Termination Or Nonrenewal of Agreement; Notice

Sec. 2352.053. TERMINATION OR NONRENEWAL OF AGREEMENT; NOTICE. (a) Except as provided by Subsection (d), a manufacturer or distributor may not terminate an agreement unless the dealer defaults under Section 2352.0523 and: (1) the manufacturer or distributor gives the dealer written notice of the default and possible termination in clear and concise terms; (2) the notice states the default; (3) the dealer has been given the applicable cure period to make a good faith effort to cure the default stated in the notice; and (4) the dealer fails to cure the default. (b) Good cause is not required for the nonrenewal of an agreement. (c) The fact that a dealer holds an agreement involving another line, make, or brand of new boat or new boat motor does not constitute a default or grounds for termination of an agreement. (d) A manufacturer or distributor may terminate an agreement on written notice, without a cure period, if the dealer: (1) financially defaults to the manufacturer, the distributor, or a financing source; (2) becomes subject to an order for relief, as that term is used in Title 11, United States Code; (3) engages in an act of material fraud relating to the performance of a right or obligation under the agreement; (4) is a corporation that ceases to exist; (5) becomes insolvent or takes or fails to take any action that constitutes an admission of inability to pay debts as the debts mature; (6) makes a general assignment for the benefit of creditors to an agent authorized to liquidate any substantial amount of assets; (7) applies to a court for the appointment of a receiver for any assets or properties; (8) fails to substantially comply with a federal, state, or local law, rule, regulation, ordinance, or order applicable to the agreement; or (9) receives three valid notices of a default under Section 2352.0523 for the same default, whether cured or not, within a 12-month period. Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 1148 (H.B. 1960), Sec. 5, eff. September 1, 2011. SUBCHAPTER C. REGULATION OF MANUFACTURERS, DISTRIBUTORS, AND DEALERS