123A.3 - TERMINATION AND NOTICE OF CANCELLATION.
123A.3 TERMINATION AND NOTICE OF CANCELLATION.
1. Except as provided in subsection 5, a brewer or wholesaler
shall not amend, modify, cancel, fail to renew, or otherwise
terminate an agreement unless the brewer or wholesaler furnishes
prior notification to the other party in accordance with subsection
2.
2. The notification required under subsection 1 shall be in
writing and sent to the affected party by certified mail not less
than ninety days before the date on which the agreement will be
amended, modified, canceled, not renewed, or otherwise terminated.
The notification shall contain all of the following:
a. A statement of intention to amend, modify, cancel, fail to
renew, or otherwise terminate the agreement.
b. A statement enumerating the facts and reasons for the
action, including documentation necessary to fully inform the
wholesaler of the reasons for the action.
c. The date on which the action will take effect.
3. For each cancellation, nonrenewal, or termination, the brewer
shall have the burden of showing that it has acted in good faith,
that the notice requirements under this section have been complied
with, and that there was good cause for the cancellation, nonrenewal,
or termination.
4. Notwithstanding the terms or conditions of any agreement, good
cause exists for the purpose of a cancellation, nonrenewal, or
termination if all of the following occur:
a. The wholesaler fails to comply with a provision of the
agreement which is both reasonable and of material significance to
the business relationship between the wholesaler and the brewer.
b. The brewer first acquired knowledge of the failure
described in paragraph "a" not more than twenty-four months
before the date notification was given pursuant to subsection 2.
c. The wholesaler was given notice by the brewer of failure
to comply with the agreement.
d. The wholesaler has been given thirty days in which to
submit a plan of corrective action to comply with the agreement and
an additional ninety days to cure the noncompliance in accordance
with the plan, and has failed to correct the failure to comply with
the provisions of the agreement.
5. A brewer may cancel, fail to renew, or otherwise terminate an
agreement without furnishing any prior notification and without good
cause as required in subsection 4 for any of the following reasons:
a. The wholesaler's failure to pay any account when due and
upon written demand by the brewer for the payment, in accordance with
agreed upon payment terms.
b. The wholesaler's assignment for the benefit of creditors,
or similar disposition, of substantially all of the assets of the
party's business.
c. The insolvency of the wholesaler, or the institution of
proceedings in bankruptcy by or against the wholesaler.
d. The dissolution or liquidation of the wholesaler.
e. The wholesaler's conviction of, or plea of guilty or no
contest to, a charge of violating a law or rule in this state which
materially and adversely affects the ability of either party to
continue to sell beer in this state, or the revocation or suspension
of a license or permit to sell beer in this state for a period
greater than thirty-one days.
f. Any attempted transfer of business assets of the
wholesaler, ten percent or more of the voting stock of the wholesaler
or the voting stock of any parent corporation of the wholesaler, or
any change in the beneficial ownership or control of any wholesaler
without obtaining the prior consent or approval as provided for under
section 123A.6.
g. The wholesaler's fraudulent conduct relating to a material
matter on the part of the wholesaler in dealings with the brewer or
its product. However, the brewer shall have the burden of proving
fraudulent conduct relating to a material matter on the part of the
wholesaler in any legal action challenging the termination.
h. The wholesaler distributes, sells, or delivers beer to a
retailer whose premises are situated outside the geographic territory
agreed upon by the wholesaler and the brewer as the area in which the
wholesaler will sell beer purchased from the brewer, without the
consent of the brewer and the distributor who has been assigned the
territory by the brewer. Section History: Recent Form
95 Acts, ch 101, §3
Referred to in § 123A.4