden
equipment, attachments or repair parts. The term also includes any person
engaged in such business, his heirs, personal representative, or his guardian or
the major stockholder of the business.
(4) 'Inventory' means farm implements, machinery, utility and industrial, and
yard and garden equipment, attachments, or repair parts.
(5) 'Net Cost' means the price the retailer paid for the merchandise to the
wholesaler, manufacturer, or distributor, less all applicable discounts allowed,
plus the freight costs from the wholesaler, manufacturer, or distributor location
to the retailer's location plus reasonable cost to assemble or disassemble.
Section 39-59-20. Whenever any retailer enters into a franchise agreement,
evidenced by a written contract, or oral contract with a wholesaler,
manufacturer, or distributor wherein the retailer agrees to maintain an inventory
and the contract is terminated, the wholesaler, manufacturer, or distributor
shall repurchase the inventory as provided in this chapter. The retailer may
keep the inventory if he desires. If the retailer has any outstanding debts to
the wholesaler, manufacturer, or distributor, then the repurchase amount may be
credited to the retailer's account.
Section 39-59-30. The wholesaler, manufacturer, or distributor shall repurchase
the inventory previously purchased from him and held by the retailer within
ninety days of the date of termination of the contract by either party. The
wholesaler, manufacturer, or distributor shall pay one hundred percent of the net
cost of all new, unsold, undamaged, and complete farm implements, machinery,
utility, and industrial equipment, and attachments, ninety percent of the current
net price of all new, unused, undamaged repair parts, and eighty-five percent of
the new price of superseded parts. The wholesaler, manufacturer, or distributor
shall pay the retailer five percent of the current net price on all new, unused,
and undamaged repair parts returned to cover the cost of handling, packing, and
loading. The wholesaler, manufacturer, or distributor may perform the handling,
packing, and loading in lieu of paying the five percent for the services.
Section 39-59-40. The wholesaler, manufacturer, or distributor shall make
payment of the full repurchase amount to the retailer not later than thirty days
after the receipt of inventory as provided for in Section 39-59-30. Upon payment
of the repurchase amount to the retailer, the title and right of possession to
the repurchased inventory shall transfer to the wholesaler, manufacturer, or
distributor.
Section 39-59-50. The provisions of this chapter do not require the repurchase
from a retailer of:
(1) Any repair part with a limited storage life or otherwise subject to
deterioration, such as gaskets or batteries, but not industrial 'press on' or
industrial pneumatic tires;
(2) Any single repair part which is priced as a set of two or more items;
(3) Any repair part which because of its condition is not resalable as a new
part without repackaging or reconditioning;
(4) Any inventory for which the retailer is unable to furnish evidence,
satisfactory to the wholesaler, manufacturer, or distributor, of clear title,
free and clear of all claims, liens, and encumbrances;
(5) Any inventory which the retailer desires to keep, provided the retailer
has a contractual right to do so;
(6) Any farm implements, machinery, utility, and industrial equipment, and
attachments which are not in new, unused, undamaged, complete condition;
(7) any repair parts which are not in new, unused, undamaged condition;
(8) Any farm implements, machinery, utility, and industrial equipment, yard,
and garden equipment, or attachments which were purchased thirty-six months or
more prior to notice of termination of the contract;
(9) Any inventory which was ordered by the retailer on or after the actual
receipt of the date of notification of termination of the contract;
(10) Any inventory which was acquired by the retailer from any source other
than the wholesaler, manufacturer, or distributor.
Section 39-59-60. If any wholesaler, manufacturer, or distributor fails or
refuses to repurchase any inventory covered under the provisions of this chapter
within the time periods established in Section 39-59-30, he is civilly liable for
one hundred percent of the current net price of the inventory, plus any freight
charges paid by the retailer, the retailer's reasonable attorney's fees, court
costs, and interest on the current net price computed at the legal rate of
interest from the ninety-first day after contract termination.
Section 39-59-70. In the event of the death or incapacity of the retailer or the
majority stockholder of a corporation operating as a retailer, the wholesaler,
manufacturer, or distributor shall repurchase, at the option of the heir or
retailer, as defined in item (3) of Section 39-59-10, the inventory from the heir
or retailer, of the retailer or majority stockholder as if the wholesaler,
manufacturer, or distributor had terminated the contract. The heir or retailer
has one year from the date of the death of the retailer or majority stockholder
to exercise his option under this chapter. Nothing in this chapter requires the
repurchase of any inventory if the heir or retailer and wholesaler, manufacturer,
or distributor enter into a new contract to operate the retail dealership.
Section 39-59-80. The provision of this chapter may not be construed to affect
in any way any security interest which the wholesaler, manufacturer, or
distributor may have in the inventory of the retailer, and any repurchase is not
subject to the provisions of Chapter 6 of Title 36. The retailer, wholesaler,
manufacturer, or distributor may furnish a representative to inspect all parts
and certify their acceptability when packed for shipment.
Section 39-59-90. The wholesaler, manufacturer, or distributor has no more than
ninety days to audit the books or records regarding any pay-offs, floor plans
material or goods and to make any collections from them. If the retailer is
involved in any promotional contest or promotion scheme, the wholesaler,
manufacturer, or distributor has no more than ninety days to audit any books or
records in order to determine compliance with the regulations of the contest or
scheme in order to make any collections from them. The ninety day period shall
run concurrently with the time period provided for in Section 39-59-30.
Section 39-59-100. All warranty claims made by the retailer to the wholesaler,
manufacturer, or distributor, for labor and parts must be paid within thirty days
following their approval. All warranty claims must be either approved or
disapproved within thirty days after their receipt, and any claim not
specifically disapproved in writing within thirty days after the receipt must be
construed to be approved and payment must follow within thirty days. Any part
that is subject to a warranty claim and the retailer is required by the
manufacturer to hold a part or parts for inspection, the inspection must be
accomplished within sixty days from the date of the filing of the subject claim,
otherwise the retailer has the right to scrap such parts without prejudicing the
claim.
Section 39-59-110. A wholesaler, manufacturer, or distributor shall fully
indemnify and hold harmless its retailer against any losses, including but not
limited to: court costs and reasonable attorney's fees, or damages arising out
of complaints, claims, or lawsuits including, but not limited to, strict
liability, negligence, misrepresentation, warranty (express or implied), or
rescission of the sale where the complaint, claim, or lawsuit relates to the
manufacture, assembly, or design of new items covered by this chapter, parts or
accessories, or other functions by the manufacturer, beyond the control of the
dealer.
Section 39-59-120. Notwithstanding the terms, provisions, or conditions of any
dealer agreement or franchise or the terms or provisions of any waiver, and any
other legal remedies available, any person who is injured in his business or
property by a violation of this chapter by the commission of any unfair and
deceptive trade practices, or because he refuses to accede to a proposal for an
arrangement which, if consummated, is in violation of this chapter, may bring a
civil action in a court of competent jurisdiction in this State to enjoin further
violations, to recover the damages sustained by him together with the costs of
the suit, including a reasonable attorney's fee.
Section 39-59-130. Any civil action commenced under the provisions of this
chapter must be brought within four years after the cause of action has accrued.
The cause of action shall not accrue until the discovery by the aggrieved party
of the facts constituting a violation of the provisions of this chapter."
Time effective
SECTION 2. This act shall take effect upon approval by the Governor. |