16-3-506. Table wine agreement of distributorship provisions. (1) A winery or wine importer and distributor must have a written agreement of distributorship that provides for purchase of the winery or wine importer's products from the winery or wine importer by the distributor.

(2) A table wine agreement of distributorship must provide that:

(a) a winery or wine importer shall notify a distributor in writing at least 60 days prior to termination of an agreement of distributorship unless a termination without notice is permitted as provided in 16-3-507. The written notice must state the reasons for termination. Notice of termination is void if within 60 days of the notice, the distributor rectifies the deficiency stated as the reason for termination and if the deficiency was not stated as reason for termination in a notice previously voided under the provisions of this subsection (2)(a).

(b) a winery or wine importer may not unreasonably withhold or delay approval of a sale or transfer of the ownership, management, or control of a distributorship. However, a distributor shall give a winery or wine importer no less than 60 days' prior written notice of any material change in ownership, management, or control.

(3) If a winery or wine importer terminates an agreement of distributorship under the provisions of subsection (2)(a), the distributor subject to the termination is entitled to compensation for the laid-in cost of inventory. In the event of any termination of the agreement by the winery or wine importer other than termination for good cause or for any reason set forth in 16-3-507(3), the distributor is entitled to compensation for the laid-in cost of inventory and to liquidated damages based on the sales of the brand or brands involved, as may be provided in the agreement. If the winery or wine importer and the distributor are unable to agree on the amount of liquidated damages, the amount of liquidated damages must be determined by an arbitrator appointed under subsection (4).

(4) If undertaken in good faith by a winery or wine importer, a winery or wine importer may terminate an agreement of distributorship for a legitimate business reason not within the definition of good cause if an arbitrator appointed by the department finds, after hearing the winery or wine importer and the distributor, that the termination is in the best interest of the brands concerned. Arbitration under this section must be conducted under the provisions of Title 27, chapter 5.

(5) All agreements of distributorship are interpreted and governed by the laws of Montana.

(6) In any dispute resulting in litigation between a winery or wine importer and a distributor, the litigation must occur in a Montana court, federal or state, unless that forum would create an unreasonable burden on any party, as determined by the court in which the litigation is commenced.

(7) Agreements between a winery or wine importer and a distributor must recognize the constitutional right to a jury trial as set forth in Article II, section 26, of the Montana constitution.

(8) A provision in an agreement of distributorship that is inconsistent with the requirements of this section is void.