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Understanding Fair Dealership Law: Protecting Dealers' Rights
Definition & Meaning
The Fair Dealership Law is a legislative framework in the United States designed to ensure fair business practices between dealers and suppliers, often referred to as grantors. This law aims to protect dealers from unfair treatment due to the inherent power imbalance in negotiations. It covers various aspects of dealership agreements, including the conditions under which these agreements can be terminated or not renewed.
Table of content
Legal Use & context
The Fair Dealership Law is primarily used in the context of commercial law, specifically in the regulation of dealership agreements. It serves to create a balanced relationship between dealers and suppliers, ensuring that dealers are not coerced into unfavorable agreements. Users may find relevant forms and templates for dealership agreements and terminations on platforms like US Legal Forms, which are drafted by qualified attorneys.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A car dealership is informed by its manufacturer that its agreement will not be renewed due to alleged non-compliance with operational standards. The dealership can challenge this decision under the Fair Dealership Law if it can demonstrate that it has met the necessary requirements.
Example 2: A dealer who has filed for bankruptcy may face termination of their dealership agreement. However, if the bankruptcy petition is resolved within 30 days, the dealer may retain their rights under the law. (hypothetical example)
Relevant laws & statutes
73 P.S. § 205-9 is a key statute under the Fair Dealership Law in Pennsylvania, which prohibits suppliers from coercing dealers into ordering products that were not voluntarily requested. This statute exemplifies the legal protections afforded to dealers against unfair practices.
State-by-state differences
State
Key Provisions
Pennsylvania
Prohibits coercion in dealership agreements.
California
Offers similar protections but includes additional provisions regarding franchise agreements.
New York
Focuses on the fairness of contract terms and conditions.
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
Comparison with related terms
Term
Definition
Key Differences
Franchise Law
Regulates the relationship between franchisors and franchisees.
Franchise law often includes additional regulations specific to franchises, while Fair Dealership Law applies broadly to all dealership agreements.
Contract Law
Governs the creation and enforcement of agreements between parties.
Fair Dealership Law includes specific protections for dealers that are not typically found in general contract law.
Common misunderstandings
What to do if this term applies to you
If you are a dealer facing potential termination of your dealership agreement, it is crucial to review the terms of your contract and understand your rights under the Fair Dealership Law. You may consider using legal templates from US Legal Forms to draft a response or seek legal advice if the situation is complex.
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