Equipment manufacturers employ various strategies to market their products, including company-owned stores or franchises. Historically, these methods have not proven as effective or consumer-responsive as independently-controlled and operated distribution companies. In the intricate landscape of the equipment industry, manufacturers and distributors must adeptly navigate a multifaceted legal environment. Mere success in selling, renting, and servicing equipment is no longer sufficient; owners and operators must also be mindful of product liability, employment regulations, workplace safety, contracts, and environmental concerns.
This book delves into one of the intricate legal issues affecting equipment distributors: state laws that govern the relationship between distributors and manufacturers. These laws have perpetually been a topic of debate. Advocates argue that an inherent power imbalance in the distributor-manufacturer relationship necessitates protective statutes to ensure fairness and mitigate legal and financial risks borne by dealers. Conversely, opponents contend that most dealership agreements are equitable and that legislative intervention constitutes unwarranted interference, potentially hindering efforts to enhance distributor networks and customer service. They emphasize that entering into a dealer contract is a voluntary choice, and distributors can seek alternative manufacturers if contract terms are unsatisfactory.
Both sides present compelling arguments. Regardless of one's stance, the proliferation of state dealer laws nationwide is an undeniable reality. The initial edition of this book, published in 1990, documented 43 statutes from 38 states. In this edition, we encompass over 70 statutes from 48 states that have enacted legislation impacting the distributor-manufacturer relationship. As of June 2020, only Hawaii, the District of Columbia, and New Jersey had not enacted specific dealer laws for the equipment industry.
Given the contentious nature of dealer statutes, the Association of Equipment Distributors (AED) adopts a neutral position regarding their enactment. This compilation does not endorse any specific statute or legislative solution to the intricate dynamics between manufacturers and dealers. Its purpose is to inform AED's members of developments in dealer protection legislation nationwide and provide all stakeholders in the equipment industry a comprehensive understanding of their rights and responsibilities under the law.