Sec. 42-133j. Legislative finding concerning petroleum product franchises. - Connecticut Statutes

      Sec. 42-133j. Legislative finding concerning petroleum product franchises. (a) The legislature of the state of Connecticut finds and declares that the distribution and sales of gasoline and petroleum products through franchises within the state of Connecticut, including the rights and obligations of suppliers and dealers, vitally affects its general economy. In order to promote the public interest and public welfare, to avoid undue control of the dealer by suppliers, to foster and keep alive vigorous and healthy competition for the benefit of the public by prohibiting practices through which fair and honest competition is destroyed or prevented, to promote the public safety, to prevent deterioration of facilities for servicing motor vehicles on the highways of the state, to prevent dealers from unnecessarily going out of business thereby resulting in unemployment with loss of tax revenue to the state and its resultant undesirable consequences, and to offset evident abuses within the petroleum industry as a result of inequitable economic power, it is necessary to legislate standards pursuant to the exercise of the police power of this state governing the relationship between suppliers and distributors of gasoline and petroleum products and the dealers within the state who sell those products to the public.

      (b) In recognition of the factors set forth in subsection (a) of this section, it is provided that all provisions of sections 42-133j to 42-133n, inclusive, to the extent permitted by law, shall be deemed effective as to those presently existing franchise agreements involving gasoline dealers within the state of Connecticut as of October 1, 1977.

      (c) The legislature further finds and declares that the distribution and sales of motor vehicle fuels and oils in the state of Connecticut affects the general economy of the state, the public interest and the public welfare. Competition, freedom from unreasonable restraints on alienation and competitive pricing are essential to the functioning of a fair and efficient free market economy within the petroleum industry. The legislature finds and declares that existing petroleum franchise agreements as defined and regulated within sections 42-133e to 42-133h, inclusive, uniformly prohibit assignment of franchise interests without the consent of the franchisor, which consent may be unreasonably and arbitrarily withheld. Also, existing petroleum franchise agreements provide for their automatic termination upon the death of the franchisee. The legislature finds and declares that such provisions constitute unreasonable restraints on alienation and inhibit the fair and efficient functioning of a free market economy within the petroleum industry. Therefore, it is provided that the provisions of any franchise agreement which prohibit assignment without the consent of the franchisor and permit such consent to be unreasonably withheld are void and without effect as contrary to public policy. It is further provided that the provisions of any franchise agreement which terminate the franchise automatically upon the death of the franchisee are void and ineffective as contrary to public policy. The legislature finds and declares that provisions in certain existing petroleum franchise agreements prohibit gasoline retailers or distributors from offering a discount to a buyer based upon the method of payment by such buyer for gasoline. The legislature finds and declares that such provisions constitute unreasonable restraints on competitive pricing and inhibit the fair and efficient functioning of a free market economy within the petroleum industry. Therefore, it is provided that the provisions of any franchise agreement that prohibit gasoline retailers or distributors from offering a discount to a buyer based upon the method of payment by such buyer for gasoline are void and without effect as contrary to public policy.

      (P.A. 77-493, S. 1; June 11 Sp. Sess. P.A. 08-2, S. 3.)

      History: June 11 Sp. Sess. P.A. 08-2 amended Subsec. (c) to add "competitive pricing" re functioning of free market economy within petroleum industry and add legislative finding and declaration re petroleum franchise agreement provisions banning buyer discounts based on method of payment for gasoline, effective June 17, 2008.