4.1-406 - Cancellation.
§ 4.1-406. Cancellation.
Notwithstanding the terms, provisions or conditions of any agreement, nowinery shall unilaterally amend, cancel, terminate or refuse to continue torenew any agreement, or unilaterally cause a wholesaler to resign from anagreement, unless the winery has first complied with § 4.1-407 and good causeexists for amendment, termination, cancellation, nonrenewal, noncontinuanceor causing a resignation. Good cause shall not include the sale or purchaseof a winery. Good cause shall include, but is not limited to the following:
1. Revocation of the wholesaler's license to do business in the Commonwealth;
2. Bankruptcy or receivership of the wholesaler;
3. Assignment for the benefit of creditors or similar disposition of theassets of the wholesaler, other than the creation of a security interest inthe assets of a wholesaler for the purpose of securing financing in theordinary course of business; or
4. Failure by the wholesaler to substantially comply, without reasonablecause or justification, with any reasonable and material requirement imposedupon him in writing by the winery including, but not limited to, asubstantial failure by a wine wholesaler to (i) maintain a sales volume ortrend of his winery's brand or brands comparable to that of otherdistributors of that brand in the Commonwealth similarly situated or (ii)render services comparable in quality, quantity or volume to the servicesrendered by other wholesalers of the same brand or brands within theCommonwealth similarly situated. In any determination as to whether awholesaler has failed to substantially comply, without reasonable excuse orjustification, with any reasonable and material requirement imposed upon himby the winery, consideration shall be given to the relative size, population,geographical location, number of retail outlets and demand for the productsapplicable to the territory of the wholesaler in question and to comparableterritories.
Nothing in this section shall be construed to prohibit a winery fromproposing or effecting an amendment to a contract with a wine wholesaler inthe Commonwealth provided that such amendment is not inconsistent with thischapter.
Good cause shall not be construed to exist without a finding of a materialdeficiency for which the wholesaler is responsible in any case in which goodcause is alleged to exist based on circumstances not specifically set forthin subdivisions 1 through 4 of this section.
(Code 1950, § 4-118.27; 1985, c. 542, § 4-118.47; 1987, c. 246; 1989, c. 10;1993, c. 866; 1996, c. 3.)