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AMI 2802 Definition—Good Cause

Arkansas Supreme Court Committee On Jury Instructions-Civil

Ark. Model Jury Instr., Civil AMI 2802
Arkansas Model Jury Instructions-Civil
December 2023 Update
Arkansas Supreme Court Committee On Jury Instructions-Civil
Chapter 28. Franchise Practices Act
AMI 2802 Definition—Good Cause
When I use the words “good cause” in these instructions, I mean the following:
[(1) Failure by a franchisee to comply substantially with the requirements imposed, or sought to be imposed, upon [him][her][it] by the franchisor, provided the requirements are not discriminatory as compared with the requirements imposed on other similarly situated franchisees, either as stated or as enforced;] [or]
[(2) Failure by the franchisee to act in good faith and in a commercially reasonable manner in carrying out the terms of the franchise;] [or]
[(3) Voluntary abandonment of the franchise;] [or]
[(4) Conviction of the franchisee of an offense substantially related to the business conducted pursuant to the franchise that was punishable by a term of imprisonment in excess of one (1) year;] [or]
[(5) Any act by a franchisee that substantially impairs the franchisor's trademark or trade name;] [or]
[(6) Institution of insolvency or bankruptcy proceedings by or against a franchisee, or any assignment or attempted assignment by a franchisee of the franchise or the assets of the franchise for the benefit of the creditors;] [or]
[(7) Loss of the [franchisor/franchisee]'s right to occupy the premises from which the franchise business is operated;] [or]
[(8) Failure of the franchisee to pay to the franchisor within ten (10) days after receipt of notice of any sums past due the franchisor and relating to the franchise.]
Use this instruction in conjunction with AMI 2800. Use only those elements that are justified by the evidence.
This instruction is based on Ark Code. Ann. § 4-72-202(7). In a case involving the question whether the market withdrawal of a product or of a trademark constitutes “good cause” to terminate a franchise under Ark. Code Ann. § 4-72-204(a)(1), the Arkansas Supreme Court, reciting the principle of statutory construction expressio unius est exclusio alterius, concluded that the statutory list is an exclusive one. Larry Hobbs Farm Equip., Inc. v. CNH Am., LLC, 375 Ark. 379, 385, 294 S.W.3d 190, 195 (2009). The court also found persuasive the Fourth Circuit’s earlier interpretation of Ark. Code Ann. § 4-72-202(7) in Volvo Trademark Holding Aktiebolaget v. Clark Mach. Co., 510 F.3d 474, 482-83 (4th Cir. 2007), as setting forth the exclusive means by which a franchisor can terminate a franchise for “good cause.” The court declined to address the question whether this interpretation raised constitutional concerns under the dormant Commerce Clause principle, an issue considered at length in the Volvo case. The court in Larry Hobbs Farm Equip., Inc., supra, also rejected two claims under the Farm Equipment Retailer Franchise Protection Act, Ark. Code Ann. § 4-72-301 et seq., for which there currently are no model jury instructions.
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