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This entry was published on 2014-09-22
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Termination and non-renewal of dealer agreements
General Business (GBS) CHAPTER 20, ARTICLE 33-A
§ 696-c. Termination and non-renewal of dealer agreements. 1. Except
where a grounds for termination or non-renewal of a dealer agreement are
contained in paragraph (a), (b), (c), (d), (e) or (f) of subdivision two
of this section, a supplier shall give a dealer ninety days' written
notice of the supplier's intent to terminate, cancel or not renew a
dealer agreement. The contractual term of the dealer agreement shall not
expire, without the written consent of the dealer, prior to the
expiration of at least ninety days following such notice. Nothing in
this section shall prohibit a dealer from terminating a dealer agreement
with cause provided, however, that the dealer notify the supplier in
writing at least ninety days prior to the effective date of such
termination with the reasons for such termination. This notice will not
apply for grounds of termination in following paragraphs (a) through (f)
of subdivision two of this section.

2. As used in this article, a termination by a supplier of a dealer
agreement shall be with cause when the dealer has:

(a) transferred a controlling ownership interest in the dealership
without the supplier's consent;

(b) made a material misrepresentation in applying for the dealer

(c) filed a voluntary petition in bankruptcy or has had an involuntary
petition in bankruptcy filed against the dealer which has not been
discharged within sixty days after the filing; is in default under the
provisions of a security agreement in effect with the supplier; or is
insolvent or in receivership;

(d) been convicted of a crime, punishable for a term of imprisonment
for one year or more;

(e) failed to operate in the normal course of business for ten
consecutive business days or has terminated said business;

(f) Significantly relocated the dealer's place of business without
supplier's consent; or

(g) consistently engaged in business practices which are detrimental
to the consumer or supplier by way of excessive pricing, misleading
advertising, failure to provide service and replacement parts or perform
warranty obligations;

(h) inadequately represented supplier over a measured period causing
lack of performance in sales, service or warranty areas and failed to
achieve market penetration at levels consistent with similary located
dealerships based on available recorded information compiled by industry
associations regarded as the authorities in this area both in local and
national standards;

(i) consistently failed to meet building and housekeeping
requirements, or has failed to provide adequate sales, service or parts
personnel commensurate with the dealer agreement;

(j) consistently failed to comply with the applicable licensing laws
pertaining to the products and services being represented for and on
supplier's behalf;

(k) consistently failed to comply with the terms of the dealership

3. No supplier shall base its decision to terminate, cancel or not to
renew a dealer agreement on any of the paragraphs of subdivision two of
this section except paragraph (a), (b), (c), (d), (e) or (f) thereof
unless such supplier can demonstrate, through written documentation, the
alleged misconduct and/or lack of performance by the dealer, and
furthermore, such supplier shall also show that the reason for the
decision to terminate, cancel or not to renew the dealer agreement was
in no way caused by such supplier.