59.1-354 - Cancellation.
§ 59.1-354. Cancellation.
A. Notwithstanding the terms, provisions or conditions of any agreement, nosupplier shall unilaterally amend, cancel, terminate or refuse to continue torenew any agreement, or unilaterally cause a dealer to resign from anagreement, unless the supplier has first complied with the provisions of §59.1-355, and good cause exists for amendment, termination, cancellation,nonrenewal, noncontinuance or causing a resignation. "Good cause" shall notinclude the sale or purchase of a supplier. "Good cause" shall be limitedto withdrawal by the supplier, its successors and assigns, of the sale of itsproducts in Virginia, or dealer performance deficiencies including, but notlimited to, the following:
1. Bankruptcy or receivership of the dealer;
2. Assignment for the benefit of creditors or similar disposition of theassets of the dealer, other than the creation of a security interest in theassets of a dealer for the purpose of securing financing in the ordinarycourse of business; or
3. Failure by the dealer to substantially comply, without reasonable cause orjustification, with any reasonable and material requirement imposed upon himin writing by the supplier including, but not limited to, a substantialfailure by a dealer to (i) maintain a sales volume or trend of his supplier'sproduct line or lines comparable to that of other similarly situated dealersof that product line, or (ii) render services comparable in quality, quantityor volume to the services rendered by other dealers of the same product orproduct line similarly situated.
In any determination as to whether a dealer has failed to substantiallycomply, without reasonable excuse or justification, with any reasonable andmaterial requirement imposed upon him by the supplier, consideration shall begiven to the relative size, population, geographical location, number ofretail outlets and demand for the products applicable to the market area ofthe dealer in question and to comparable market area.
B. No supplier shall be required to give notice or show good cause pursuantto subsection A of this section to unilaterally amend agreements with dealersto comply with federal or state law or, where not inconsistent with thischapter, to uniformly amend agreements as to all dealers of the supplier inquestion in all states in which the supplier is marketing its products.
C. In any dispute as to whether a supplier has acted with good cause asrequired by this section the supplier shall have the burden of proof toestablish that good cause existed.
(1988, c. 73.)