1993 LAWS OF MARYLAND

manufacturers' goods and products, providing for warranties and service centers, carrying
large inventories of manufacturers' goods, products, and replacement parts, and by
extending financing to retailers by carrying accounts receivable;

WHEREAS, Much of the investment by wholesale distributors is made in reliance
on agreements with grantors that the distributors will continue to be authorized to carry
the grantors' goods and products;

WHEREAS, The General Assembly finds and declares that it is necessary to
define the relationships and responsibilities of wholesale distributors and grantors to
protect the economic well-being of this important segment of Maryland's economy and to
prevent disruption in the distribution network providing goods and products to the State's
consumers;

WHEREAS, The General Assembly has previously established statutory
protection for several similar types of business relationships, including those dealing with
franchises, business opportunities, and the distribution of automobiles, farm equipment
and motor fuel;

WHEREAS, The General Assembly finds and declares that this Act is necessary
to promote fair and equitable business relationships between grantors and wholesale
distributors; now, therefore,

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:

Article - Commercial Law                                         

SUBTITLE 13. MARYLAND FAIR DISTRIBUTORSHIP ACT

11-1301.                                                             

(A)     IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS
INDICATED.                                                                                                  

(B)     "AGREEMENT" MEANS A CONTRACT OR OTHER AGREEMENT BETWEEN A
GRANTOR AND A DISTRIBUTOR.

(C)     (1) "CANCEL" MEANS TO RESCIND OR OTHERWISE CANCEL TERMINATE
AN AGREEMENT PRIOR TO THE NATURAL EXPIRATION DATE OF ITS TERM.

(2) "CANCEL" INCLUDES A DE FACTO CANCELLATION.

(D)     "DE FACTO CANCELLATION" MEANS ACTIONS TAKEN BY THE GRANTOR
THAT:

(1) MATERIALLY ALTER THE COMPETITIVE BUSINESS AND ECONOMIC
CONDITIONS OF A DISTRIBUTOR AND, THAT-

(2) ARE NOT APPLICABLE TO SIMILARLY SITUATED DISTRIBUTORS OF
THAT GRANTOR'S PRODUCTS; AND THAT; AND

(3) ARE INTENDED TO BE DISCRIMINATORY AND DETRIMENTAL TO
THE DISTRIBUTOR.                                                                           

- 2416 -

Ch. 453