32-6B-45. Good cause required for franchisor termination, cancellation, nonrenewal, or change in competitive circumstances.
No franchisor may, directly or through an officer, agent, or employee, terminate, cancel, fail to renew, or substantially change the competitive circumstances of a vehicle dealership agreement without good cause. For the purposes of this section, good cause means failure by a vehicle dealer to substantially comply with essential and reasonable requirements imposed upon the vehicle dealer by the vehicle dealership agreement, if the requirements are not different from those requirements imposed on other similarly situated vehicle dealers by their terms. In addition, good cause exists if:
(1)Without the consent of the vehicle manufacturer, the vehicle dealer has transferred an interest in the vehicle dealership, there has been a withdrawal from the dealership of an individual proprietor, partner, major shareholder, or the manager of the dealership, or there has been a substantial reduction in interest of a partner or major stockholder;
(2)The vehicle dealer has filed a voluntary petition in bankruptcy or has had an involuntary petition in bankruptcy filed against it which has not been discharged within thirty days after the filing, there has been a closeout or sale of a substantial part of the dealer's assets related to the vehicle business, or there has been a commencement of dissolution or liquidation of the dealer;
(3)There has been a change, without the prior written approval of the manufacturer, in the location of the dealer's principal place of business under the dealership agreement;
(4)The vehicle dealer has defaulted under a security agreement between the dealer and the vehicle manufacturer or there has been a revocation or discontinuance of a guarantee of the dealer's present or future obligations to the vehicle manufacturer;
(5)The vehicle dealer has failed to operate in the normal course of business for seven consecutive days or has otherwise abandoned the business;
(6)The vehicle dealer has pleaded guilty to or has been convicted of a felony affecting the relationship between the dealer and the manufacturer;
(7)The dealer has engaged in conduct which is injurious or detrimental to the dealer's customers or to the public welfare; or
(8)The vehicle dealer, after receiving notice from the manufacturer of its requirements for reasonable market penetration based on the manufacturer's experience in other comparable marketing areas, consistently fails to meet the manufacturer's market penetration requirements.
A vehicle manufacturer shall provide a vehicle dealer at least ninety days prior written notice of termination, cancellation, or nonrenewal of the dealership agreement. The notice shall state all reasons constituting good cause for the action and shall provide that the dealer has sixty days in which to cure any claimed deficiency. If the deficiency is rectified within sixty days, the notice is void. The notice and right to cure provisions under this section do not apply if the reason for termination, cancellation, or nonrenewal is for any reason set forth in subdivisions (1) to (7), inclusive.
Source: SL 1986, ch 250, §46; SL 2010, ch 156, §5, eff. Mar. 9, 2010.
Structure South Dakota Codified Laws
Chapter 06B - Regulation Of Vehicle Dealers
Section 32-6B-1 - Definition of terms.
Section 32-6B-1.1 - Motor home defined.
Section 32-6B-1.2 - Recreational park trailer defined.
Section 32-6B-1.3 - Temporary special events lot defined.
Section 32-6B-1.4 - Temporary supplemental lot defined.
Section 32-6B-2 - Principal place of business defined.
Section 32-6B-3 - Sale on consignment--Contract required--Form.
Section 32-6B-3.1 - Sale on consignment prohibited for vehicle without statement of origin.
Section 32-6B-3.2 - Odometer reading required for consignment or auction--Violation a misdemeanor.
Section 32-6B-3.4 - Auction on consignment of older vehicle titled in another state.
Section 32-6B-3.5 - Auction on consignment of older motorcycle titled in another state.
Section 32-6B-4 - License required--Violation as misdemeanor.
Section 32-6B-4.1 - Brokering prohibited--Violation as misdemeanor.
Section 32-6B-5 - Exemptions from licensing requirements.
Section 32-6B-5.2 - Permit for dealer licensed in another state to sell motorcycles at event.
Section 32-6B-5.3 - Permit for dealer licensed in another state to sell trailers at event.
Section 32-6B-5.5 - Permit for manufacturer to display trailers at event.
Section 32-6B-5.7 - Permit for sponsor to display customized motorcycles at event.
Section 32-6B-6 - Application required--Contents.
Section 32-6B-7.2 - Increase in dealer bond amount--Implementation.
Section 32-6B-8 - Dealer in new vehicles to maintain repair shop.
Section 32-6B-11 - Verification of application by department--Refusal to issue license.
Section 32-6B-12 - Classification of licenses--Issuance of license certificate.
Section 32-6B-12.1 - Low-speed vehicle retail sales.
Section 32-6B-13 - Fees for dealer's licenses--Disposition of fees.
Section 32-6B-15 - Renewal application--Fees.
Section 32-6B-16 - Modification of license certificate--Display of license.
Section 32-6B-17 - Separate licenses--Requirement.
Section 32-6B-18 - Permission to change principal place of business within county.
Section 32-6B-19 - Supplemental licenses for supplemental lots within county--Exemptions.
Section 32-6B-20 - Books, records, and files to be kept--Inspection.
Section 32-6B-21 - Issuance of dealer plates--Numbering--Fees--Return of plates--Misdemeanor.
Section 32-6B-21.1 - Mailing fees.
Section 32-6B-22 - Use of dealer plates--Transfer of plates--Violation as misdemeanor.
Section 32-6B-22.2 - Use of dealer 88 license plates_Transfer of plates.
Section 32-6B-24 - Repossession of dealer plates.
Section 32-6B-26 - Temporary license permit--Provision by dealer.
Section 32-6B-27 - Location of temporary license permit.
Section 32-6B-36.1 - Dealer's car auction agency--Government-owned vehicles.
Section 32-6B-36.4 - Use of agency plates--Transfer of plates--Violation as misdemeanor.
Section 32-6B-37 - Dealer's car auction agency--Records required.
Section 32-6B-37.1 - Public auction to keep records--Inspection by dealer appointed inspectors.
Section 32-6B-38 - Appointment of inspectors--Entry authorized--Complaints.
Section 32-6B-39 - Investigation of dealers--Authorized.
Section 32-6B-41.1 - Cease and desist order for specified violations--Period of effectiveness.
Section 32-6B-41.2 - Cease and desist order--Request for hearing--Procedure.
Section 32-6B-41.3 - Finality of cease and desist order.
Section 32-6B-41.5 - Contest of order--Procedure.
Section 32-6B-41.6 - Finality of order.
Section 32-6B-41.7 - Cease and desist order--Failure to comply--Penalty.
Section 32-6B-42 - Notification of surety of license denial, suspension or revocation.
Section 32-6B-49.1 - Terms or conditions not allowed in franchise agreement.
Section 32-6B-50 - Notice of intention to enter into additional franchise for same line-make.
Section 32-6B-51 - Copies of notice to be sent to franchisees and other interested persons.
Section 32-6B-53 - Hearing on objection--Time and place--Notice--Continuance.
Section 32-6B-54 - Burden of proof at hearing.
Section 32-6B-55 - Hearing upon change of circumstances.
Section 32-6B-56 - Dealer's license not to be issued to franchisee absent compliance by franchisor.
Section 32-6B-56.1 - Trailer franchisees not subject to certain provisions.
Section 32-6B-59 - Right of department to apply for injunction against violation of chapter.
Section 32-6B-60 - Adoption of rules.
Section 32-6B-61 - Schedule of compensation for warranty work.
Section 32-6B-62 - Trailer dealers exempt from certain liability insurance requirements.
Section 32-6B-63 - Regulation of advertising.
Section 32-6B-64 - Advertising defined.
Section 32-6B-66 - In-transit permits for certain trailer manufacturer's trailers.
Section 32-6B-67 - Promulgation of rules for in-transit permits for trailer manufacturer's trailers.
Section 32-6B-69 - Franchise agreement--Change of terms--Dealer rights.
Section 32-6B-69.1 - Audit by franchisor--Limitation--Exception.
Section 32-6B-71 - Vehicle dealership--Death of owner--Succession of interest.
Section 32-6B-72 - Succession--Refusal to honor.
Section 32-6B-74 - Contents of notice.
Section 32-6B-76 - Approval may not be unreasonably withheld.
Section 32-6B-78 - Transferee's qualification as sole issue in objection.
Section 32-6B-79 - Manufacturer defined.
Section 32-6B-80 - Manufacturer or franchisor may not own or operate dealership--Exceptions.
Section 32-6B-81 - Manufacturer or franchisor may own or operate for limited period--Conditions.
Section 32-6B-82 - Exceptions for the purpose of broadening diversity of dealer body.
Section 32-6B-83 - Extension of time period in 32-6B-81--Application--Limit.
Section 32-6B-85 - Civil action for injunction and damages.
Section 32-6B-86 - Applicability of SL 2010, ch 156 amendments.
Section 32-6B-89 - Licensed dealer permitted to take vehicle to adjoining county for demonstration.