Opinion ID: 6347127
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Heading: Business and Commerce Code Chapter 57

Text: The Fair Practices of Equipment Manufacturers, Distributors, Wholesalers, and Dealers Act regulates the business relationships between manufacturers or suppliers of certain types of equipment and the independent dealers that sell the equipment to the public. Act of May 25, 2011, 82d Leg., R.S., ch. 1039, § 1, 2011 Tex. Gen. Laws 2646, 2646. The Act applies to a “dealer agreement,” which the Act defines as “an oral or written agreement or arrangement, of definite or indefinite duration, between a dealer and a supplier that provides for the rights and obligations of the parties with respect to the purchase or sale of equipment or repair parts.” TEX. BUS. & COM. CODE § 57.002(4). It provides that “[a] supplier may not terminate a dealer agreement without good cause.” Id. § 57.153.1 And it enumerates circumstances in 1 The Act contains separate subchapters dealing with termination of “single-line dealer agreements” and termination of “agreements other than single-line dealer agreements.” Id. §§ 57.151–.155, .201–.205; see also id. § 57.002(16) (defining “single-line dealer agreement”). Both parties cite to the 3 which good cause for termination of a dealer agreement exists. Id. § 57.154(a). The Act provides dealers a statutory remedy for violations. It states: If a supplier violates any provision of this chapter, a dealer may bring an action against the supplier in a court of competent jurisdiction for damages sustained by the dealer as a consequence of the supplier’s violation, including damages for lost profits, together with the actual costs of the action, including the dealer’s attorney’s fees and paralegal fees and the costs of arbitrators. Id. § 57.401(a). The statutory remedy is not exclusive and is in addition to any other remedy permitted by law or that may exist under the parties’ agreement. Id. §§ 57.401(b), .402. The Legislature passed the Act on May 25, 2011, and the Governor signed it into law the following month, on June 17, 2011. It took effect two and a half months later, on September 1, 2011. Act of May 25, 2011, § 5. The Act applies to all dealer agreements entered into or renewed on or after the Act’s effective date. Id. § 4(a)(1). A dealer agreement existing before September 1, 2011, is governed by the law in effect before then, unless it “has no expiration date” and “is a continuing contract.” Id. § 4(a)(2), (b). subchapter governing agreements other than single-line dealer agreements, so we assume without deciding that the parties’ agreement here is not a “singleline dealer agreement.” We note, however, that both subchapters similarly prohibit a supplier from terminating a dealer agreement without good cause. Id. §§ 57.153, .202. 4