Session 2000
Effective: July 1, 2000
SENATE BILL No. 588
An Act concerning contracts for equipment; amending K.S.A.
16-1002, 16-1004, 16-1303,
16-1305, 16-1403, 16-1404 and 16-1405 and repealing the
existing sections.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 16-1002 is hereby
amended to read as follows: 16-
1002. (a) Whenever any person, firm or corporation engaged in the
busi-
ness of selling and retailing farm implements, machinery,
attachments or
repair parts therefor enters into a written or parol contract,
sales agree-
ment or security agreement evidenced by a franchise agreement
whereby
such retailer agrees to maintain a stock of parts or complete or
whole
implements, machines or attachments with any wholesaler,
manufacturer
or distributor of such implements, machinery, attachments or repair
parts,
and either such wholesaler, manufacturer or distributor or the
retailer
desires to cancel or discontinue the contract, such wholesaler,
manufac-
turer or distributor shall pay to such retailer or credit to such
retailer's
account, if the retailer has outstanding any sums owing the
wholesaler,
manufacturer or distributor, unless the retailer should desire to
keep such
merchandise, a sum equal to 100% of the net cost of all new,
unused,
undamaged, complete farm implements, machinery and attachments
and
85% 95% of the current net prices on new,
unused, undamaged repair
parts, including superseded parts, which implements, machinery,
attach-
ments and parts had previously been purchased from such
wholesaler,
manufacturer, distributor or transferee of such wholesaler,
manufacturer
or distributor if the transferee acquired substantially all of the
assets of
such wholesaler, manufacturer or distributor, and held by such
retailer
on the date of the cancellation or discontinuance of such contract.
The
wholesaler, manufacturer or distributor shall also pay such
retailer a sum
equal to 5% of the current net price of all parts returned for the
handling,
packing and loading of such parts for return to the wholesaler,
manufac-
turer or distributor, except that such 5% shall not be paid or
credited to
the retailer if the wholesaler, manufacturer or distributor elects
to per-
form the handling, packing, loading and transportation of the parts
itself.
Upon the payment or allowance of credit to the retailer's account
of the
sum required by this section, the title to such farm implements,
machin-
ery, attachments and repair parts therefor shall pass to the
manufacturer,
wholesaler or distributor making such payment, and such
manufacturer,
wholesaler or distributor shall be entitled to the possession of
such farm
implements, machinery, attachments or repair parts. All payments or
al-
lowances of credit due retailers shall be paid or credited within
60 days
after the return of implements, machinery, attachments or repair
parts.
After 60 days, all payments or allowances shall include interest at
the rate
prescribed by K.S.A. 16-204, and amendments thereto.
(b) The provisions of this section
relating to a retailer's right to cancel
or discontinue a contract and receive payment for implements,
machines,
attachments and parts returned shall apply to all contracts now in
effect
which have no expiration date and are a continuing contract, and
all other
contracts entered into or renewed after July 1, 1976. The
provisions for
a retailer to receive payment for implements, machines, attachments
and
parts returned shall apply only to implements, machines,
attachments and
parts purchased after the effective date of this act. Any contract
in force
and effect on July 1, 1976, which by its own terms will terminate
on a
date subsequent thereto shall be governed by the law as it existed
prior
to this act.
(c) The provisions of this section shall
not be construed to affect in
any way any security interest which the wholesaler, manufacturer or
dis-
tributor may have in the inventory of the retailer, except that any
repur-
chase hereunder shall not be subject to the provisions of the bulk
sales
law or to the claims of any secured or unsecured creditors of the
whole-
saler, manufacturer or distributor or any assignee of the
wholesaler, man-
ufacturer or distributor until such time the retailer has received
payment
in full subject to any offset the retailer may owe to the
wholesaler, man-
ufacturer or distributor.
Sec. 2. K.S.A. 16-1004 is hereby
amended to read as follows: 16-
1004. In the event that any manufacturer, wholesaler or distributor
of
farm implements, machinery, attachments or repair parts therefor,
upon
cancellation of a contract by either a retailer or a manufacturer,
whole-
saler or distributor, fails or refuses to make payment or allow
credit to
such retailer as required by K.S.A. 16-1002, and amendments
thereto,
such manufacturer, wholesaler or distributor shall be liable in a
civil action
to be brought by such retailer for one hundred percent
(100%) the actual
costs of the action, including attorney, paralegal and expert
witness fees;
for 100% of the net cost of such farm implements, machinery
and at-
tachments and eighty-five percent (85%)
100% of the current net price
of repair parts, plus five percent (5%) 5%
for handling, packing and load-
ing plus freight charges which have been paid by the retailer.
Sec. 3. K.S.A. 16-1303 is hereby
amended to read as follows: 16-
1303. (a) Whenever any retailer enters into a contract with a
supplier and
such supplier or retailer terminates, cancels, fails to renew, or
in fact
substantially discontinues such contract, such supplier shall pay
to such
retailer, or credit to such retailer's account, if and only to the
extent that
the retailer has outstanding sums owing the supplier, unless the
retailer
should desire to keep all or part of such merchandise, a sum equal
to
90% 100% of the net cost of all new,
unused, undamaged and complete
outdoor power equipment, including transportation charges which
have
been paid by such retailer, and 90% 95% of
the current net prices of
new, unused and undamaged repair parts which had previously been
pur-
chased from such supplier preceding the date of notification of the
ter-
mination, and held by such retailer on the date of the cancellation
or
discontinuance of such contract. The supplier also shall
pay such retailer
a sum equal to 5% of the current net price of all parts returned
for the
handling, packing and loading of such parts for return to the
supplier,
except that such 5% shall not be paid or credited to the
retailer if the
supplier elects to perform the handling, packing, loading and
transpor-
tation of the parts itself. Upon the payment of such sum,
the title and
right of possession of such outdoor power equipment and repair
parts
and other equipment shall then pass to the supplier making such
pay-
ment, and such supplier shall then be entitled to the possession of
such
outdoor power equipment and repair parts. All payments required to
be
made under the provisions of this section must be made within
90 60
days after the return of the outdoor power equipment, repair parts
or
other equipment. After 90 60 days, all
payments or allowances shall in-
clude interest calculated from the date of return at the rate
prescribed in
K.S.A. 16-204, and amendments thereto.
(b) The provisions of this section shall
not be construed to affect in
any way any security interest which the supplier may have in the
inventory
of the retailer, except that any repurchase hereunder shall not be
subject
to the provisions of the bulk sales law or to the claims of any
secured or
unsecured creditors of the supplier or any assignee or the supplier
until
such time the retailer has received payment in full, subject to any
offset
the retailer may owe to the supplier.
Sec. 4. K.S.A. 16-1305 is hereby
amended to read as follows: 16-
1305. In the event that any supplier, after such supplier or the
retailer
terminates, cancels, fails to renew, or in fact substantially
discontinues
such contract, fails or refuses to make payment to such retailer as
required
by the provisions of K.S.A. 16-1303, and amendments thereto,
such sup-
plier shall be liable in a civil action to the retailer for the
actual costs of
the action, including attorney, paralegal and expert witness fees;
for in-
terest as provided in K.S.A. 16-1303, and amendments
thereto; and for
100% of the net cost of such machinery, plus transportation charges
which
have been paid by the retailer; and for 100% of the current net
price of
the repair parts, plus 5% for handling, packing and loading plus
freight
charges which have been paid by the retailer. In any such
action, it shall
be the burden of the supplier to establish that the terms of K.S.A.
16-
1304, and amendments thereto, may apply to except any
particular item
of outdoor power equipment from the terms of K.S.A. 16-1303,
and
amendments thereto.
Sec. 5. K.S.A. 16-1403 is hereby
amended to read as follows: 16-
1403. (a) Whenever any retailer enters into a contract with a
supplier and
such supplier or retailer terminates, cancels, fails to
renew, or in fact
substantially discontinues such contract, such supplier shall pay
to such
retailer, or credit to such retailer's account, if and only to the
extent that
the retailer has outstanding sums owing the supplier, unless the
retailer
should desire to keep all or part of such merchandise, a sum equal
to
90% 100% of the net cost of all new,
unused, undamaged and complete
lawn and garden equipment, including transportation charges which
have
been paid by such retailer, and 90% 95% of
the current net prices of
new, unused and undamaged repair parts which had previously been
pur-
chased from such supplier preceding the date of notification of the
ter-
mination, and held by such retailer on the date of the cancellation
or
discontinuance of such contract. The supplier also shall
pay such retailer
a sum equal to 5% of the current net price of all parts returned
for the
handling, packing and loading of such parts for return to the
supplier,
except that such 5% shall not be paid or credited to the
retailer if the
supplier elects to perform the handling, packing, loading and
transpor-
tation of the parts itself. Upon the payment of such sum,
the title and
right of possession of such lawn and garden equipment and repair
parts
and other equipment shall then pass to the supplier making such
pay-
ment, and such supplier shall then be entitled to the possession of
such
lawn and garden equipment and repair parts. All payments required
to
be made under the provisions of this section must be made within
90 60
days after the return of the lawn and garden equipment, repair
parts or
other equipment. After 90 60 days, all
payments or allowances shall in-
clude interest calculated from the date of return at the rate
prescribed in
K.S.A. 16-204, and amendments thereto.
(b) The provisions of this section shall
not be construed to affect in
any way any security interest which the supplier may have in the
inventory
of the retailer, except that any repurchase hereunder shall not be
subject
to the provisions of the bulk sales law or to the claims of any
secured or
unsecured creditors of the supplier or any assignee or the supplier
until
such time the retailer has received payment in full, subject to any
offset
the retailer may owe to the supplier.
Sec. 6. K.S.A. 16-1404 is hereby
amended to read as follows: 16-
1404. The provisions of K.S.A. 16-1403, and amendments
thereto, shall
not require the repurchase from a retailer of any:
(a) Repair part which is in a broken or
damaged package;
(b) single repair part which is priced as
a set of two or more items;
(c) repair part which, because of its
condition, is not resalable as a
new part;
(d) inventory for which the retailer is
unable to furnish evidence,
satisfactory to the supplier, of title, free and clear of all
claims, liens and
encumbrances;
(e) inventory which the retailer desires
to keep, and for which the
retailer has a contractual right to do so;
(f) machines, equipment, and attachments
which are not in new, un-
used, undamaged, or complete condition;
(g) repair parts which are not in new,
unused, or undamaged condi-
tion;
(h) machines, equipment or attachments
which were purchased 12
24 months or more prior to notice of termination of the
contract;
(i) inventory which was ordered by the
retailer on or after the date
of notification of termination of the contract;
(j) inventory which was acquired by the
retailer from any source other
than the supplier or transferee of such supplier; or
(k) part that has been removed from an
engine or short block or piece
of equipment or any part purchased separately that has been mounted
or
installed by the retailer on an engine or on equipment.
Sec. 7. K.S.A. 16-1405 is hereby
amended to read as follows: 16-
1405. In the event that any supplier, after such supplier
terminates, can-
cels, fails to renew, or in fact substantially discontinues such
contract, fails
or refuses to make payment to such retailer as required by the
provisions
of K.S.A. 16-1403, and amendments thereto, such supplier
shall be liable
in a civil action to the retailer for the actual costs of the
action, including
attorney, paralegal and expert witness fees; for interest as
provided in
K.S.A. 16-1403, and amendments thereto; and
for 100% of the net cost
of such machinery, plus transportation charges which have been paid
by
the retailer; and for 100% of the current net price of the repair
parts,
plus 5% for handling, packing and loading plus freight charges
which
have been paid by the retailer. In any such action, it shall
be the burden
of the supplier to establish that the terms of K.S.A. 16-1404,
and amend-
ments thereto, may apply to except any particular item of
lawn and garden
equipment from the terms of K.S.A. 16-1403, and amendments
thereto.
Sec. 8. K.S.A. 16-1002, 16-1004,
16-1303, 16-1305, 16-1403, 16-
1404 and 16-1405 are hereby repealed.
Sec. 9. This act shall take effect
and be in force from and after its
publication in the statute book.