                                 CODE OF VIRGINIA

CANCELLATION (§ 59.1-354)

A. Notwithstanding the terms, provisions or conditions of any agreement, no
supplier shall unilaterally amend, cancel, terminate or refuse to continue to
renew any agreement, or unilaterally cause a dealer to resign from an agreement,
unless the supplier has first complied with the provisions of § 59.1-355, and
good cause exists for amendment, termination, cancellation, nonrenewal,
noncontinuance or causing a resignation. &#8220;Good cause&#8221; shall not
include the sale or purchase of a supplier. &#8220;Good cause&#8221; shall be
limited to withdrawal by the supplier, its successors and assigns, of the sale
of its products in Virginia, or dealer performance deficiencies including, but
not limited to, the following:

   1. Bankruptcy or receivership of the dealer;

   2. Assignment for the benefit of creditors or similar disposition of the
   assets of the dealer, other than the creation of a security interest in the
   assets of a dealer for the purpose of securing financing in the ordinary
   course of business; or

   3. Failure by the dealer to substantially comply, without reasonable cause or
   justification, with any reasonable and material requirement imposed upon him
   in writing by the supplier including, but not limited to, a substantial
   failure by a dealer to (i) maintain a sales volume or trend of his
   supplier&#8217;s product line or lines comparable to that of other similarly
   situated dealers of that product line, or (ii) render services comparable in
   quality, quantity or volume to the services rendered by other dealers of the
   same product or product line similarly situated.
   				In any determination as to whether a dealer has failed to substantially
   comply, without reasonable excuse or justification, with any reasonable and
   material requirement imposed upon him by the supplier, consideration shall be
   given to the relative size, population, geographical location, number of
   retail outlets and demand for the products applicable to the market area of
   the dealer in question and to comparable market area.

B. No supplier shall be required to give notice or show good cause pursuant to
subsection A of this section to unilaterally amend agreements with dealers to
comply with federal or state law or, where not inconsistent with this chapter,
to uniformly amend agreements as to all dealers of the supplier in question in
all states in which the supplier is marketing its products.

C. In any dispute as to whether a supplier has acted with good cause as required
by this section the supplier shall have the burden of proof to establish that
good cause existed.

HISTORY: 1988, c. 73.