Skip to main content
Find a Lawyer

Pennsylvania Statutes Title 63 P.S. Professions and Occupations (State Licensed) § 818.504. Termination, cancellation, nonrenewal and alteration of dealership by manufacturer

Current as of January 01, 2025 | Updated by Findlaw Staff

(a) General rule.--A manufacturer or distributor, directly or through an authorized officer, agent or employee, may terminate, cancel or fail to renew a manufacturer/dealer agreement with just cause. Section 506  1 shall not apply to this section.

(b) Burden of proof.--The manufacturer or distributor has the burden of showing just cause for terminating, canceling or failing to renew a manufacturer/dealer agreement with a dealer. For purposes of determining whether there is just cause for the proposed action, any of the following factors may be considered:

(1) The extent of the affected dealer's penetration in the area of sales responsibility compared to other similarly situated dealers and market conditions.

(2) The nature and extent of the dealer's investment in the dealer's business.

(3) The adequacy of the dealer's service facilities, equipment, parts, supplies and personnel.

(4) The effect of the proposed action on the community.

(5) The extent and quality of the dealer's service under recreational vehicle warranties.

(6) The dealer's failure to follow agreed-upon procedures or standards related to the overall operation of the dealership.

(7) The dealer's performance under the terms of its manufacturer/dealer agreement.

(c) Written notice required.--Except as otherwise provided in this section, a manufacturer or distributor shall provide a dealer with at least 90 days' prior written notice of termination, cancellation or nonrenewal of the manufacturer/dealer agreement in the event the dealer is being terminated for just cause. The following shall apply:

(1) The notice shall state all reasons for the proposed termination, cancellation or nonrenewal and shall state that, within 30 days following receipt of the notice, the dealer shall provide to the manufacturer or distributor written notice of intent to cure all claimed deficiencies. The dealer shall have 90 days following receipt of the original notice to rectify the deficiencies.

(2) If the deficiencies are rectified within 90 days, the manufacturer's or distributor's notice shall be voided. If the dealer fails to provide the notice of intent to cure the deficiencies in the prescribed time period or fails to cure the deficiencies in the time period provided, the termination, cancellation or nonrenewal shall take effect 30 days after the dealer's receipt of the original notice. If the dealer has new and untitled inventory on hand, it may be sold under section 506.

(d) Time period of notice.--The notice period may be reduced to 30 days if the manufacturer's or distributor's grounds for termination, cancellation or nonrenewal are due to any of the following just-cause factors:

(1) A dealer or one of its owners has been convicted of or has entered a plea of nolo contendere to a felony.

(2) The abandonment or closing of the business operations of the dealer for 10 consecutive business days unless the closing is due to an act of God, strike, labor difficulty or other cause over which the dealer has no control.

(3) A significant misrepresentation by the dealer materially affecting the business relationship.

(4) A suspension or revocation of the dealer's license or refusal to renew the dealer's license by the department.

(5) A material violation of this chapter which is not resolved within 30 days after the written notice by the manufacturer.

(e) Nonapplicability of notice.--The notice provisions of subsection (c) do not apply if the reason for termination, cancellation or nonrenewal is the dealer's insolvency, the occurrence of an assignment for the benefit of creditors or bankruptcy.

1 63 P.S. § 818.506.
Previous Part of Code Next Part of Code
Back to Chapter List

Cite this article: FindLaw.com - Pennsylvania Statutes Title 63 P.S. Professions and Occupations (State Licensed) § 818.504. Termination, cancellation, nonrenewal and alteration of dealership by manufacturer - last updated January 01, 2025 | https://codes.findlaw.com/pa/title-63-ps-professions-and-occupations-state-licensed/pa-st-sect-63-818-504/

FindLaw Codes may not reflect the most recent version of the law in your jurisdiction. Please verify the status of the code you are researching with the state legislature before relying on it for your legal needs.

Was this helpful?

Welcome to FindLaw's Cases & Codes

A free source of state and federal court opinions, state laws, and the United States Code. For more information about the legal concepts addressed by these cases and statutes, visit FindLaw’s Learn About the Law.

Go to Learn About the Law

Latest Blog Posts

For Legal Professionals

Learn About The Law

Get help with your legal needs

FindLaw’s Learn About the Law features thousands of informational articles to help you understand your options. And if you’re ready to hire an attorney, find one in your area who can help.

Go to Learn About the Law

Need to Find an Attorney?

Search our directory by legal issue

Enter information in one or both fields (Required)

Copied to clipboard