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ARTICLE · 17 JUNE 2015

Repurchase Obligations Under Delaware's Equipment Dealer Contracts Statute

Fox Rothschild LLP
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In connection with an appeal pending in the United States Court of Appeals for the Third Circuit, a question of law was certified to the Delaware Supreme Court.

United StatesLitigation, Mediation & Arbitration

In connection with an appeal pending in the United States Court of Appeals for the Third Circuit ("Third Circuit"), a question of law was certified to the Delaware Supreme Court. Specifically, the Third Circuit asked the following question regarding the Equipment Dealer Contracts Statute (6 Del. C. § 2720, et seq.)("Dealer Statute") :

Does a supplier's repurchase obligation under § 2723(a) of the Dealer Statute extend to used inventory or is it limited to "new, unused, undamaged and complete inventory" under § 2723(b)?

Cases involving statutory construction are always interesting, and this case was no exception. In the end, the Court concluded:

a supplier's repurchase obligation under the Dealer Statute is limited to new, unused, undamaged and complete inventory, consistent with the statutory scheme, the canon of avoiding unnecessary statutory gap-filling, and our preference to avoid interpretations that could invite constitutional entanglements.

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