Menu
Blog Banner Image

The Franchise Memorandum

New Jersey State Court Finds Constructive Termination of Dealer Violates New Jersey Franchise Practices Act

A New Jersey appeals court has held that the constructive termination of a dealer agreement violates the New Jersey Franchise Practices Act.  Maintainco, Inc. v. Mitsubishi Caterpillar Forklift Am., Inc., 2009 WL 2365960 (N.J. Super. A.D., July 30, 2009). Plaintiff Maintainco signed an agreement that, it believed, made it the exclusive Mitsubishi dealer in a designated territory in New Jersey. Mitsubishi subsequently appointed Mid-Atlantic as a dealer in the plaintiff’s territory, under terms that gave Mid-Atlantic a competitive advantage over the plaintiff.

The New Jersey appeals court agreed that the parties’ course of dealing, including their contracts, supported the conclusion that the plaintiff was the exclusive Mitsubishi dealer in the territory and that the appointment of Mid-Atlantic constituted a breach of the plaintiff’s exclusivity rights. The appellate court also agreed that stripping the plaintiff of its exclusivity rights constituted constructive termination and violated the statute. 

Email LinkedIn Twitter Facebook

The information contained in this post is provided to alert you to legal developments and should not be considered legal advice. It is not intended to and does not create an attorney-client relationship. Specific questions about how this information affects your particular situation should be addressed to one of the individuals listed. No representations or warranties are made with respect to this information, including, without limitation, as to its completeness, timeliness, or accuracy, and Lathrop GPM shall not be liable for any decision made in connection with the information. The choice of a lawyer is an important decision and should not be based solely on advertisements.

About this Publication

The Franchise Memorandum is a collection of postings on summaries of recent legal developments of interest to franchisors brought to you by Lathrop GPM LLP. 

To subscribe to monthly emails for The Franchise Memorandum, please click here

Topics

Archives

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

Blog Authors