WILLIAM DONALD SCHAEFER, Governor                         Ch. 453

CHAPTER 453
(Senate Bill 505)

AN ACT concerning

Maryland Fair Distributorship Act

FOR the purpose of establishing the Maryland Fair Distributorship Act; requiring a
grantor of a wholesale distributorship that cancels a distributorship prior to the
natural expiration of its term or fails to renew the distributorship to provide the
distributor with a certain notice under certain circumstances; providing that a
distributor has an option to cure the deficiencies that caused the cancellation or
nonrenewal under certain circumstances; requiring that a grantor of a wholesale
distributorship to has the right to, and must at the option of the distributor,
repurchase certain merchandise sold to a distributor under certain circumstances;
providing for mandatory arbitration of certain disputes; providing for certain
exemptions from this Act; providing for the applicability of this Act; making the
provisions of this Act severable; defining certain terms; and generally relating to
wholesale distributorships.

BY adding to

Article - Commercial Law

Section 11-1301 through 11-1306, inclusive, to be under the new subtitle "Subtitle

13. Maryland Fair Distributorship Act"
Annotated Code of Maryland
(1990 Replacement Volume and 1992 Supplement)

Preamble

WHEREAS, The wholesale distribution industry is a significant and essential
segment of the Maryland economy;

WHEREAS, More than 5,000 wholesale distributor establishments in Maryland
employ in excess of 100,000 individuals and serve all areas of this State and the region;

WHEREAS, The Baltimore-Washington-Annapolis metropolitan area is ranked
as one of the top economic regions in the Nation in terms of purchasing power and overall
consumption, and the wholesale distribution industry has been a strong, healthy, and
efficient component of this economic success;

WHEREAS, Wholesale distributors do not manufacture the goods and products
they distribute but rather are granted rights to distribute goods and products by
grantors/manufacturers;

WHEREAS, Wholesale distributors have contributed to the strength of this
economy by making substantial investments in high technology distribution centers,
purchasing and maintaining distribution fleets, marketing and promoting the sale of

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