§ 11-1303. Grantor's notification to distributor; requirements; alteration of terms; compliance

   (a) In general. -- Except as provided in subsections (d) and (e) of this section, a grantor shall notify a distributor not less than 60 days before:

   (1) The proposed date of cancellation of an agreement that has not expired according to its terms; or

   (2) For agreements that contemplate renewal options exercisable by either party, the expiration date of an agreement that the grantor does not intend to renew.

(b) Requirements. -- The notice required under subsection (a) of this section shall:

   (1) Be in writing and be sent by certified mail, return receipt requested; and

   (2) Contain:

      (i) A statement that the grantor intends to cancel or not renew the agreement;

      (ii) A list of reasons for the proposed cancellation or nonrenewal, including any deficiencies on the part of the distributor;

      (iii) A statement of the effective date of the proposed cancellation or nonrenewal; and

      (iv) If deficiencies are identified by the grantor under subparagraph (ii) of this paragraph, a statement that the distributor may attempt to cure deficiencies that are identified as a basis for the cancellation or nonrenewal, as provided in § 11-1305 of this subtitle.

(c) Alteration of terms. -- Unless the parties agree to the contrary, neither a distributor nor a grantor may alter payment, credit, or delivery terms affecting the distributor during the period between the notice required under subsection (a) of this section and the proposed date of cancellation or nonrenewal, or during the period of cure described in § 11-1305 of this subtitle.

(d) Compliance not required. -- A grantor is not required to comply with the provisions of this section if the reason for the cancellation or nonrenewal includes any of the following:

   (1) For any items that are not in dispute, the failure of the distributor to pay the grantor for commercial goods received;

   (2) The actual or pending insolvency, the occurrence of an assignment for the benefit of creditors, or the bankruptcy of the distributor or of its parent entity or of any affiliated entity that has financial control over it;

   (3) A danger to the public health or safety caused by the distributor or any affiliated entity over which it has control;

   (4) Abandonment of the agreement by the distributor or any other matter which a court finds to be justification for a premature cancellation or nonrenewal;

   (5) Conduct by the distributor expressly prohibited under a written agreement that materially affects the relationship between the distributor and grantor;

   (6) Conduct by the distributor that materially alters the commercial viability of the grantor's commercial goods in the marketplace; or

   (7) Affirmative bad faith, dishonest, fraudulent, or illegal acts by the distributor.

(e) Applicability of notice and cure provisions. -- Notwithstanding any other provision of this section, the notice and cure provisions of this subtitle do not apply to a termination of a distributorship at the natural expiration of the specified term of a written contract that does not contemplate renewal options exercisable by either party.

HISTORY: 1993, ch. 453.