Termination or Modification of Agreement With Wholesaler by Supplier — Prerequisites

  1. Law
  2. Tennessee Code
  3. Intoxicating Liquors
  4. Beer
  5. Beer Wholesaler-Supplier Relations
  6. Termination or Modification of Agreement With Wholesaler by Supplier — Prerequisites

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Except as provided in §§57-5-505 and57-5-506, 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;
  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:
    1. 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;
    2. 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;
    3. 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
    4. 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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