Nevada Trade Regulations and Practices

Sec. § 597.1143
Dealer agreement: Termination, failure to renew or substantial change of terms for good cause.


1.

A supplier shall not terminate, fail to renew or substantially change the terms of a dealer agreement without good cause.

2.

Except as otherwise provided in this section, a supplier may terminate or refuse to renew a dealer agreement for good cause if the supplier provides to the dealer a written notice setting forth the reasons for the termination or nonrenewal of the dealer agreement at least 180 days before the termination or nonrenewal of the dealer agreement.

3.

A supplier shall include in the written notice required by subsection 2 an explanation of the deficiencies of the dealer and the manner in which those deficiencies must be corrected. If the dealer corrects the deficiencies set forth in the notice within 60 days after he or she receives the notice, the supplier shall not terminate or fail to renew the dealer agreement for the reasons set forth in the notice.

4.

A supplier shall not terminate or refuse to renew a dealer agreement based solely on the failure of the dealer to comply with the requirements of the dealer agreement concerning the share of the market the dealer was required to obtain unless the supplier has, for not less than 1 year, provided assistance to the dealer in the dealer’s effort to obtain the required share of the market.

5.

A supplier is not required to comply with the provisions of subsections 2 and 3 if the supplier terminates or refuses to renew a dealer agreement for any reason set forth in paragraphs (b) to (i), inclusive, of subsection 6.

6.

As used in this section, “good cause” means:

(a)

A dealer fails to comply with the terms of a dealer agreement, if the terms are not substantially different from the terms required for other dealers in this State or any other state;

(b)

A closeout or sale of a substantial part of the business assets of a dealer or a commencement of the dissolution or liquidation of the business assets of the dealer;

(c)

A dealer changes its principal place of business or adds other places of business without the prior approval of the supplier, which may not be unreasonably withheld;

(d)

A dealer substantially defaults under a chattel mortgage or other security agreement between the dealer and the supplier;

(e)

A guarantee of a present or future obligation of a dealer to the supplier is revoked or discontinued;

(f)

A dealer fails to operate in the normal course of business for at least 7 consecutive days;

(g)

A dealer abandons the dealership;

(h)

A dealer pleads guilty or guilty but mentally ill to, or is convicted of, a felony affecting the business relationship between the dealer and supplier; or

(i)

A dealer transfers a financial interest in the dealership, a person who has a substantial financial interest in the ownership or control of the dealership dies or withdraws from the dealership, or the financial interest of a partner or major shareholder in the dealership is substantially reduced.
Ê For the purposes of this section, good cause does not exist if the supplier consents to any action described in this section.
Source

Last accessed
Feb. 5, 2021