N.Y. General Business Law § 812: Termination 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.