{"data":{"id":"us-ok/okla.-stat.-tit.-37a-37a-3-111","jurisdiction":"us-ok","citation":"Okla. Stat. tit. 37A, § 37A-3-111","heading":"Termination of distribution agreement - Requirements -","body":"Immediate termination - Transfer of brand to successor brewer.\n\nA. Except as provided in subsection G of this section, a small\n\nbrewer is not subject to the termination provisions of this section.\n\nB. 1. Except as provided in subsection C of this section, no\n\nbrewer shall terminate a distributor agreement with any beer\n\ndistributor without establishing good cause for such termination and\n\nunless all of the following occur:\n\na. the beer distributor receives written notification by\n\ncertified mail, return receipt requested, from the\n\nbrewer stating with specificity the alleged\n\nnoncompliance with the provisions of the agreement and\n\nis afforded no less than sixty (60) days in which to\n\ncure such noncompliance. If not capable of being\n\ncured within the sixty-day period, the beer\n\ndistributor shall begin the cure within the sixty-day\n\nperiod and diligently pursue the cure as promptly as\n\nfeasible,\n\nb. the beer distributor fails to cure such noncompliance\n\nwithin the allotted cure period, and\n\nc. the brewer provides written notice by certified mail,\n\nreturn receipt requested, to the beer distributor of\n\nsuch continued noncompliance. The notification shall\n\ncontain a statement of the intention of the brewer to\n\nterminate the distributor agreement, the reasons for\n\nthe termination, and the date the termination shall\n\ntake effect.\n\n2. If a beer distributor cures an alleged noncompliance within\n\nthe cure period provided in subparagraph a of paragraph 1 of this\n\nsubsection, any notice of termination from a brewer to a beer\n\ndistributor shall be null and void.\n\nC. A brewer may immediately terminate a distributor agreement,\n\neffective upon furnishing written notification to the beer\n\ndistributor by certified mail, return receipt requested, for any of\n\nthe following reasons:\n\n1. The beer distributor’s failure to pay any account when due\n\nand upon written demand by the brewer for such payment, in\n\naccordance with agreed payment terms;\n\n2. The assignment or attempted assignment by the beer\n\ndistributor for the benefit of creditors, the institution of\n\nproceedings in bankruptcy by or against the beer distributor, the\n\ndissolution or liquidation of the beer distributor, or the\n\ninsolvency of the beer distributor;\n\n3. The revocation or suspension of, or the failure to renew for\n\na period of more than fourteen (14) days, a beer distributor’s\n\nstate, local, or federal license or permit to sell beer in this\n\nstate;\n\n4. The beer distributor has been convicted of a felony that, in\n\nthe brewer’s sole judgment, adversely affects the goodwill of the\n\nbeer distributor or brewer; provided, however, an existing\n\nstockholder or stockholders, partner or partners, or member or\n\nmembers shall have the right to purchase the stock, partnership\n\ninterest, or membership interest of the offending stockholder,\n\npartner, or member prior to the conviction of the offending\n\nstockholder, partner, or member, subject to brewer’s approval, which\n\nshall not be unreasonably withheld, and if the sale is completed\n\nprior to conviction, the provisions of this paragraph shall not\n\napply;\n\n5. A beer distributor has been convicted of, found guilty of,\n\nor pled guilty or nolo contendere to a charge of violating a law or\n\nregulation of the United States or of this state if it materially\n\nand adversely affects the ability of the beer distributor or brewer\n\nto continue to sell its beer in this state;\n\n6. Any attempted transfer or change in beneficial ownership of\n\nten percent (10%) or more of the beer distributor, stock of the beer\n\ndistributor, or stock of any parent corporation of the beer\n\ndistributor, or any change in the ownership or control of any entity\n\nhaving control of the beer distributor, without obtaining the prior\n\nwritten approval of the brewer, which may not be unreasonably\n\nwithheld and shall be based on objective requirements imposed on all\ne beer\n\ndistributor, or stock of any parent corporation of the beer\n\ndistributor, or any change in the ownership or control of any entity\n\nhaving control of the beer distributor, without obtaining the prior\n\nwritten approval of the brewer, which may not be unreasonably\n\nwithheld and shall be based on objective requirements imposed on all\n\nother distributors, except as may otherwise be permitted pursuant to\n\na written agreement between the parties;\n\n7. Fraudulent conduct, by or on the part of the beer\n\ndistributor or any owner of the beer distributor, or by any employee\n\nas to which the beer distributor or any of its owners or its senior\n\nmanagement knew or reasonably should have known, in the beer\n\ndistributor’s dealings with the brewer of beer, including the\n\nintentional sale of beer outside the brewer’s established quality\n\nstandards; provided, however, in the case of fraudulent conduct by a\n\nbeer distributor employee other than the owner or senior management\n\nand only in the event the beer distributor was unaware or should not\n\nhave been aware of such fraudulent conduct, the beer distributor\n\nshall be allowed a sixty-day cure period following written notice of\n\nsuch conduct from the brewer, and shall only be terminated for\n\nfailing to cure the same within sixty (60) days thereof;\n\n8. Cessation of the beer distributor to conduct business for\n\nfive (5) consecutive business days, unless conducting the business\n\nis prevented or rendered impractical due to events beyond the\n\ndistributor’s reasonable control as a result of an act of God, an\n\ninsured casualty, war, or a condition of national, state, or local\n\nemergency; or\n\n9. Any intentional sale of beer, directly or indirectly, to\n\ncustomers located outside the territory assigned to the beer\n\ndistributor by the brewer unless expressly authorized by the brewer.\n\nD. Any beer distributor terminated by a brewer under subsection\n\nB of this section shall have the opportunity to sell the brewer’s\n\nbrand rights for one hundred twenty (120) days after termination in\n\naccordance with the distributor agreement. If no such sale occurs,\n\nthe brewer’s newly appointed distributor shall pay the beer\n\ndistributor the fair market value of the distribution rights, which\n\nwill be lost or diminished by reason of termination, and the newly\n\nappointed distributor shall purchase any remaining unexpired\n\ninventory for laid in cost. If the parties cannot agree on the fair\n\nmarket value, the parties shall follow the same procedures as set\n\nforth in paragraphs 2 through 6 of subsection G of this section.\n\nE. The brewer shall have the right to terminate an agreement\n\nwith a beer distributor at any time by giving the beer distributor\n\nat least ninety (90) days’ written notice by certified mail, return\n\nreceipt requested; provided, the brewer shall give a similar notice\n\nto all beer distributors in all other states with which the brewer\n\nhas a distributor agreement.\n\nF. 1. If a particular brand of beer is transferred by purchase\n\nor otherwise from a brewer to a successor brewer, the successor\n\nbrewer shall become obligated to all of the terms and conditions of\n\nthe agreement in effect on the date of succession. This subsection\n\napplies regardless of the character or form of the succession. A\n\nsuccessor brewer has the right to contractually require its beer\n\ndistributor to comply with operational standards of performance, if\n\nthe standards are uniformly established for all of the successor\n\nbrewer’s distributors. Provided, however, where the successor\n\nbrewer holds a brewer’s license in the state as of January 1, 2023,\n\nand has an existing distribution agreement with a beer distributor,\n\nthe successor brewer may terminate the distribution agreement, in\n\nwhole or in part, in order to transfer the brand rights to the\n\nsuccessor brewer’s beer distributor with at least sixty (60) days’\nbrewer’s distributors. Provided, however, where the successor\n\nbrewer holds a brewer’s license in the state as of January 1, 2023,\n\nand has an existing distribution agreement with a beer distributor,\n\nthe successor brewer may terminate the distribution agreement, in\n\nwhole or in part, in order to transfer the brand rights to the\n\nsuccessor brewer’s beer distributor with at least sixty (60) days’\n\nwritten notice to the terminated distributor and with termination\n\neffective upon payment to the terminated beer distributor the fair\n\nmarket value of the terminated beer distributor’s business with\n\nrespect to the terminated brand or brands.\n\n2. A successor brewer may, upon written notice, terminate its\n\nagreement, in whole or in part, with a beer distributor of the\n\nbrewer it succeeded, for the purpose of transferring the\n\ndistribution rights in the beer distributor’s territory to a new\n\nbeer distributor, provided that the successor beer distributor first\n\npays to the existing beer distributor the fair market value of the\n\nexisting distributor’s business with respect to the terminated brand\n\nor brands.\n\n3. If the successor brewer decides to terminate its agreement\n\nwith the existing beer distributor for purposes of transfer, the\n\nsuccessor brewer shall notify the existing beer distributor in\n\nwriting of the successor brewer’s intent not to appoint the existing\n\nbeer distributor for all or part of the existing beer distributor’s\n\nterritory. The successor brewer shall mail the notice of\n\ntermination by certified mail, return receipt requested, to the\n\nexisting beer distributor. The successor brewer shall include in\n\nthe notice the names, addresses, and telephone numbers of the\n\nsuccessor beer distributor or distributors.\n\n4. a. the successor beer distributor shall negotiate with\n\nthe existing beer distributor to determine the fair\n\nmarket value of the existing beer distributor’s right\n\nto distribute in the existing beer distributor’s\n\nterritory. The successor beer distributor and the\n\nexisting beer distributor shall negotiate the fair\n\nmarket value in good faith, and\n\nb. the existing beer distributor shall continue to\n\ndistribute in good faith until payment of the\n\ncompensation agreed to under subparagraph a of this\n\nparagraph, or awarded under paragraph 5 of this\n\nsubsection, is received.\n\n5. a. if the successor beer distributor and the existing\n\nbeer distributor fail to reach a written agreement on\n\nthe fair market value within thirty (30) days after\n\nthe existing beer distributor receives the notice\n\nrequired pursuant to paragraph 2 of this subsection,\n\nthe successor beer distributor or the existing beer\n\ndistributor shall send a written notice to the other\n\nparty requesting arbitration pursuant to the Uniform\n\nArbitration Act, Part 2 of Article 22 of Title 13,\n\nC.R.S. Arbitration shall be held for the purpose of\n\ndetermining the fair market value of the existing beer\n\ndistributor’s right to distribute in the existing beer\n\ndistributor territory,\n\nb. notice of intent to arbitrate shall be sent, as\n\nprovided in subparagraph a of this paragraph, not\n\nlater than forty (40) days after the existing beer\n\ndistributor receives the notice required pursuant to\n\nparagraph 2 of this subsection. The arbitration\n\nproceeding shall conclude not later than sixty (60)\n\ndays after the date the notice of intent to arbitrate\n\nis mailed to a party, unless this time is extended by\n\nmutual agreement of the parties and the arbitrator,\n\nc. any arbitration held pursuant to this subsection shall\n\nbe conducted in a city within this state that:\n\n(1) is closest to the existing beer distributor, and\nection. The arbitration\n\nproceeding shall conclude not later than sixty (60)\n\ndays after the date the notice of intent to arbitrate\n\nis mailed to a party, unless this time is extended by\n\nmutual agreement of the parties and the arbitrator,\n\nc. any arbitration held pursuant to this subsection shall\n\nbe conducted in a city within this state that:\n\n(1) is closest to the existing beer distributor, and\n\n(2) has a population of more than twenty thousand\n\n(20,000) people according to the latest Federal\n\nDecennial Census,\n\nd. any arbitration held pursuant to this paragraph shall\n\nbe conducted before one impartial arbitrator to be\n\nselected by the American Arbitration Association (AAA)\n\nor its successor. The arbitration shall be conducted\n\nin accordance with the rules and procedures of the\n\nUniform Arbitration Act, Part 2 of Article 22 of Title\n\n13, C.R.S. The AAA arbitrator shall have no fewer\n\nthan fifteen (15) years of experience in franchise law\n\nand shall use the laws of the state where the\n\ndistributor is located and shall not use other state\n\nlaws in his or her reviews,\n\ne. an arbitrator’s award in any arbitration held pursuant\n\nto this paragraph shall be monetary only and shall not\n\nenjoin or compel conduct. Any arbitration held\n\npursuant to this paragraph shall be in lieu of all\n\nother remedies and procedures,\n\nf. the cost of the arbitrator and any other direct costs\n\nof an arbitration held pursuant to this paragraph\n\nshall be equally divided by the parties engaged in the\n\narbitration. All other costs shall be paid by the\n\nparty incurring them,\n\ng. the arbitrator in any arbitration held pursuant to\n\nthis paragraph shall render a written decision not\n\nlater than thirty (30) days after the conclusion of\n\nthe arbitration, unless this time is extended by\n\nmutual agreement of the parties and the arbitrator.\n\nThe decision of the arbitrator is final and binding on\n\nthe parties, but questions of error of law may be\n\nappealed by either party to a state or federal court\n\nin the state where the distributor is located. The\n\narbitrator’s award may be enforced by commencing a\n\ncivil action in any court of competent jurisdiction.\n\nUnder no circumstances may the parties appeal the\n\ndecision of the arbitrator,\n\nh. an existing beer distributor or successor beer\n\ndistributor who fails to participate in the\n\narbitration hearings in any arbitration held pursuant\n\nto this paragraph waives all rights the existing beer\n\ndistributor or successor beer distributor would have\n\nhad in the arbitration and is considered to have\n\nconsented to the determination of the arbitrator, and\n\ni. if the existing beer distributor does not receive\n\npayment from the successor beer distributor of the\n\nsettlement or arbitration award required under\n\nsubparagraph e through g of this paragraph within\n\nthirty (30) days after the date of the settlement or\n\narbitration award:\n\n(1) the existing beer distributor shall remain the\n\nbeer distributor in the existing beer\n\ndistributor’s territory to at least the same\n\nextent that the existing beer distributor\n\ndistributed the beer immediately before the\n\nsuccessor brewer acquired rights to the brand,\n\nand\nubparagraph e through g of this paragraph within\n\nthirty (30) days after the date of the settlement or\n\narbitration award:\n\n(1) the existing beer distributor shall remain the\n\nbeer distributor in the existing beer\n\ndistributor’s territory to at least the same\n\nextent that the existing beer distributor\n\ndistributed the beer immediately before the\n\nsuccessor brewer acquired rights to the brand,\n\nand\n\n(2) the existing beer distributor is not entitled to\n\nthe settlement or arbitration award.\n\nG. 1. In addition to termination rights that may be set forth\n\nin a distributor agreement, a small brewer may terminate a\n\ndistributor agreement with any beer distributor; provided, that\n\nprior to the effective date of the termination, the small brewer\n\npays the beer distributor the fair market value of the distribution\n\nrights which will be lost or diminished by reason of the termination\n\nand purchases, or requires the newly appointed distributor to\n\npurchase, any remaining unexpired inventory for laid in cost.\n\n2. If such small brewer and beer distributor cannot mutually\n\nagree to the fair market value of the applicable distribution rights\n\nlost or diminished by reason of the termination, then the brewer\n\nshall pay the beer distributor a good-faith estimate of the fair\n\nmarket value of the applicable distribution rights.\n\n3. If the beer distributor being terminated under paragraph 2\n\nof this subsection disputes that the payment made by the small\n\nbrewer was less than the fair market value of the distribution\n\nrights, then the beer distributor may within forty-five (45) days of\n\ntermination submit the question of fair market value of the\n\napplicable distribution rights lost or diminished by reason of the\n\ntermination to binding arbitration before a panel of three neutral\n\narbitrators appointed in accordance with the commercial arbitration\n\nrules of the American Arbitration Association, which panel shall\n\ndetermine by majority decision whether the small brewer’s payment\n\nmeets the requirements of paragraph 2 of this subsection.\n\n4. If the arbitration panel rules that the payment made by the\n\nsmall brewer to the beer distributor upon termination was less than\n\nthe fair market value of distribution rights lost or diminished by\n\nreason of the termination, then the small brewer shall pay the beer\n\ndistributor the difference between the payment made to the beer\n\ndistributor and the determined fair market value plus interest.\n\n5. If the arbitration panel rules that the payment made by the\n\nsmall brewer to the beer distributor upon termination was more than\n\nthe fair market value of distribution rights lost or diminished by\n\nreason of the termination, then the beer distributor shall pay the\n\nsmall brewer the difference between the payment made to the beer\n\ndistributor and the determined fair market value, plus interest.\n\n6. All arbitration fees and expenses shall be equally divided\n\namong the parties to the arbitration, except if the arbitration\n\npanel determines that the small brewer’s payment upon termination\n\nwas not a good-faith estimate of the fair market value, then the\n\npanel may award up to one hundred percent (100%) of the arbitration\n\ncosts to the prevailing party.\n\nH. 1. Any beer distributor or brewer who is aggrieved by a\n\nviolation of any provision of this section shall be entitled to the\n\nrecovery of damages caused by the violation. If a beer distributor\n\nis not terminated in accordance with the provisions of this section,\n\ndamages may additionally include the fair market value of the\n\ndistribution rights and the purchase, or the requirement that the\n\nnewly appointed distributor purchase, any remaining unexpired\n\ninventory for laid in cost. Damages shall be sought in a civil\n\naction in any court of competent jurisdiction.\n\n2. Any dispute arising under this section may also be settled\n\nby such dispute resolution procedures as may be provided by a\nude the fair market value of the\n\ndistribution rights and the purchase, or the requirement that the\n\nnewly appointed distributor purchase, any remaining unexpired\n\ninventory for laid in cost. Damages shall be sought in a civil\n\naction in any court of competent jurisdiction.\n\n2. Any dispute arising under this section may also be settled\n\nby such dispute resolution procedures as may be provided by a\n\nwritten agreement between the parties.\n\nI. Nothing in this section shall be construed to limit or\n\nprohibit good-faith settlements voluntarily entered into by the\n\nparties.\n\nJ. Except as otherwise provided herein, nothing in this section\n\nshall be construed to give a beer distributor any right to\n\ncompensation if an agreement with the beer distributor is terminated\n\nby a brewer pursuant to this section.\n\nK. No brewer shall require any beer distributor to waive\n\ncompliance with any provision of the Oklahoma Alcoholic Beverage\n\nControl Act and any provisions of the Oklahoma Alcoholic Beverage\n\nControl Act shall supersede any provisions of a distributor\n\nagreement in conflict in this section.\n\nL. No brewer shall charge or accept, and no beer distributor\n\nshall pay or provide, in a material way, any money, property,\n\ngratuity, rebate, free goods, shipping charges different than those\n\ncharged for all beer distributors, allowances, thing of value, or\n\nother inducement, as defined in Section 3-123 of this title, from a\n\nbeer distributor in exchange for the brewer entering into a\n\ndistributor agreement with the beer distributor. However, a brewer\n\nwho also holds a beer distributor license and desires to sell all or\n\na portion of its beer distribution rights and business, or a holder\n\nof a small brewer license who desires to change its election from\n\nself-distribution to the use of a distributor agreement, may accept\n\na payment for the fair market value of its existing and established\n\ndistribution business in the subject territory.\n\nM. This section shall apply to any agreement entered into and\n\nany renewals, extensions, amendments, or conduct constituting a\n\nmodification of a distributor agreement by a brewer or cider\n\nmanufacturer.\n\nN. Where a cider manufacturer distributes cider through a beer\n\ndistributor, the rights and obligations of the cider manufacturer,\n\nthe distributor, a successor cider manufacturer, and a successor\n\ndistributor shall be the same as the rights and obligations provided\n\nin this section for a brewer, beer distributor, successor brewer,\n\nand successor beer distributor.","path":["OK Code","Title 37A"],"source_url":"https://www.oklegislature.gov/OK_Statutes/CompleteTitles/os37A.pdf","current_through":"2026-08-14","vintage":"open-us-law v2026.08, retrieved 2026-09-14","retrieved_at":"2026-09-14T18:32:36Z","sha256":"a101affaf9ac6da59f086f87c53fbc99edef6e6bf76863fa4044b6d5b0968dc3","source_id":"us-ok","stale":false,"prev":"us-ok/okla.-stat.-tit.-37a-37a-3-110","next":"us-ok/okla.-stat.-tit.-37a-37a-3-112"},"notice":"GroundRules: Original legal text. Not legal advice."}