§ 395-a. Maintenance agreements. 1. Definitions. For the purposes of this section, a "maintenance agreement" shall refer to any contract or representation whereby the seller or manufacturer of a retail sales item or the seller of a service contract shall offer the defined service and/or parts for an additional fee. Said maintenance agreement can be offered at the time of purchase or at a later date.

2. No maintenance agreement covering parts and/or service shall be terminated at the election of the party providing such parts and/or service during the term of the agreement unless prior to or upon delivery of a copy of the agreement the buyer is notified in writing that the agreement may be cancelled for:

a. non-payment; or

b. use of the item primarily for commercial purposes, unless the agreement so provides. When a maintenance agreement is terminated because of use of the item primarily for commercial purposes, the party providing the parts and/or service must reimburse the buyer on a pro rata basis for the remaining period of time or mileage for the unused portion of the maintenance agreement less the cost of any parts and/or service already provided from the date of termination; or

c. change in the buyer's residence beyond the disclosed service area, except where the buyer provides transportation or shipping to and from the site of service. When a maintenance agreement is terminated because of a change in the buyer's residence beyond the disclosed service area, either the buyer or the party providing the parts and/or service may terminate the maintenance agreement. Reimbursement to the buyer shall be made on a pro rata basis for the remaining period of time or mileage for the unused portion of the maintenance agreement from the date of notice of change in the buyer's residence.

3. Pre-sale availability of maintenance agreement. Sellers of retail products purchased for personal, family or household purposes, which offer maintenance agreements shall provide the buyer with an opportunity to review the maintenance agreement before it is purchased and provide the buyer with a copy of the maintenance agreement at the time of purchase. The provisions of this section shall not apply to sales by mail order companies as defined in section three hundred ninety-six-m of this chapter.

4. A violation of the provisions of this section shall be punishable by a civil penalty of not more than three hundred dollars recoverable in an action by the attorney general in the name of the people of the state or by the corporation counsel for any city or by the appropriate attorney of any other political subdivision as shall be designated by the governing body of such political subdivision.