New York § 812 - 812Termination or renewal of agreement

§ 812. 812Termination or renewal of agreement

§ 812. Termination or renewal of agreement. 1. Termination for cause. A manufacturer or distributor may terminate an agreement with a dealer for cause upon not less than fifteen days written notice sent by certified mail or statutory overnight delivery, return receipt requested, to the dealer stating the specific grounds for such termination, only upon the occurrence of the following: (a) the conviction of the dealer, or one of its principal owners, of a felony or a crime punishable by a term of imprisonment which substantially adversely affects the business of the manufacturer or distributor; (b) the failure of the dealer to conduct its customary sales and service operations during the regularly open business period, as defined by such dealer, for a continuous period of seven days, except when any such failure is the result of an act of God or circumstances beyond the direct control of the dealer; (c) upon the suspension or revocation of the vessel dealer's registration, pursuant to section twenty-two hundred fifty-seven-a of the vehicle and traffic law, for more than thirty days; (d) the insolvency of the dealer, or filing of any petition by or against the dealer under any bankruptcy or receivership law; (e) unauthorized sales of products defined in the dealer agreement; (f) failure by the dealer to pay to the manufacturer or dealer for products purchased pursuant to the dealer agreement; (g) the dealer has made a material misrepresentation in applying for or acting under the contractual agreement; or (h) the dealer has engaged in fraud or unfair business practices. If a dealer is terminated for cause pursuant to this subdivision, such dealer shall pay reasonable freight costs and the cost of an independent marine surveyor, for the purpose of valuation of inventory, if the manufacturer elects to repurchase such dealer's inventory. 2. Termination or non-renewal without cause. Whenever a dealer enters into a dealer agreement with a manufacturer or distributor wherein the dealer agrees to maintain an inventory of vessels or parts therefor, the manufacturer or distributor shall not, except as provided in subdivision one of this section, terminate, cancel or non-renew such dealer agreement until ninety days after written notice stating the specific grounds of such intention to terminate has been sent by certified mail or statutory overnight delivery, return receipt requested, to the dealer. 3. If a manufacturer or distributor terminates a dealer agreement as a result of any action, except as otherwise provided in subdivision one of this section, the manufacturer or distributor shall repurchase the inventory as provided in section eight hundred eleven of this article. The dealer may keep the inventory if it desires, and the manufacturer agrees in writing. If the dealer has any outstanding debts to the manufacturer or distributor, then the repurchase amount may be adjusted by the manufacturer to take into account such unpaid debts. 4. After written notice by the dealer to the manufacturer by registered or certified mail or statutory overnight delivery, return receipt requested, within thirty days of the termination of the dealer agreement, the manufacturer or distributor shall repurchase that inventory previously purchased from the manufacturer or distributor as provided in section eight hundred eleven of this article, except as otherwise provided in subdivision one of this section. 5. Upon payment within a reasonable time of the repurchase amount to the dealer, the title, if any, and the right of possession to the repurchased inventory shall transfer to the manufacturer or distributor. 6. A dealer agreement shall not be assigned or transferred by the dealer without prior written consent of the manufacturer or distributor. Any assignment of such an agreement without such consent, any change in the majority ownership of capital stock of the dealer or any other change in the majority ownership of a partnership shall immediately terminate the agreement except as follows: (a) the manufacturer shall not refuse to transfer a dealer agreement to any immediate family member succeeding to the agreement of a deceased or incapacitated dealer if each of the following applies: (i) the immediate family member successor provides the manufacturer with written notice within sixty days after the dealer's death or incapacity of the intent to succeed to the agreement, (ii) the immediate family member successor agrees to be bound by all terms and conditions of existing agreements, (iii) the immediate family member successor is entitled to inherit the deceased or incapacitated dealer's agreement pursuant to an agreement or a written request filed by the dealer with the manufacturer prior to the death or incapacity of the dealer, and (iv) the immediate family member successor has demonstrated experience in the marine industry. (b) manufacturers and distributors shall not refuse a transfer, sale or exchange of a dealer agreement between a dealer and another person if the person meets all the requirements in the existing dealer agreement, as well as all reasonable requirements and prerequisites the manufacturer or distributor utilizes when selecting new dealers for its products at the time of the transfer, including financial and business requirements, and agrees to be bound by all terms and conditions of the agreement and the dealer applies in writing to the manufacturer or distributor for such transfer not less than sixty days prior to the sale or transfer of the dealership. The failure to comply with the requirements of the manufacturer or distributor within sixty days after the manufacturer or distributor receives an application for sale or transfer of a dealership shall be grounds for denial of such application. 7. A dealer shall not terminate, cancel or non-renew a dealer agreement with a manufacturer, until it has provided such manufacturer with written notice thereof not less than ninety days prior to such termination, cancellation or non-renewal.