§ 696-H — Warranty

§ 696-h. Warranty. 1. Every supplier shall provide a fair and\nreasonable warranty agreement on any new equipment which it sells and\nshall fairly compensate each of its dealers for labor and parts used in\nfulfilling such warranty agreement. All claims for payment under such\nwarranty agreements made by dealers hereunder for such labor and parts\nshall be paid within thirty days following their approval. If such\nclaims are not approved or disapproved within thirty days after their\nreceipt they shall be deemed approved and shall be paid within the time\nspecified herein. When any such claim is disapproved, the dealer who\nsubmits it shall be notified in writing of its disapproval within such\nperiod and each such notice shall state the specific grounds upon which\nthe disapproval is based. Any special handling of claims required of the\ndealer by the supplier and not uniformly required of all dealers of that\nmake, may be enforced only after thirty days' notice in writing to the\ndealer and upon good and sufficient reason.\n 2. (a) The minimum basis for compensating said dealer for warranty\nwork as provided for herein shall be calculated for labor, service\nrepair, diagnostic work and parts and shall be adequate for the work to\nbe performed in accordance with the reasonable and customary account of\ntime required to complete such work, including such reasonable time as\nrequired by the dealer for the diagnosis of such repair, expressed in\nhours and fractions of hours multiplied by the dealer's established\nhourly retail labor rate. Prior to filing a claim for reimbursement for\nwarranty work, the dealer must notify the supplier of his hourly retail\nlabor rate. The minimum lawful basis for compensation to the dealer for\nparts used in fulfilling said warranty work shall be at the dealer's\ncosts thereof, including all freight and handling charges applicable\nthereto, plus at least twenty percent of said sum to reimburse the\ndealer's reasonable costs of doing business and providing such warranty\nservice on the supplier's behalf.\n (b) Nothing contained in this section shall prohibit a supplier from\nauditing such warranty claims submitted by such dealers for a period of\nup to one year following the payment of such claims and further provided\nthat such suppliers may seek reimbursement from the dealers on all\nwarranty claims which were misrepresented.\n 3. The provisions of this section shall not apply to a dealer\nagreement in writing that provides for compensation to a dealer for\nwarranty costs either in the sale price of the equipment to the dealer\nor in the form of a lump sum payment.\n