1. (a) A manufacturer or distributor, directly or through any authorized officer, agent, or employee, may not terminate, cancel, or fail to renew a manufacturer-dealer agreement without good cause. If the manufacturer or distributor with good cause terminates, cancels, or fails to renew the manufacturer-dealer agreement, § 8705 of this title does not apply.

2. (b) A manufacturer or distributor has the burden of showing good cause for terminating, canceling, or failing to renew a manufacturer-dealer agreement with a new recreational equipment dealer. For purposes of determining whether there is good cause for the proposed action, any of the following factors may be considered:

   1. (1) The extent of the affected new recreational equipment dealer’s penetration in the area of sales responsibility.
   2. (2) The nature and extent of the new recreational equipment dealer’s investment in its business.
   3. (3) The adequacy of the new recreational equipment dealer’s service facilities, equipment, parts, supplies, and personnel.
   4. (4) The effect of the proposed action on the community.
   5. (5) The extent and quality of the new recreational equipment dealer’s service under new recreational equipment warranties.
   6. (6) The new recreational equipment dealer’s failure to follow agreed-upon procedures or standards related to the overall operation of the dealership.
   7. (7) The new recreational equipment dealer’s performance under the terms of its manufacturer-dealer agreement.

3. (c) Except as otherwise provided in this chapter, a manufacturer or distributor shall provide a new recreational equipment dealer with at least 120 days prior written notice of termination, cancellation, or nonrenewal of the manufacturer-dealer agreement if the new recreational equipment dealer is being terminated, cancelled, or nonrenewed for good cause.

   1. (1) The notice must state all reasons for the proposed termination, cancellation, or nonrenewal and must further state that if, within 30 days following receipt of the notice, the new recreational equipment dealer provides to the manufacturer or distributor a written notice of intent to cure all claimed deficiencies, the new recreational equipment dealer will then be entitled to the full 120-day notice period, commencing from the new recreational equipment dealer’s receipt of the manufacturer’s or distributor’s original notice to rectify the deficiencies. If the deficiencies are rectified within the 120-day period, the manufacturer’s or distributor’s notice is voided. If the new recreational equipment dealer fails to provide the notice of intent to cure the deficiencies in the prescribed 30-day time period, the termination, cancellation, or nonrenewal takes effect 30 days after the new recreational equipment dealer’s receipt of the manufacturer’s or distributor’s original notice.

   2. (2) 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 good cause factors:

      1. a. A new recreational equipment dealer being convicted of, or entering a plea of nolo contendere to, a felony.
      2. b. The abandonment or closing of the business operations of the new recreational equipment 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 new recreational equipment dealer has no control.
      3. c. A significant misrepresentation by a new recreational equipment dealer that materially affects the business relationship between the new recreational equipment dealer and the manufacturer or distributor.
      4. d. A suspension or revocation of a new recreational equipment dealer’s license, or refusal to renew the new recreational equipment dealer’s license, by the Division of Motor Vehicles.
      5. e. A material violation of this chapter which the new recreational equipment dealer does not cure within 30 days after written notice by the manufacturer or distributor.
      6. f. A declaration by a new recreational equipment dealer of bankruptcy, insolvency, or the occurrence of an assignment for the benefit of creditors or bankruptcy.
4. (d) A new recreational equipment dealer may terminate, cancel, or not renew its manufacturer-dealer agreement with a manufacturer or distributor with or without good cause by giving 30-days written notice. In the case of a new recreational equipment dealer terminating, cancelling, or failing to renew a manufacturer-dealer agreement for good cause, the notice must state all the reasons for the proposed termination, cancellation, or nonrenewal, and must further state that if, within 30 days following receipt of the notice, the manufacturer or distributor provides to the new recreational equipment dealer a written notice of intent to cure all claimed deficiencies, the manufacturer or distributor will then be entitled to a 90-day notice period commencing from the manufacturer’s receipt of the new recreational equipment dealer’s original notice. If the deficiencies are rectified within the 90-day notice period, the new recreational equipment dealer’s notice is voided. If the manufacturer or distributor fails to provide the notice of intent to cure the deficiencies in the prescribed 30-day time period, the termination, cancellation, or nonrenewal takes effect 30 days after the manufacturer’s or distributor’s receipt of the new recreational equipment dealer’s original notice, unless the parties agree otherwise in writing.

5. (e) If the new recreational equipment dealer terminates, cancels or fails to renew a manufacturer-dealer agreement without good cause, the provisions of § 8705 of this title do not apply. If the new recreational equipment dealer terminates, cancels, or fails to renew the manufacturer-dealer agreement with good cause, § 8705 of this title applies. The new recreational equipment dealer has the burden of showing good cause. Any of the following items are considered “good cause” for a proposed termination, cancellation, or nonrenewal action by the new recreational equipment dealer:

   1. (1) A manufacturer or distributor being convicted of, or entering a plea of nolo contendere to, a felony.
   2. (2) The business operations of a manufacturer or distributor have been abandoned or closed for 10 consecutive business days, unless the closing is due to an act of God, strike, labor difficulty, or other cause over which the manufacturer has no control.
   3. (3) A significant misrepresentation by a manufacturer or distributor that materially affects the business relationship between the manufacturer and the new recreational equipment dealer.
   4. (4) A material violation of this chapter which the manufacturer or distributor does not cure within 30 days after written notice by the new recreational equipment dealer.
   5. (5) A declaration by a manufacturer or distributor of bankruptcy, insolvency, or the occurrence of an assignment for the benefit of creditors or bankruptcy.

85 Del. Laws, c. 437, § 1