N.Y. General Business Law Section 696-C
Termination and non-renewal of dealer agreements


Except where a grounds for termination or non-renewal of a dealer agreement are contained in paragraph (a), (b), (c), (d), (e) or (f) of subdivision two of this section, a supplier shall give a dealer ninety days’ written notice of the supplier’s intent to terminate, cancel or not renew a dealer agreement. The contractual term of the dealer agreement shall not expire, without the written consent of the dealer, prior to the expiration of at least ninety days following such notice. Nothing in this section shall prohibit a dealer from terminating a dealer agreement with cause provided, however, that the dealer notify the supplier in writing at least ninety days prior to the effective date of such termination with the reasons for such termination. This notice will not apply for grounds of termination in following paragraphs (a) through (f) of subdivision two of this section.


As used in this article, a termination by a supplier of a dealer agreement shall be with cause when the dealer has:


transferred a controlling ownership interest in the dealership without the supplier’s consent;


made a material misrepresentation in applying for the dealer agreement;


filed a voluntary petition in bankruptcy or has had an involuntary petition in bankruptcy filed against the dealer which has not been discharged within sixty days after the filing; is in default under the provisions of a security agreement in effect with the supplier; or is insolvent or in receivership;


been convicted of a crime, punishable for a term of imprisonment for one year or more;


failed to operate in the normal course of business for ten consecutive business days or has terminated said business;


Significantly relocated the dealer’s place of business without supplier’s consent; or


consistently engaged in business practices which are detrimental to the consumer or supplier by way of excessive pricing, misleading advertising, failure to provide service and replacement parts or perform warranty obligations;


inadequately represented supplier over a measured period causing lack of performance in sales, service or warranty areas and failed to achieve market penetration at levels consistent with similary located dealerships based on available recorded information compiled by industry associations regarded as the authorities in this area both in local and national standards;


consistently failed to meet building and housekeeping requirements, or has failed to provide adequate sales, service or parts personnel commensurate with the dealer agreement;


consistently failed to comply with the applicable licensing laws pertaining to the products and services being represented for and on supplier’s behalf;


consistently failed to comply with the terms of the dealership agreement.


No supplier shall base its decision to terminate, cancel or not to renew a dealer agreement on any of the paragraphs of subdivision two of this section except paragraph (a), (b), (c), (d), (e) or (f) thereof unless such supplier can demonstrate, through written documentation, the alleged misconduct and/or lack of performance by the dealer, and furthermore, such supplier shall also show that the reason for the decision to terminate, cancel or not to renew the dealer agreement was in no way caused by such supplier.

Source: Section 696-C — Termination and non-renewal of dealer agreements, https://www.­nysenate.­gov/legislation/laws/GBS/696-C (updated Sep. 22, 2014; accessed Nov. 25, 2023).

Nov. 25, 2023

Last modified:
Sep. 22, 2014

§ 696-C’s source at nysenate​.gov

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