CHAPTER 135
DEALERSHIP PRACTICES
135.025 Purposes; rules of construction; variation by contract.
135.03 Cancellation and alteration of dealerships.
135.04 Notice of termination or change in dealership.
135.045 Repurchase of inventories.
135.05 Application to arbitration agreements.
135.06 Action for damages and injunctive relief.
135.065 Temporary injunctions.
135.01
135.01
Short title. This chapter may be cited as the "Wisconsin Fair Dealership Law".
135.01 History
History: 1973 c. 179.
135.01 Annotation
Ch. 135 was enacted for the protection of the interests of the dealer, whose economic livelihood may be imperiled by the dealership grantor, whatever its size. Rossow Oil Co. v. Heiman, 72 W (2d) 696, 242 NW (2d) 176.
135.01 Annotation
This chapter covers only agreements entered into after April 5, 1974. Wipperfurth v. U-Haul Co. of Western Wis., Inc. 101 W (2d) 586, 304 NW (2d) 767 (1981).
135.01 Annotation
This chapter is constitutional; it may be applied to out-of-state dealers where provided by contract. C. A. Marine Sup. Co. v. Brunswick Corp. 557 F (2d) 1163. See: Boatland, Inc. v. Brunswick Corp. 558 F (2d) 818.
135.01 Annotation
Where dealer did not comply with all terms of acceptance of dealership agreement, no contract was formed and this chapter did not apply. Century Hardware Corp. v. Acme United Corp. 467 F Supp. 350 (1979).
135.01 Annotation
Dealing with the dealers: Scope of the Wisconsin fair dealership law. Axe, WBB Aug. 1981.
135.01 Annotation
The fair dealership law: Good cause for review. Riteris and Robertson, WBB March, 1986.
135.01 Annotation
Changing Business Strategy Under the Wisconsin Fair Dealership Law. Laufer. Wis. Law. March 1991.
135.02
135.02
Definitions. In this chapter:
135.02(1)
(1) "Community of interest" means a continuing financial interest between the grantor and grantee in either the operation of the dealership business or the marketing of such goods or services.
135.02(2)
(2) "Dealer" means a person who is a grantee of a dealership situated in this state.
135.02(3)
(3) "Dealership" means a contract or agreement, either expressed or implied, whether oral or written, between 2 or more persons, by which a person is granted the right to sell or distribute goods or services, or use a trade name, trademark, service mark, logotype, advertising or other commercial symbol, in which there is a community of interest in the business of offering, selling or distributing goods or services at wholesale, retail, by lease, agreement or otherwise.
135.02(4)(a)
(a) Failure by a dealer to comply substantially with essential and reasonable requirements imposed upon the dealer by the grantor, or sought to be imposed by the grantor, which requirements are not discriminatory as compared with requirements imposed on other similarly situated dealers either by their terms or in the manner of their enforcement; or
135.02(4)(b)
(b) Bad faith by the dealer in carrying out the terms of the dealership.
135.02(5)
(5) "Grantor" means a person who grants a dealership.
135.02(6)
(6) "Person" means a natural person, partnership, joint venture, corporation or other entity.
135.02 Annotation
Cartage agreement between air freight company and trucking company did not create "dealership" under this chapter. Kania v. Airborne Freight Corp. 99 W (2d) 746, 300 NW (2d) 63 (1981).
135.02 Annotation
Manufacturer's representative was not "dealership". Foerster, Inc. v. Atlas Metal Parts Co. 105 W (2d) 17, 313 NW (2d) 60 (1981).
135.02 Annotation
This chapter applies exclusively to dealerships that do business within geographic confines of state. Swan Sales Corp. v. Jos. Schlitz Brewing Co. 126 W (2d) 16, 374 NW (2d) 640 (Ct. App. 1985).
135.02 Annotation
Guideposts for determining existence of "community of interest" under (3) established. Ziegler Co., Inc. v. Rexnord, Inc. 139 W (2d) 593, 407 NW (2d) 873 (1987).
135.02 Annotation
A substantial investment distinguishes a dealership from a typical vendee-vendor relationship; establishing loss of future profits is not sufficient. Gunderjohn v. Loewen-America, Inc. 179 W (2d) 201, 507 NW (2d) 115 (Ct. App. 1993).
135.02 Annotation
Manufacturer's representative was not "dealer". Wilburn v. Jack Cartwright, Inc. 719 F (2d) 262 (1983).
135.02 Annotation
"Dealer" under (2) must be geographically "situated" in state. Bimel-Walroth Co. v. Raythem Co. 796 F (2d) 840 (6th Cir. 1986).
135.02 Annotation
"Situated in this state" language in (2) does not supersede choice of law analysis in determining whether ch. 135 applies. Diesel Service Co. v. Ambrose Intern. Corp. 961 F (2d) 635 (1992).
135.02 Annotation
When otherwise protected party transfers protected interest to third party, "community of interest" is destroyed and party removed from WFDL protection. Lakefield Telephone Co. v. Northern Telecom, Inc. 970 F (2d) 392 (1992).
135.02 Annotation
A community of interest exists when a large proportion of a dealer's revenues are derived from the dealership, or when the alleged dealer has made sizeable investments specialized in the grantor's goods or services. Frieburg Farm Equip. v. Van Dale, Inc. 978 F (2d) 395 (1992).
135.02 Annotation
There is no "community of interest" in the sale of services not yet in existence when the availability of the services is dependent on the happening of an uncertain condition. Simos v. Embassy Suites, Inc. 983 F (2d) 1404 (1993).
135.02 Annotation
Distinction between dealer and manufacturer's representative discussed. Al Bishop Agcy., Inc. v. Lithonia, etc. 474 F Supp. 828 (1979).
135.02 Annotation
Sales representative of manufacturer was not "dealership". E. A. Dickinson, Etc. v. Simpson Elec. Co. 509 F Supp. 1241 (1981).
135.02 Annotation
Manufacturer's representative was "dealership". Wilburn v. Jack Cartwright, Inc. 514 F Supp. 493 (1981).
135.02 Annotation
Employment relationship in question was not "dealership". O'Leary v. Sterling Extruder Corp. 533 F Supp. 1205 (1982).
135.02 Annotation
Manufacturer's representative was not "dealership". Quirk v. Atlanta Stove Works, Inc. 537 F Supp. 907 (1982).
135.02 Annotation
Manufacturer's representative was not "dealer". Aida Engineering, Inc. v. Red Stag, Inc. 629 F Supp. 1121 (1986).
135.02 Annotation
Plaintiff was not "dealer" since money advanced to company for fixtures and inventory was refundable. Moore v. Tandy Corp. Radio Shack Div. 631 F Supp. 1037 (1986).
135.02 Annotation
It is improper to determine whether a "community of interest" under (3) exists by examining the effect termination has on a division of the plaintiff. U.S. v. Davis, 756 F Supp. 1162 (1990).
135.02 Annotation
Plaintiff's investment in "goodwill" was not sufficient to afford it protection under ch. 135. Team Electronics v. Apple Computer, 773 F Supp. 153 (1991).
135.02 Annotation
The "situated in this state" requirement under (2) is satisfied as long as the dealership conducts business in Wisconsin. CSS-Wisconsin Office v. Houston Satellite Systems, 779 F Supp. 979 (1991).
135.02 Annotation
There is no "community of interest" under sub. (3) where there is an utter absence of "shared goals" or "cooperative coordinated efforts" between the parties. Cajan of Wisconsin v. Winston Furniture Co. 817 F Supp 778 (1993).
135.02 Annotation
Even if a person is granted a right to sell a product, the person is not a dealer unless that person actually sells the product. Smith v. Rainsoft, 848 F Supp. 1413 (1994).
135.02 Annotation
Taking away a dealership unilaterally due to alleged economic loss by the grantor, absent some dealer-related deficiency, is not "good cause". Morley-Murphy Co. v. Zenith Electronics Corp. 910 F Supp. 452 (1996). See also Satellite Receivers v. Household Bank, 922 F Supp. 174 (1996).
135.02 Annotation
Under sub. (3), de minimus use of a trade name or mark is insufficient: there must be substantial investment in it. Satellite Receivers v. Household Bank, 922 F Supp. 174 (1996).
135.02 Annotation
Chapter 135 does not protect a manufacturer's representative that lacks the unqualified authorization to sell or the authority to commit the manufacturer to a sale. Sales & Marketing Assoc., Inc. v. Huffy Corp. 57 F (3d) 602 (1995).
135.02 Annotation
In search of a dealership definition: The teachings of Bush and Ziegler. Carter and Kendall. WBB Apr. 1988.
135.025
135.025
Purposes; rules of construction; variation by contract. 135.025(1)(1) This chapter shall be liberally construed and applied to promote its underlying remedial purposes and policies.
135.025(2)
(2) The underlying purposes and policies of this chapter are:
135.025(2)(a)
(a) To promote the compelling interest of the public in fair business relations between dealers and grantors, and in the continuation of dealerships on a fair basis;
135.025(2)(b)
(b) To protect dealers against unfair treatment by grantors, who inherently have superior economic power and superior bargaining power in the negotiation of dealerships;
135.025(2)(c)
(c) To provide dealers with rights and remedies in addition to those existing by contract or common law;
135.025(2)(d)
(d) To govern all dealerships, including any renewals or amendments, to the full extent consistent with the constitutions of this state and the United States.
135.025(3)
(3) The effect of this chapter may not be varied by contract or agreement. Any contract or agreement purporting to do so is void and unenforceable to that extent only.
135.025 History
History: 1977 c. 171.
135.025 Annotation
Choice of law clause in employment contract was unenforceable. Bush v. National School Studios, 139 W (2d) 635, 407 NW (2d) 883 (1987).
135.025 Annotation
See note to 135.05 citing Madison Beauty Supply v. Helene Curtis, 167 W (2d) 237, 481 NW (2d) 644 (Ct. App. 1992).
135.025 Annotation
Forum-selection clause in dealership agreement was not freely bargained and so was rendered ineffective by (2) (b). Cutter v. Scott & Fetzer Co. 510 F Supp. 905 (1981).
135.025 Annotation
Relinquishment of territory and signing of guaranty agreement were changes insufficient to bring relationship under this law. Rochester v. Royal Appliance Mfg. Co. 569 F Supp. 736 (1983).
135.03
135.03
Cancellation and alteration of dealerships. No grantor, directly or through any officer, agent or employe, may terminate, cancel, fail to renew or substantially change the competitive circumstances of a dealership agreement without good cause. The burden of proving good cause is on the grantor.
135.03 History
History: 1973 c. 179;
1977 c. 171.
135.03 Annotation
Grantor may exercise options if dealer refuses to accept changes that are essential, reasonable and not discriminatory; dealer's failure to substantially comply with such changes constitutes good cause. Ziegler Co., Inc. v. Rexnor, 147 W (2d) 308, 433 NW (2d) 8 (1988).
135.03 Annotation
Drug supplier violated this section by terminating without good cause all dealership agreements with independently owned pharmacies in state. Kealey Pharmacy & Home Care Serv. v. Walgreen Co. 761 F (2d) 345 (1985).
135.03 Annotation
Where grantor's action was due to business exigencies unrelated to dealer and was done in nondiscriminatory manner, this chapter did not apply. Remus v. Amoco Oil Co. 794 F (2d) 1283 (7th Cir. 1986).
135.03 Annotation
Economic duress may serve as a basis for a claim of constructive termination of a dealership. JPM, Inc. v. John Deere, 94 F (3d) 270 (1996).
135.03 Annotation
Change in credit terms was change in dealer's "competitive circumstances". Van v. Mobil Oil Corp. 515 F Supp. 487 (1981).
135.03 Annotation
This section did not apply where grantor withdrew nondiscriminatorily from product market on large geographic scale; 90-day notice was required. St. Joseph Equipment v. Massey-Ferguson, Inc. 546 F Supp. 1245 (1982).
135.03 Annotation
Franchisees failed to meet their burden of proof that their competitive circumstances would be substantially changed by new agreement. Bresler's 33 Flavors Franchising Corp. v. Wokosin, 591 F Supp. 1533 (1984).
135.03 Annotation
Good cause for termination includes failure to achieve reasonable sales goals. L.O. Distributors, Inc., v. Speed Queen Co. 611 F Supp. 1569 (1985).
135.03 Annotation
Federal law preempts ch. 135 in petroleum franchise cases. Baker v. Amoco Oil Co., 761 F Supp. 1386 (1991).
135.03 Annotation
Taking away a dealership unilaterally due to alleged economic loss by the grantor, absent some dealer-related deficiency, is not "good cause". Morley-Murphy Co. v. Zenith Electronics Corp. 910 F Supp. 452 (1996). See also Satellite Receivers v. Household Bank, 922 F Supp. 174 (1996).
135.04
135.04
Notice of termination or change in dealership. Except as provided in this section, a grantor shall provide a dealer at least 90 days' prior written notice of termination, cancellation, nonrenewal or substantial change in competitive circumstances. The notice shall state all the reasons for termination, cancellation, nonrenewal or substantial change in competitive circumstances and shall provide that the dealer has 60 days in which to rectify any claimed deficiency. If the deficiency is rectified within 60 days the notice shall be void. The notice provisions of this section shall not apply if the reason for termination, cancellation or nonrenewal is insolvency, the occurrence of an assignment for the benefit of creditors or bankruptcy. If the reason for termination, cancellation, nonrenewal or substantial change in competitive circumstances is nonpayment of sums due under the dealership, the dealer shall be entitled to written notice of such default, and shall have 10 days in which to remedy such default from the date of delivery or posting of such notice.
135.04 History
History: 1973 c. 179.
135.04 Annotation
Grantor must give 90-day notice when termination is for nonpayment of sums due. White Hen Pantry v. Buttke, 100 W (2d) 169, 301 NW (2d) 216 (1981).
