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.
135.066 Intoxicating liquor dealerships.
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
This chapter 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 Wis. 2d 696,
242 N.W.2d 176 (1976).
135.01 Annotation
This chapter covers only agreements entered into after April 5, 1974. Wipperfurth v. U-Haul Co. of Western Wis., Inc.
101 Wis. 2d 586,
304 N.W.2d 767 (1981).
135.01 Annotation
This chapter is constitutional; it may be applied to out-of-state dealers when 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
When a dealer did not comply with all the terms of acceptance of a 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 any of the following:
135.02(3)(a)
(a) 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(3)(b)
(b) A contract or agreement, either expressed or implied, whether oral or written, between 2 or more persons by which a wholesaler, as defined in
s. 125.02 (21), is granted the right to sell or distribute intoxicating liquor or use a trade name, trademark, service mark, logotype, advertising or other commercial symbol related to intoxicating liquor. This paragraph does not apply to dealerships described in
s. 135.066 (5) (a) and
(b).
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
A cartage agreement between an air freight company and a trucking company did not create a "dealership" under this chapter. Kania v. Airborne Freight Corp.
99 Wis. 2d 746,
300 N.W.2d 63 (1981).
135.02 Annotation
A manufacturer's representative was not a "dealership". Foerster, Inc. v. Atlas Metal Parts Co.
105 Wis. 2d 17,
313 N.W.2d 60 (1981).
135.02 Annotation
This chapter applies exclusively to dealerships that do business within the geographic confines of the state. Swan Sales Corp. v. Jos. Schlitz Brewing Co.
126 Wis. 2d 16,
374 N.W.2d 640 (Ct. App. 1985).
135.02 Annotation
Two guideposts for determining the existence of a "community of interest" under sub. (3) are: 1) a shared financial interest in the operation of the dealership or the marketing of a good or service; and 2) the degree of cooperation, coordination of activities and sharing of common goals in the the parties' relationship. Ziegler Co., Inc. v. Rexnord, Inc.
139 Wis. 2d 593,
407 N.W.2d 873 (1987).
135.02 Annotation
A substantial investment distinguishes a dealership from a typical vendee-vendor relationship; establishing a loss of future profits is not sufficient. Gunderjohn v. Loewen-America, Inc.
179 Wis. 2d 201,
507 N.W.2d 115 (Ct. App. 1993).
135.02 Annotation
Contracts between an HMO and chiropractors for the provision of chiropractic services to HMO members did not did not establish the chiropractors as dealerships under ch. 135. Bakke Chiropractic Clinic v. Physicians Plus Insurance,
215 Wis. 2d 600,
573 N.W.2d 542 (Ct. App.1997).
135.02 Annotation
A dealership is a contract or agreement establishing a particular sort of commercial relationship that encompasses an extraordinary diverse set of business relationships not limited to the traditional franchise. The focus of the analysis must be on whether the business relationship can be said to be situated in the state after examining a broad set of factors outlined by the court. Baldewein Company v. Tri-Clover, Inc. 2000 WI 20,
233 Wis. 2d 57,
606 N.W.2d 145. See also Baldewein Company v. Tri-Clover, Inc.
183 F. Supp. 2d 1116 (2002).
135.02 Annotation
When an otherwise protected party transfers a protected interest to a third party, a "community of interest" is destroyed and the 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 sizable 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
This chapter 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
If a grantor is losing substantial money under the dealership relationship, it may constitute "good cause" for changes in the contract, including termination. Morley-Murphy Co. v. Zenith Electronics, Inc.
142 F.3d 373 (1998).
135.02 Annotation
This chapter specifies who may take advantage of its protections through the terms "dealer" and "dealership" and obviates the need to resort to conflict of laws principles. Investment in the state without in-state sales does not bring a party within the coverage of the chapter. Generac Corp. v. Caterpillar, Inc.
172 F.3d 971 (1999).
135.02 Annotation
A manufacturer's right of approval of its distributors' subdistributors did not create a contractual relationship between the manufacturer and the subdistributor subject to this chapter. Praefke Auto Electric & Battery Company, Inc. v. Tecumsah Products Company, Inc. 255 F3d 460 (2001).
135.02 Annotation
The distinction between a dealer and a manufacturer's representative is discussed. Al Bishop Agency, Inc. v. Lithonia-Division of National Services, Inc.
474 F. Supp. 828 (1979).
135.02 Annotation
The employment relationship in question was not a "dealership". O'Leary v. Sterling Extruder Corp.
533 F. Supp. 1205 (1982).
135.02 Annotation
The plaintiff was not "dealer" since money advanced to the 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 under sub. (3) a "community of interest" 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
The plaintiff's investment in "goodwill" was not sufficient to afford it protection under this chapter. Team Electronics v. Apple Computer,
773 F. Supp. 153 (1991).
135.02 Annotation
The "situated in this state" requirement under sub. (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) when 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
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
A clause providing that the party who had drafted the contract and dictated all of its provisions was not a party to the contract was void, and that party was a grantor of a dealership. Praefke Auto Electric & Battery Co., Inc. v. Tecumseh Products, Co.
110 F. Supp. 2d 899 (2000).
135.02 Annotation
In search of a dealership definition: The teachings of Bush and Ziegler. Carter and Kendall. WBB Apr. 1988.
135.02 Annotation
The Wisconsin Fair Dealership Law's Territorial Imperative. Keeler. Wis. Law. Aug. 1999.
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
The choice of law clause in a dealership agreement was unenforceable. Bush v. National School Studios,
139 Wis. 2d 635,
407 N.W.2d 883 (1987).
135.025 Annotation
Federal law required the enforcement of an arbitration clause even though that clause did not provide the relief guaranteed by this chapter, contrary to this section and s. 135.05. Madison Beauty Supply v. Helene Curtis,
167 Wis. 2d 237,
481 N.W.2d 644 (Ct. App. 1992).
135.025 Annotation
A forum-selection clause in dealership agreement was not freely bargained for and was rendered ineffective under sub. (2) (b). Cutter v. Scott & Fetzer Co.
510 F. Supp. 905 (1981).
135.025 Annotation
The relinquishment of territory and the signing of guaranty agreement were changes insufficient to bring a 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 employee, 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 cancel, terminate, or no-renew a dealership if the dealer refuses to accept changes that are essential, reasonable, and not discriminatory. A dealer's failure to substantially comply with such changes constitutes good cause. Ziegler Co., Inc. v. Rexnor,
147 Wis. 2d 308,
433 N.W.2d 8 (1988).
135.03 Annotation
A drug supplier violated this section by terminating without good cause all dealership agreements with independently owned pharmacies in the state. Kealey Pharmacy & Home Care Service, Inc. v. Walgreen Co.
761 F.2d 345 (1985).
135.03 Annotation
This chapter did not apply to a grantor's action that was due to business exigencies unrelated to the dealer and was done in a nondiscriminatory manner. Remus v. Amoco Oil Co.
794 F.2d 1283 (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
A grantor's substantial loss of money under a dealership relationship may constitute "good cause" for changes in the contract, including termination. Morley-Murphy Co. v. Zenith Electronics, Inc.
142 F.3d 373 (1998).
135.03 Annotation
A change in credit terms was a change in a dealer's "competitive circumstances". Van v. Mobil Oil Corp.
515 F. Supp. 487 (1981).
135.03 Annotation
This section did not apply when a grantor withdrew in a nondiscriminatory fashion from a product market on a large geographic scale. A 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 a 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 this chapter in petroleum franchise cases. Baker v. Amoco Oil Co.,
761 F. Supp. 1386 (1991).
135.03 Annotation
When parties continue their relations after the term of a dealership contract has expired, the contract has been renewed for another period of the same length. Praefke Auto Electric & Battery Co., Inc. v. Tecumseh Products, Co.
110 F. Supp. 2d 899 (2000). Reversed on other grounds.
135.03 Annotation
Constructive Termination Under the Wisconsin Fair Dealership Law. Cross and Janssen. Wis. Law. June 1997.
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.
