Overview
The amendments to the Oklahoma Fair Practices of Equipment Manufacturers, Distributors, Wholesalers, and Dealers Act (Senate Bill 377) went into effect on November 1, 2025 (the “Amendments”). The Amendments contain new restrictions on buyer turndowns and new limits on enforcing dealer exclusivity.
The Amendments do not expressly apply to existing dealer agreements, and any argument otherwise would be challenging for a dealer.[1] But the amendments will apply to new agreements, and that is perhaps the most critical issue manufacturers need to be aware of.
What constitutes a “new agreement” is not a mechanical analysis. Courts have ruled that agreement modifications, renewals, or extensions are “new agreements” that trigger new legislation. The outcome will depend on the specific facts, and any manufacturer that prefers the pre-amended version of the statute would be wise to consider how their actions might create a “new agreement” before modifying, extending, or renewing an Oklahoma dealer agreement.
The Amendments
The Amendments provide that:
- A change in executive management is not good cause for termination “unless the supplier can demonstrate that the change is detrimental to the representation of the supplier’s products”;
- Manufacturers may not turn down a dealership sale unless it “would be detrimental to the representation of the supplier’s product,” replacing the much clearer rule allowing a turn down if the candidate does not meet reasonable and consistently applied requirements. The Amendments also put the burden on the manufacturer to show that the candidate would be detrimental;
- Preventing a dealer from representing a competing line or requiring a dealer to provide separate facilities for competing lines unless your line is 80% plus of the dealer’s equipment purchases and the dealer’s annual sales volume for your line is over $40,000,000 “for the five (5) calendar years immediately preceding the applicable determination date.” The $40,000,000 is subject to annual adjustment, and the statute does not address what happens if a dealer has represented your line for less than 5 years; and
- Removes an arguable statutory right to terminate when a dealer transfers the dealership without consent (if your dealer agreement gives you a consent right, however, then you may terminate for an unauthorized transfer).
What is a “New Agreement”
Because a “new agreement” will trigger the Amendments, manufacturers should know the basic principles applied in determining what constitutes a “new agreement.” The first is that, depending on the specific facts, a “new agreement” could include agreement modifications, extensions, or renewals.
There are no bright-line rules on what constitutes a “new agreement,” but courts generally do not consider minor changes to be a new agreement. Examples of minor changes are the dealer adopting a new corporate name or an administrative update, like a change of a manager’s home address.[2]
Also, if the agreement contemplates the change, courts are less likely to find a new agreement.[3] A common example is adding new products of the same line to the list of authorized products, which is frequently provided for in a dealer agreement.[4]
When confronted with the “new” agreement issue, courts evaluate whether modifications have “materially altered” the parties’ relationship.[5] Per usual, there are no bright-line rules on this question, so manufacturers concerned about the Amendments should be strategic about dealer agreement modifications, including in the context of a dealership sale.
Manufacturers should also be aware that courts tend to treat an agreement renewal differently than an agreement extension. A renewal is more likely to be found than a new agreement, an extension is less likely. Of course, this is not as simple as what word you use in the agreement.[6]
What Should Manufacturers Do?
The equipment dealer statutes are not amended frequently, and many non-lawyers are unlikely to be aware of retroactive application principles, so if manufacturers prefer the pre-amended version of the statute, they would be wise to caution their personnel to seek legal counsel before making any change to an existing dealer agreement.
Manufacturers who prefer the pre-amended statute should consider whether a dealer agreement change is a “material alteration” of the relationship or whether it is truly a change rather than some action contemplated by the dealer agreement. Manufacturers should be thoughtful about how they communicate with the dealer, as communications could be evidence of whether there is a “material alteration” that constitutes a “new agreement.”
Manufacturers should also think through strategies when a dealer sells its business, as that typically involves signing a new agreement with the buyer. There may be steps, even in that instance, that could preserve existing statutory rights.
Finally, if manufacturers think that Oklahoma is the canary in the coal mine on equipment dealer statute amendments, then revisiting form dealer agreements might make sense as well.
For additional information or guidance on how these amendments may affect your dealer agreements, please contact Steven J. Yatvin at steve.yatvin@bfkn.com or (312) 629-5192.
[1] In no small part because of the Contracts Clauses of the U.S. and Oklahoma constitutions, both of which prohibit laws that “impair[] the Obligation of Contracts.” U.S. Const. art. I, § 10, cl. 1; Okla. Const. art. II, § II-15.
[2] McKay Nissan, Ltd. v. Nissan Motor Corp. in U.S.A., 764 F. Supp. 1318, 1319 (N.D. Ill. 1991).
[3] In re Kerry Ford, Inc., 106 Ohio App. 3d 643, 651, 666 N.E.2d 1157, 1162 (1995).
[4] O.R.S. Distilling Co. v. Brown-Forman Corp., 972 F.2d 924, 927 (8th Cir. 1992).
[5] Subaru Distributors Corp. v. Subaru of Am., Inc., 47 F. Supp. 2d 451, 459 fn3 (S.D.N.Y. 1999).
[6] Jack Tyler Eng'g Co., Inc. v. SPX Corp., 294 Fed. Appx. 176, 180 (6th Cir. 2008).
