# Commercial Law (GCL)

## Title 19. Equipment Dealer Contract Act

### Subtitle 1. Definitions; General Provisions

#### Section 19-101

(a) In this title, unless the context requires otherwise, the following words have the meanings indicated.

(b) "Contract" means a written or oral contract or agreement between a dealer and a wholesaler, manufacturer, or distributor by which:

  (1) The dealer is granted the right to sell or distribute goods or services; or

  (2) The dealer is granted the right to use a trade name, trademark, service mark, logo type, or advertising or other commercial symbol.

(c) "Current model" means a model listed in a wholesaler's, manufacturer's, or distributor's current sales manual or a supplement to the current sales manual.

(d) "Current net price" means the price listed in the supplier's price list or catalog in effect at the time the contract agreement is terminated, less any applicable discount allowed.

(e)

  (1) "Dealer" means a person engaged in the business of selling at retail construction, farm, utility, or industrial equipment, implements, machinery, attachments, outdoor power equipment, outdoor power sports equipment, or repair parts.

  (2) "Dealer" includes a person engaged in the business of selling, on commission or at retail, commercial heating, ventilation, and air-conditioning equipment or repair parts.

(f) "Family member" means a spouse, sibling, parent, grandparent, child, grandchild, mother-in-law, father-in-law, daughter-in-law, son-in-law, stepparent, or stepchild, or a lineal descendant of the dealer or principal owner of the dealership.

(g) "Good cause" means failure by a dealer to comply with requirements imposed on the dealer by a contract if the requirements are not different from requirements imposed on other dealers similarly situated in the State.

(h)

  (1) "Inventory" means farm implements or machinery, construction, utility, and industrial equipment, consumer products, outdoor power equipment, outdoor power sports equipment, attachments, or repair parts.

  (2) "Inventory" includes commercial heating, ventilation, and air-conditioning equipment or repair parts.

(i) "Net cost" means the price the dealer paid the supplier for the inventory, less all applicable discounts allowed, plus the amount the dealer paid for freight costs from the supplier's location to the dealer's location, plus the reasonable cost of assembly or disassembly performed by the dealer.

(j) "Outdoor power sports equipment" means the following vehicles and any attachments or repair parts for the following vehicles:

  (1) A motor-assisted or motor-driven vehicle that:

    (i) Is designed to carry only the operator of the vehicle on a seat or saddle designed to be straddled by the operator or is designed to carry only the operator of the vehicle and one passenger; and

    (ii) Is commonly known as an all-terrain vehicle;

  (2) A motorcycle that:

    (i) Is designed for off-highway operation and is not eligible for registration as a Class D (motorcycle) vehicle under the Transportation Article; and

    (ii) Is commonly known as a dirt bike; or

  (3) A snowmobile.

(k) "Superseded part" means a part that will provide the same function as a currently available part as of the date of cancellation of a contract.

(l) "Supplier" means:

  (1) A wholesaler, manufacturer, or distributor who enters into a contract with a dealer; or

  (2) A purchaser of assets or stock of a surviving corporation resulting from a merger or liquidation, a receiver or assignee, or a trustee of the original manufacturer, wholesaler, or distributor who enters into a contract with a dealer.

(m) "Termination" means the termination, cancellation, nonrenewal, or noncontinuation of a contract.

(n) "Utility" and "industrial", when used to refer to equipment, implements, machinery, attachments, or repair parts, have the meanings commonly used and understood among dealers and suppliers of farm equipment as a usage of trade.

#### Section 19-102

Good cause exists in any of the following circumstances:

(1) The filing of a petition against the dealer to commence:

  (i) A receivership proceeding; or

  (ii) A bankruptcy proceeding;

(2) The dealer has made an intentional misrepresentation with the intent to defraud the supplier;

(3) The dealer defaults under a chattel mortgage or other security agreement between the dealer and the supplier or the dealer revokes or discontinues a guarantee of a present or future obligation of the dealer to the supplier;

(4) The closeout or sale of a substantial part of the business of a dealer related to the handling of the products of the supplier;

(5) The commencement of procedures to dissolve or liquidate the dealer if the dealer is a partnership or corporation;

(6) A change, without the prior written approval of the supplier, that shall not be unreasonably withheld, in the location of the principal place of business of the dealer or additional locations set forth in the agreement;

(7) The withdrawal of an individual proprietor, partner, major shareholder, or manager of the dealership, or a substantial reduction in interest of a partner or major shareholder, without the prior written consent of the supplier;

(8) The revocation or discontinuance of any guarantee of the present or future obligations of the dealer to the supplier;

(9) The dealer fails to operate in the normal course of business for 7 consecutive business days or otherwise abandons the business;

(10) The guilty plea or conviction of a felony of a dealer affecting the relationship between the dealer and supplier; or

(11) The dealer transfers an interest in the dealership or a person with a substantial interest in the ownership or control of the dealership, including an individual proprietor, partner, or major shareholder, withdraws from the dealership or dies, or a substantial reduction occurs in the interest of a partner or major shareholder in the dealership.

#### Section 19-103

(a) 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.

(b)

  (1) Except as provided in paragraph (2) of this subsection, 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.

  (2) 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.

(c) Notwithstanding any agreement to the contrary, a dealer who terminates a contract with a supplier shall notify the supplier of the termination within 90 days prior to the effective date of the termination.

(d) Each notification required under this section shall:

  (1) Be in writing;

  (2) Contain:

    (i) A statement of intention to terminate the contract;

    (ii) A statement of the reasons for the termination; and

    (iii) The date on which the termination takes effect; and

  (3) Be delivered to the supplier or dealer by:

    (i) Certified mail; or

    (ii) Personal delivery.

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Md. Code Ann., Com. Law (as displayed at mgaleg.maryland.gov, October 16, 2026)