C.R.S. Section 35-38-103
Prohibited acts

(1)

It is a violation of this article for a supplier to:

(a)

Coerce or compel an equipment dealer to enter into a written or oral agreement that is supplementary to an existing dealer agreement with the supplier unless that agreement is imposed on all other similarly situated dealers in this state;

(b)

Intentionally left blank —Ed.

(I)

Refuse to deliver, within a reasonable time after receipt of an order, equipment covered by the dealer agreement specifically represented by the supplier to be available for immediate delivery, if such equipment is available in reasonable quantities.

(II)

This paragraph (b) shall not apply if failure is due to any of the following:

(A)

Restrictions on the extension of credit by the supplier to the equipment dealer;

(B)

A breach of or a default under the agreement by the equipment dealer;

(C)

An act of God;

(D)

Work stoppage or delay due to a strike or labor difficulty;

(E)

A bona fide shortage of materials; or

(F)

Other causes over which the supplier has no control.

(c)

Terminate, cancel, or fail to renew a dealer agreement or to substantially change the competitive circumstances of the dealer agreement without cause;

(d)

Require as a condition of renewal or extension of a dealer agreement that the dealer complete substantial renovation to the dealer’s place of business or to acquire new or additional space to serve as the dealer’s place of business unless the supplier provides:

(I)

At least one year’s written notice of such condition;

(II)

All of the grounds supporting this condition; and

(III)

A reasonable period of time in which to complete the renovation or acquisition after the one-year notice period expires;

(e)

Intentionally left blank —Ed.

(I)

Discriminate in the prices charged for equipment of like grade and quantity sold by the supplier to similarly situated dealers in this state.

(II)

Nothing in this paragraph (e) shall be construed to:

(A)

Prevent the use of differentials that result from the differing quantities in which equipment is sold or delivered and does not prevent a supplier from offering a lower price in order to meet a competitor’s equally low price or the services or facilities furnished by a competitor; or

(B)

Apply to sales to an equipment dealer for resale to a unit or agency of the United States government, this state or its political subdivisions, a major fleet account, or an organization for testing or demonstration purposes.

(f)

Prevent, by any means, an equipment dealer from changing the capital structure of the equipment dealership or the means by which the dealership is financed, if the dealer meets reasonable capital standards imposed by the supplier or as otherwise agreed to between the dealer and the supplier at all times and this change does not cause a change of the controlling interest in the executive management or the board of directors or of a guarantor of the dealership;

(g)

Intentionally left blank —Ed.

(I)

Prevent, by any means, an equipment dealer or any officer, member, partner, or stockholder of a dealer from selling or transferring any part of the interest of the officer, member, partner, or stockholder to any other person.

(II)

No dealer, officer, partner, member, or stockholder may sell, transfer, or assign the equipment dealership or power of management or control of the dealership without the written consent of the supplier.

(III)

If a supplier determines that the designated transferee is not acceptable, the supplier shall provide the dealer with written notice of the supplier’s objection and the specific reasons for withholding its consent.

(h)

Require an equipment dealer to assent to a release, assignment, novation, waiver, or estoppel that would relieve a person from complying with this article;
(i)
Intentionally left blank —Ed.

(I)

Withhold reasonable consent to the transfer of the equipment dealer’s interest in the dealership to a member of the dealer’s or the principal owner’s family, if such equipment dealer or the principal owner of the dealership dies and the family member meets the reasonable financial, business, ability, experience, and character standards of the supplier.

(II)

If the supplier determines that a family member does not meet the supplier’s standards, the supplier shall provide the dealer’s representative with written notice of the supplier’s specific objections. A supplier has ninety days to consider a request to make a transfer.

(III)

For the purposes of this paragraph (i), “family member” means a spouse, parent, sibling, child, stepchild, son-in-law, or daughter-in-law and any lineal descendant and includes an adopted child and any lineal descendant of such child.

(IV)

Notwithstanding subparagraph (I) of this paragraph (i), if a supplier and dealer have executed an agreement concerning succession rights before the dealer’s death and that agreement has not been revoked or otherwise terminated by either party, such agreement shall control the terms of succession.

(2)

Notwithstanding paragraphs (g) and (i) of subsection (1) of this section, a supplier may withhold consent to a transfer of interest in a dealership if the dealer’s area of responsibility or trade area does not afford sufficient sales potential to reasonably support the dealer. The supplier has the burden of demonstrating this fact.

Source: Section 35-38-103 — Prohibited acts, (accessed Dec. 24, 2024).

Green check means up to date. Up to date

Current through Fall 2024

§ 35-38-103’s source at