Equipment Dealer Contracts

Because of changes in the construction market, we have had, from time to time, clients move from providing contracting services to dealing equipment for their particular trade. Maryland has a specific set of statutes that govern contracts between dealers and suppliers. Here are some of the highlights.

- A supplier may not directly or through an officer, agent, or employee terminate, cancel, fail to renew, or substantially change the competitive circumstances of a contract without good cause.

- a supplier who terminates, cancels, fails to renew, or substantially changes the competitive circumstances of a contract with good cause is not required to provide any notice or the right to cure a deficiency to a dealer.

- However, if a supplier terminates, cancels, fails to renew, or substantially changes the competitive circumstances of a contract based upon the dealer's failure to capture the share of the market required in the contract and the supplier has worked with the dealer for a minimum of 12 months to gain the desired market share, the supplier shall provide a dealer with at least 90 days' written notice of the termination of the agreement and a 60 day right to cure.

- whenever a dealer enters into a contract in which the dealer agrees to maintain inventory and the contract is terminated by either party, the supplier shall repurchase the dealer's inventory on the terms specified in the statutes of this subtitle unless the dealer chooses to keep the inventory.


Consequently, any contract dealing in equipment should be carefully drafted to not run afoul of these Maryland statutes. For further questions, contact Matt Hjortsberg at hjortsberg@bowie-jensen.com or 410-583-2400.