C.R.S. Section 35-38-106
Cancellation of contract

  • repurchase of inventory


If a dealer agreement is canceled or not renewed by either party or by mutual consent, the supplier shall repurchase the dealer’s remaining inventory and any specific data processing hardware and software that the supplier required the dealer to purchase, including computer systems equipment the supplier required for communications purposes. The supplier shall repurchase such equipment at its fair market value.


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The supplier shall repurchase specialized repair tools purchased by the dealer pursuant to the supplier’s requirements. Such specialized repair tools must be unique to the supplier product line and in complete and usable condition.


The supplier shall repurchase specialized repair tools at a price equal to seventy-five percent of the total invoice amount charged by the supplier to the dealer.


The supplier shall pay the dealer one hundred percent of the net cost of all new, unsold, undamaged, and complete equipment that is resalable. The supplier may deduct a reasonable allowance for depreciation due to the dealer’s usage and deterioration caused by weather conditions at the dealer’s location. The supplier may also deduct all programs and discounts it previously allowed.


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The supplier shall pay the dealer ninety-five percent of the current net price of all new, unused, and undamaged repair parts and accessories that are listed in the supplier’s effective price list or catalog.


A dealer may not return obsolete parts; except that a dealer may return a part for credit if it is found in the supplier’s current returnable parts list or any superseded part that is not the subject to the suppliers parts return program as of the date of termination.


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The supplier shall pay the dealer five percent of the current net price on all new, unused, and undamaged repair parts that the dealer returns to cover the cost of handling, packing, and loading.


The supplier may perform the handling, packing, and loading itself instead of paying the five percent handling fee pursuant to paragraph (a) of this subsection (5). The dealer shall make available to the supplier all equipment previously purchased by the dealer. The dealer shall make such equipment available at the dealer’s place of business or at those places where the equipment is located.


This section does not require a supplier to repurchase any of the following:


A repair part that has a limited storage life or that is subject to deterioration;


A single repair part that is priced as a set of two or more items;


A repair part that, because of its condition is not resalable as a new part without being repaired or reconditioned;


Inventory for which the equipment dealer is unable to furnish evidence, to the supplier’s satisfaction, of good title that is free and clear of all claims, liens, and encumbrances;


Inventory that the dealer wants to keep, including lease or rental equipment if the dealer has a contractual right to do so;


Equipment that is not in new, unused, undamaged, and complete condition;


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Equipment that has been used by the dealer or has deteriorated because of weather conditions at the dealer’s location unless the supplier receives an allowance for this usage or deterioration.


For purposes of this paragraph (g), previously unsold demonstrated equipment that has less than fifty hours of use and that is equipped with an hour meter is new equipment.


Repair parts that are not in new, unused, and undamaged condition;


Inventory that the dealer ordered on or after the date the dealer received the notification of the supplier’s termination of the dealer agreement; or


Inventory that the dealer acquired from any source other than the supplier or the supplier’s successor in interest.


If a supplier fails or refuses to repurchase inventory as required by this section, the supplier shall be liable for:


One hundred ten percent of the current net price of the inventory;


Any freight charges paid by the dealer;


Interest at the statutory rate from the date of shipment to the supplier; and


Five percent of the inventory’s current net price to cover handling, packing, and loading.

Source: Section 35-38-106 — Cancellation of contract - repurchase of inventory, https://leg.­colorado.­gov/sites/default/files/images/olls/crs2023-title-35.­pdf (accessed Oct. 20, 2023).

Green check means up to date. Up to date

Current through Fall 2024

§ 35-38-106’s source at colorado​.gov