Louisiana law adds dealer inventory requirement

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Louisiana Act 1043 was signed into law last week, requiring that Louisiana marine dealers who cancel contracts with manufacturers prove due cause before being eligible to have inventory repurchased by manufacturers, the National Marine Manufacturers Association reports.

The law goes into effect Jan. 1, 2011.

According to the legislation, due cause can be established if the manufacturer has made any misrepresentations in accepting the franchise, has engaged in unfair business practices or failed to comply with franchise terms, among other things.

Currently, a dealer does not have to determine due cause and can demand the repurchase of all boats, boat packages, parts and specialized tools when initiating the cancellation of a contract.

In keeping with current practice, if a manufacturer initiates the cancellation, it will be required to repurchase inventory.

Click here to read the full law.

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