N.Y. General Business Law § 696-h: Warranty

§ 696-h. Warranty. 1. Every supplier shall provide a fair and

reasonable warranty agreement on any new equipment which it sells and

shall fairly compensate each of its dealers for labor and parts used in

fulfilling such warranty agreement. All claims for payment under such

warranty agreements made by dealers hereunder for such labor and parts

shall be paid within thirty days following their approval. If such

claims are not approved or disapproved within thirty days after their

receipt they shall be deemed approved and shall be paid within the time

specified herein. When any such claim is disapproved, the dealer who

submits it shall be notified in writing of its disapproval within such

period and each such notice shall state the specific grounds upon which

the disapproval is based. Any special handling of claims required of the

dealer by the supplier and not uniformly required of all dealers of that

make, may be enforced only after thirty days' notice in writing to the

dealer and upon good and sufficient reason.

2. (a) The minimum basis for compensating said dealer for warranty

work as provided for herein shall be calculated for labor, service

repair, diagnostic work and parts and shall be adequate for the work to

be performed in accordance with the reasonable and customary account of

time required to complete such work, including such reasonable time as

required by the dealer for the diagnosis of such repair, expressed in

hours and fractions of hours multiplied by the dealer's established

hourly retail labor rate. Prior to filing a claim for reimbursement for

warranty work, the dealer must notify the supplier of his hourly retail

labor rate. The minimum lawful basis for compensation to the dealer for

parts used in fulfilling said warranty work shall be at the dealer's

costs thereof, including all freight and handling charges applicable

thereto, plus at least twenty percent of said sum to reimburse the

dealer's reasonable costs of doing business and providing such warranty

service on the supplier's behalf.

(b) Nothing contained in this section shall prohibit a supplier from

auditing such warranty claims submitted by such dealers for a period of

up to one year following the payment of such claims and further provided

that such suppliers may seek reimbursement from the dealers on all

warranty claims which were misrepresented.

3. The provisions of this section shall not apply to a dealer

agreement in writing that provides for compensation to a dealer for

warranty costs either in the sale price of the equipment to the dealer

or in the form of a lump sum payment.