Texas Business and Commerce Code
Sec. § 57.203
Good Cause Determination


For purposes of this subchapter, “good cause” means failure by a dealer to comply with requirements imposed on the dealer by the dealer agreement if the requirements are not different from those requirements imposed on other similarly situated dealers.


In addition to the good cause reason for termination stated in Subsection (a), good cause for termination of a dealer agreement exists when:


there has been a closeout or sale of a substantial part of the dealer’s assets related to the equipment business;


there has been commencement of a dissolution or liquidation of the dealer;


the dealer has changed its principal place of business or has added additional locations without the supplier’s prior approval, which shall not be unreasonably withheld;


the dealer has substantially defaulted under a chattel mortgage or other security agreement between the dealer and the supplier or there has been a revocation or discontinuance of a guarantee of a present or future obligation of the dealer to the supplier;


the dealer has failed to operate in the normal course of business for seven consecutive days or has otherwise abandoned its business;


the dealer has been convicted of or pleaded guilty to a felony affecting the relationship between the dealer and supplier; or


the dealer transfers an interest in the dealership or a person with a substantial interest in the ownership or control of the dealership, including an individual proprietor, partner, or major shareholder, withdraws from the dealership or dies, or a substantial reduction occurs in the interest of a partner or major shareholder in the dealership, provided, however, good cause does not exist if the supplier consents to an action described by this subdivision.
Added by Acts 2011, 82nd Leg., R.S., Ch. 1039 (H.B. 3079), Sec. 2, eff. September 1, 2011.
Last accessed
Aug. 5, 2020