N.Y. General Business Law § 395-a: Maintenance agreements

§ 395-a. Maintenance agreements. 1. Definitions. For the purposes of

this section, a "maintenance agreement" shall refer to any contract or

representation whereby the seller or manufacturer of a retail sales item

or the seller of a service contract shall offer the defined service

and/or parts for an additional fee. Said maintenance agreement can be

offered at the time of purchase or at a later date.

2. No maintenance agreement covering parts and/or service shall be

terminated at the election of the party providing such parts and/or

service during the term of the agreement unless prior to or upon

delivery of a copy of the agreement the buyer is notified in writing

that the agreement may be cancelled for:

a. non-payment; or

b. use of the item primarily for commercial purposes, unless the

agreement so provides. When a maintenance agreement is terminated

because of use of the item primarily for commercial purposes, the party

providing the parts and/or service must reimburse the buyer on a pro

rata basis for the remaining period of time or mileage for the unused

portion of the maintenance agreement less the cost of any parts and/or

service already provided from the date of termination; or

c. change in the buyer's residence beyond the disclosed service area,

except where the buyer provides transportation or shipping to and from

the site of service. When a maintenance agreement is terminated because

of a change in the buyer's residence beyond the disclosed service area,

either the buyer or the party providing the parts and/or service may

terminate the maintenance agreement. Reimbursement to the buyer shall be

made on a pro rata basis for the remaining period of time or mileage for

the unused portion of the maintenance agreement from the date of notice

of change in the buyer's residence.

3. Pre-sale availability of maintenance agreement. Sellers of retail

products purchased for personal, family or household purposes, which

offer maintenance agreements shall provide the buyer with an opportunity

to review the maintenance agreement before it is purchased and provide

the buyer with a copy of the maintenance agreement at the time of

purchase. The provisions of this section shall not apply to sales by

mail order companies as defined in section three hundred ninety-six-m of

this chapter.

4. A violation of the provisions of this section shall be punishable

by a civil penalty of not more than three hundred dollars recoverable in

an action by the attorney general in the name of the people of the state

or by the corporation counsel for any city or by the appropriate

attorney of any other political subdivision as shall be designated by

the governing body of such political subdivision.