N.Y. General Business Law § 696-b: Dealer agreements; unlawful acts and practices

§ 696-b. Dealer agreements; unlawful acts and practices. It shall be a

violation of this article for a supplier:

1. To coerce, compel, or attempt to coerce or compel any dealer to

order or accept delivery of any equipment or parts, or any equipment

with special features or accessories not included in the base list price

of such equipment as publicly advertised by the supplier which the

dealer has not voluntarily ordered; or

2. To coerce or compel any dealer to enter into any agreement, whether

written or oral, supplementary to an existing dealer agreement with such

supplier; or

3. To coerce or compel, any dealer to refuse to purchase equipment

from another supplier, however it shall not be a violation of this

section to require separate facilities, financial statements or sales

staff for major competing lines provided that the dealer is given at

least thirty-six months notice of such requirements; or

4. To refuse to deliver in reasonable quantities and within a

reasonable time after receipt of the dealer's order to any dealer having

a dealer agreement for the retail sale of new equipment sold or

distributed by such supplier, equipment covered by such dealer agreement

specifically advertised or represented by such supplier to be available

for immediate delivery. However, the failure to deliver any such

equipment shall not be considered a violation of this article if such

failure is due to prudent and reasonable restriction on extension of

credit by the supplier to the dealer, an act of God, work stoppage or

delay due to a strike or labor difficulty, a bona fide shortage of

materials, freight embargo, or other cause over which the supplier has

no control; or

5. To terminate or cancel the dealer agreement of any such dealer

without due cause; or

6. To condition the renewal or extension of a dealer agreement on the

dealer's substantial renovation of the dealer's place of business or on

the construction, purchase, acquisition, or rental of a new place of

business by the dealer unless the supplier has advised the dealer in

writing of its demand for such renovation, construction, purchase,

acquisition or rental within a reasonable time prior to the effective

date of the proposed date of renewal or extensions, but in no case less

than one year, and provided the supplier demonstrates the need for such

change in the place of business and the reasonableness of such demand in

view of the need to service the public and economic conditions existing

at the time and, provided further, that the dealer makes a good faith

effort to complete such construction or renovation plans within one

year; or

7. To sell or offer to sell any new equipment to any other dealer at a

lower actual price therefor than the actual price sold or offered to any

other dealer for the same equipment identically equipped or to utilize

any device including, but not limited to, sale promotion plans or

programs which result in such lesser actual price, or result in a fixed

price predetermined solely by the supplier provided, however, the

provisions of this subdivision shall not apply to sales to a dealer for

resale to any unit or agency of the United States government, the state,

or any of its political subdivisions or any municipality located within

this state; and provided, further, that the provisions of this

subdivision shall not apply so long as a supplier sells or offers to

sell such new equipment to all of its dealers at an equal price; or

8. To willfully discriminate, either directly or indirectly, in price,

programs, or terms of sale offered to dealers, where the effect of such

discrimination may be to substantially lessen competition or give to one

holder of a dealer agreement any economic business or competitive

advantage not offered to all holders of the same or similar dealer

agreements; or

9. To prevent by contract or otherwise, any dealer, from changing its

capital structure, ownership or the means by or through which the dealer

finances its operations, so long as the dealer gives prior notice to the

supplier and provided the dealer at all times meets any responsible

capital standards agreed to between the dealer and the supplier and

imposed on similarly situated dealers and provided such change by the

dealer does not result in a change in the person with actual or

effective control of a majority of the voting interests of the dealer;

or

10. If a supplier has contractual authority to approve or deny a

request for a sale or transfer of a dealer's business or an equity

ownership interest therein, the supplier shall approve or deny such a

request within sixty days after receiving a written request from the

dealer. If the supplier has neither approved nor denied the request

within the sixty day period, the request will be deemed approved. The

dealer's request shall include reasonable financial, personal

background, character references and work history information for the

acquiring persons. If a supplier denies a request made pursuant to this

subdivision, the supplier must provide the dealer with a written notice

of such denial that states the reasons for such denial. A supplier may

only deny a request based on the failure of the proposed transferees to

meet the reasonable requirements consistently imposed by the supplier in

determining approval of such transfer and/or approvals of new dealers;

or

11. To require a dealer to assent to a release, assignment, notation,

waiver, or estoppel which would relieve any person from liability

imposed by this article; or

12. (a) To unreasonably withhold consent, in the event of the death of

the dealer or the principal owner of the dealership, to the transfer of

the dealer's interest in the dealership to a member or members of the

family of the dealer or the principal owner of the dealership or to

another qualified individual if the family member or other qualified

individual meets the reasonable financial, business experience and

character standards of the supplier. Furthermore, and only in the event

that the transfer proposed is to a person other than a family member,

such person shall have actively participated in the dealership or in the

farm equipment or similar industry for at least twelve months preceding

the proposed date of transfer. Should a supplier determine that the

designated family member or other qualified individual is not

acceptable, it shall provide the dealer with written notice of its

objection and specific reasons for withholding its consent. A supplier

shall have thirty days to consider a dealer's request to make a transfer

to a family member or other qualified individual. As used in this

paragraph, "family" means and includes a spouse, parents, siblings,

children, step-children, sons-in-law, daughters-in-law and lineal

descendants, including those by adoption of the dealer or principal

owner of the dealership.

(b) Notwithstanding the foregoing, in the event that a supplier and

dealer have duly executed an agreement concerning succession rights

prior to the dealer's death, and if such agreement has not been revoked,

such agreement shall be observed, even if it designates someone other

than the surviving spouse or heirs of the decedent as the successor.