Unfair Methods of Competition and Unfair or Deceptive Acts or Practices

  1. Law
  2. Georgia Code
  3. Contracts
  4. Illegal and Void Contracts Generally
  5. Regulation of Agricultural Equipment Manufacturers, Distributors, and Dealers
  6. Unfair Methods of Competition and Unfair or Deceptive Acts or Practices

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  1. It shall be deemed a violation of Code Section 13-8-14 for any manufacturer, factory branch, factory representative, distributor, or wholesaler, distributor branch, distributor representative, or dealer to engage in any action which is arbitrary, in bad faith, or unconscionable and which causes damage in terms of law or equity to any of the parties or to the public.
  2. It shall be deemed a violation of Code Section 13-8-14 for a manufacturer, a distributor, a wholesaler, a distributor branch or division, a factory branch or division, or a wholesale branch or division, or officer, agent, or other representative thereof, to coerce, or attempt to coerce, any dealer:
    1. To order or accept delivery of any unit of equipment, parts or accessories therefor, or any other commodity or commodities which such dealer has not voluntarily ordered; or
    2. To order or accept delivery of any equipment with special features, accessories, or equipment not included in the base list price of such equipment as publicly advertised by the manufacturer thereof.
  3. It shall be deemed a violation of Code Section 13-8-14 for a manufacturer, a distributor, a wholesaler, a distributor branch or division, a factory branch or division, or a wholesale branch or division, or officer, agent, or other representative thereof:
    1. To refuse to deliver in reasonable quantities and within a reasonable time after receipt of dealer's order to any dealer having a franchise or contractual agreement for the retail sale of new equipment sold or distributed by such manufacturer, distributor branch or division, factory branch or division, or wholesale branch or division anyitem of equipment covered by such franchise or contract specifically advertised or represented by such manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division to be available for immediate delivery; provided, however, that the failure to deliver any such unit of equipment shall not be considered a violation of this article if such failure is due to prudent and reasonable restriction on extension of credit by the franchisor to the dealer, an act of God, work stoppage or delay due to a strike or labor difficulty, a bona fide shortage of materials, freight embargo, or other cause over which the manufacturer, distributor, or wholesaler, or any agent thereof, shall have no control;
    2. To coerce, or attempt to coerce, any dealer to enter into any agreement, whether written or oral, supplementary to an existing franchise with such manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division, or officer, agent, or other representative thereof; or to do any other act prejudicial to such dealer by threatening to cancel any franchise or any contractual agreement existing between such manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division, and such dealer; provided, however, that notice in good faith to any dealer of such dealer's violation of any terms or provisions of such franchise or contractual agreement shall not constitute a violation of this article if such notice is in writing mailed by registered or certified mail or statutory overnight delivery to such dealer at his or her current business address;
      1. To terminate the franchise or selling agreement of any such dealer without due cause, as defined in subparagraph (C) of this paragraph.The termination of a franchise or selling agreement, without due cause, shall constitute an unfair termination, regardless of the specified time period of such franchise or selling agreement. Except where the grounds for such termination fall within division (iii) of subparagraph (C) of this paragraph, such manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division, or officer, agent, or other representative thereof, shall notify a dealer in writing of the termination of the franchise or selling agreement of such dealer at least 90 days before the effective date thereof, stating the specific grounds for such termination; and in no event shall the contractual term of any such franchise or selling agreement expire, without the written consent of the dealer involved, prior to the expiration of at least 90 days following such written notice. During the 90 day period, either party may, in appropriate circumstances, petition a court to modify such 90 day stay or to extend it pending a final determination of such proceedings on the merits.The court shall have authority to grant preliminary and final injunctive relief.Should the dealer cure the claimed deficiency within the 90 day period, then the franchise or selling agreement shall not be terminated.
      2. Before termination of the franchise 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, or officer, agent, or other representative thereof, shall provide written notice of such intention at least one year in advance.After such notice, the manufacturer or other entity issuing the notice shall make good faith efforts to work with the 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 or other entity, at the end of the one-year notice period, may terminate or elect not to renew the agreement only upon further written notice specifying the reasons for determining that the dealer failed to meet reasonable criteria or market penetration.Such written notice must specify that termination is effective 90 days from the date of the notice.Either party may petition the court pursuant to subparagraph (A) of this paragraph for the relief specified therein.Should the dealer cure the claimed deficiency within the 90 day period, then the franchise or selling agreement shall not be terminated.
      3. As used in this paragraph, tests for determining what constitutes due cause for a manufacturer or distributor to terminate a franchise agreement shall include whether the dealer:
        1. Has transferred an ownership interest in the dealership without the manufacturer's or distributor's consent;
        2. Has made a material misrepresentation in applying for or acting under the franchise agreement;
        3. Has filed a voluntary petition in bankruptcy or has had an involuntary petition in bankruptcy filed against the dealer which has not been discharged within 30 days after the filing, is in default under the provisions of a security agreement in effect with the manufacturer or distributor, or is in receivership;
        4. Has engaged in an unfair business practice;
        5. Has inadequately represented the manufacturer's or distributor's products with respect to sales, service, or warranty work;
        6. Has engaged in conduct which is injurious or detrimental to the public welfare;
        7. Has inadequate sales and service facilities and personnel;
        8. Has failed to comply with an applicable licensing law;
        9. Has been convicted of a crime, the effect of which would be detrimental to the manufacturer, distributor, or dealership;
        10. Has failed to operate in the normal course of business for seven consecutive business days;
        11. Has relocated the dealer's place of business without the manufacturer's or distributor's consent; or
        12. Has failed to comply with the terms of the dealership or franchise agreement;
    4. To resort to or use any false or misleading advertisement in connection with its business as such manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division, or officer, agent, or other representative thereof;
    5. To offer to sell or to sell any new unit of equipment, or parts or accessories therefor, to any other dealer at a lower actual price therefor than the actual price offered to any other dealer for the same model equipment identically equipped; or to utilize any device including, but not limited to, sales promotion plans or programs which result in such lesser actual price; provided, however, that the provisions of this paragraph shall not apply to sales to a dealer for resale to any unit of the United States government, the state, or any of its political subdivisions; and provided, further, that the provisions of this paragraph shall not apply so long as a manufacturer, distributor, or wholesaler, or any agent thereof, sells or offers to sell such new equipment, parts, or accessories to all their franchised dealers at an equal price;
    6. To discriminate willfully, either directly or indirectly, in price, programs, or terms of sale offered to franchisees, where the effect of such discrimination may be to lessen competition substantially or to give to one holder of a franchise any business or competitive advantage not offered to all holders of the same or similar franchise;
    7. To prevent or attempt to prevent, by contract or otherwise, any dealer from changing the capital structure of his or her dealership or the means by or through which he or she finances the operation of his or her dealership, provided such dealer at all times meets any reasonable capital standards agreed to between the dealership and the manufacturer, distributor, or wholesaler and provided such change by the dealer does not result in a change in the executive management of the dealership;
    8. To prevent or attempt to prevent, by contract or otherwise, any dealer or any officer, partner, or stockholder of any dealer from selling or transferring any part of the interest of any of them to any other person or persons or party or parties; provided, however, that no dealer, officer, partner, or stockholder shall have the right to sell, transfer, or assign the franchise or power of management or control thereunder without the consent of the manufacturer, distributor, or wholesaler, except that such consent shall not be unreasonably withheld;

      (8.1) To prevent a dealer from having an investment in or holding a dealership contract for the sale of competing product lines or makes of equipment, or to require a dealer to provide separate facilities for competing product lines or makes of equipment;

      (8.2) To impose, directly or indirectly, unreasonable restrictions on the dealer relative to transfer, sale, renewal, termination, location, or site control;

    9. To obtain money, goods, services, anything of value, or any other benefit from any other person with whom the dealer does business or employs on account of or in relation to the transactions between the dealer, the franchisor, and such other person; or
    10. To require a dealer to assent to a release, assignment, notation, waiver, or estoppel which would relieve any person from liability imposed by this article.
  4. It shall be deemed a violation of Code Section 13-8-14 for a dealer:
    1. To require a retail purchaser of a new unit of equipment, as a condition of sale and delivery thereof, also to purchase special features, appliances, equipment, parts, or accessories not desired or requested by the purchaser; provided, however, that this prohibition shall not apply to special features, appliances, equipment, parts, or accessories which are already installed when the unit of equipment is received by the dealer from the manufacturer, distributor, or wholesaler thereof;
    2. To represent and sell as new and unused any unit of equipment which has been used and operated for demonstration or other purposes without stating to the purchaser the approximate amount of use the unit of equipment has experienced; or
    3. To resort to or use any false or misleading advertisement in connection with his or her business as such dealer.

(Code 1981, §13-8-15, enacted by Ga. L. 1993, p. 1585, § 4; Ga. L. 1993, p. 91, § 13; Ga. L. 2000, p. 1589, § 3; Ga. L. 2002, p. 1101, § 1.)

Editor's notes.

- Ga. L. 2000, p. 1589, § 16, not codified by the General Assembly, provides that the Act was applicable to notices delivered on or after July 1, 2000.


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