Lemon law

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Lemon laws are laws that provide a remedy for purchasers of cars and other consumer goods in order to compensate for products that repeatedly fail to meet standards of quality and performance. Although many types of products can be defective, the term "lemon" is mostly used to describe defective motor vehicles, such as cars, trucks, and motorcycles.

Contents

United States

Lemon law protection arises under state law, with every U.S. state and the District of Columbia having its own lemon law. [1] Although the exact criteria vary by state, new vehicle lemon laws require that an auto manufacturer repurchase a vehicle that has a significant defect that the manufacturer is unable to repair within a reasonable amount of time. [2] Lemon laws consider the nature of the problem with the vehicle, the number of days that the vehicle is unavailable to the consumer for service of the same mechanical issue, and the number of repair attempts made. If repairs cannot be completed within the total number of days described in the state statute, the manufacturer becomes obligated to buy back the defective vehicle. Contrary to popular belief, the dealership has no obligation to buy back the vehicle, because the dealership does not warrant the vehicle, the manufacturer does.

Lemon laws offer remedies that exceed the scope of a vehicle manufacturer's warranty. While a manufacturer's warranty might obligate a vehicle manufacturer to make a repair at no cost to the consumer, warranties do not include maximum time periods for the completion of repair, nor do they trigger buy-back provisions if the repair cannot be completed within such a time period.

Some state lemon laws cover only certain classes of vehicles, such as vehicles purchased for individual use but not for business use, or vehicles under a certain gross weight. A small number of states additionally have more limited lemon laws that cover used vehicles. New York State is one state with a used car lemon law. [3] Some states have lemon laws that apply to pet purchases. [4] California has a broad lemon law, the Song-Beverly Consumer Warranty Act, which covers a wide range of products, including vehicles, boats, electronics, and appliances. [5] [6] California extends its lemon laws to active duty military personnel transferred to the state after purchasing a vehicle in another state. [7] [8]

Federal law

There are two types of warranties for product purchases, express warranties and implied warranties. Express warranties make specific promises about product repair, and are usually made in writing. An express warranty may be provided by the manufacturers in owner's manuals and other written sales or marketing materials. Implied warranties arise from a manufacturer's duty to meet certain minimum standards of quality whereby the product is fit for use for the purpose intended. An implied warranty arises from the sale itself, and need not be in writing. In each type the manufacturer assumes the liability and responsibility to correct the defect and, in the event that they cannot meet that duty, may be required to repurchase or replace the product.

The Magnuson-Moss Warranty Act was enacted as a federal law in 1975, and protects citizens of all states, to ensure that manufacturers honor their warranties and to reduce the chance that a consumer will be misled about the nature and scope of a warranty when making a purchase. [9] The Act extends to the purchase of consumer products, including motor vehicles and appliances. The Act also provides that the warranter may be obligated to pay the prevailing party's attorney in a successful lawsuit, as do most state lemon laws. A consumer may pursue relief under both a state lemon law and the Magnuson-Moss Warranty Act. [10]

The existence, scope and consequence of express and implied warranties can vary under state law, and warranties for the sale of goods will often be addressed by Article II of the Uniform Commercial Code. The Magnuson-Moss Warranty Act will not protect the buyer of a product purchased without a warranty, such as a product purchased "as is" or "with all faults", but may protect a consumer who was misled into waiving the protection of a warranty. [10]

Australia

Australian car purchases are protected under Australian Consumer Law (ACL). A recent[ when? ] clarification to the ACL has formed a subsequent Lemon Law that entitles consumers to a refund or replacement for when "it has multiple minor problems that, when taken as a whole, would have stopped someone from buying it if they’d known about them". Consumers are entitled to a refund or replacement when a car has a major failure, as defined by the ACL, but manufactures commonly just pass them off as minor problems to avoid having to replace the car or refund the consumer as minor problems only require repair within a reasonable amount of time. [11]

Consumers have been known to take creative measures to try to convince vehicle manufacturers to buy back defective vehicles. [12] The Queensland Parliament conducted an inquiry on the need for a consumer lemon law for new motor vehicles. [13] [14] A report of the findings of the inquiry was published in November 2015. [15]

Canada

The Canadian Motor Vehicle Arbitration Plan (CAMVAP) is the dispute resolution program for Canadians who have problems with the assembly of their vehicle or with how the manufacturer implements its new vehicle warranty. [16] CAMVAP covers new and used, owned and leased vehicles that are from the current model year and up to an additional four model years.

CAMVAP is free for consumers, and hearings are held in the consumer's home community. The process normally takes less than 70 days from start to finish. Most consumers are able to handle their own case without the assistance of lawyers. The manufacturers do not use lawyers. Their representatives usually are serving or retired district parts and services representatives. An inspection of the vehicle normally is part of an arbitration hearing and the arbitrator can order a technical inspection of the vehicle at the program's expense if doing so is required.

CAMVAP arbitrators can order the manufacturer to buy back the vehicle; repair it at the manufacturer's expense; pay for repairs already completed; or pay out of pocket expenses for items such as towing, diagnostic testing, rental cars and accommodation related to the problem with the vehicle. The arbitrator can also determine that the manufacturer has no liability.

CAMVAP is available in all Canadian provinces and territories.

European Union

In the EU, Directive (UE) 2019/771 Rules on contracts for the sale of goods between sellers and consumers applies from January 2022, to replace regulation 2017/2394 and directive 2009/22/CE and directive 1999/44/CE.

France

In France, the Garantie des vices cachés en droit français protects the buyer against Latent defect, in relation with the United Nations Convention on Contracts for the International Sale of Goods.

Singapore

A similar "Lemon Law" was passed in Singapore's parliament on September 1, 2012, to strengthen consumer protection laws. Singapore's Lemon Law applies to all goods (including consumables and perishables) but it does not apply to services. [17]

Under the law, consumers can report a defective item within six months of delivery and it is the responsibility of the retailer to prove that the defect did not exist at the time of delivery. The consumer may have the option to request for repair or a replacement, and if that is not possible, ask for a reduction in price, or even a refund.

Philippines

In the Philippines, the Lemon Law was passed in 2014. [18] The Lemon Law covers only new vehicles. [18]

Related Research Articles

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<span class="mw-page-title-main">The Market for Lemons</span> 1970 economic paper

"The Market for 'Lemons': Quality Uncertainty and the Market Mechanism" is a widely cited seminal paper in the field of economics which explores the concept of asymmetric information in markets. The paper was written in 1970 by George Akerlof and published in the Quarterly Journal of Economics. The paper's findings have since been applied to many other types of markets. However, Akerlof's research focused solely on the market for used cars.

A grey market or dark market is the trade of a commodity through distribution channels that are not authorized by the original manufacturer or trade mark proprietor. Grey market products are products traded outside the authorized manufacturer's channel.

Caveat emptor is Latin for "Let the buyer beware". It has become a proverb in English. Generally, caveat emptor is the contract law principle that controls the sale of real property after the date of closing, but may also apply to sales of other goods. The phrase caveat emptor and its use as a disclaimer of warranties arises from the fact that buyers typically have less information than the seller about the good or service they are purchasing. This quality of the situation is known as 'information asymmetry'. Defects in the good or service may be hidden from the buyer, and only known to the seller.

<span class="mw-page-title-main">Car dealerships in the United States</span>

In the United States, a car dealership is a business that sells cars. A car dealership can either be a franchised dealership selling new and used cars, or a used car dealership, selling only used cars. In most cases, dealerships provide car maintenance and repair services as well as trade-in, leasing, and financing options for customers.

An extended warranty, sometimes called a service agreement, a service contract, or a maintenance agreement, is a prolonged warranty offered to consumers in addition to the standard warranty on new items. The extended warranty may be offered by the warranty administrator, the retailer or the manufacturer. Extended warranties cost extra and for a percentage of the item's retail price. Occasionally, some extended warranties that are purchased for multiple years state in writing that during the first year, the consumer must still deal with the manufacturer in the occurrence of malfunction. Thus, what is often promoted as a five-year extended guarantee, for example, is actually only a four-year guarantee.

In law, a warranty is an expressed or implied promise or assurance of some kind. The term's meaning varies across legal subjects. In property law, it refers to a covenant by the grantor of a deed. In insurance law, it refers to a promise by the purchaser of an insurance about the thing or person to be insured.

<span class="mw-page-title-main">Implied warranty</span>

In common law jurisdictions, an implied warranty is a contract law term for certain assurances that are presumed to be made in the sale of products or real property, due to the circumstances of the sale. These assurances are characterized as warranties regardless of whether the seller has expressly promised them orally or in writing. They include an implied warranty of fitness for a particular purpose, an implied warranty of merchantability for products, implied warranty of workmanlike quality for services, and an implied warranty of habitability for a home.

In American English, a lemon is a vehicle that turns out to have several manufacturing issues affecting its safety, value or utility. Any vehicle with such severe issues may be termed a lemon, and by extension, so may any product with flaws too great or severe to serve its purpose.

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<span class="mw-page-title-main">Magnuson–Moss Warranty Act</span> United States federal law governing warranties on consumer products

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<i>Henningsen v. Bloomfield Motors, Inc.</i>

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The Canadian Motor Vehicle Arbitration Plan (CAMVAP) is a dispute resolution program for consumers in Canada who are experiencing problems with the assembly of their vehicle or with how the manufacturer implements its new-vehicle warranty. CAMVAP covers new, used, owned or leased vehicles from the current model year and up to an additional four model years old.

<span class="mw-page-title-main">Product return</span>

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<i>Greenman v. Yuba Power Products, Inc.</i>

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References

  1. ↑ "BBB Auto Line: State Lemon Laws". BBB. Better Business Bureau. Retrieved 31 May 2017.
  2. ↑ "State Lemon Law Criteria". The Center for Auto Safety. 21 January 2003. Retrieved 31 May 2017.
  3. ↑ "New York's Used Car Lemon Law Fact Sheet" . Retrieved 4 February 2020.
  4. ↑ "What you need to know about warranty laws". Consumer Reports. May 2013. Retrieved 31 May 2017.
  5. ↑ California Civil Code sections §1790 to §1795.8.
  6. ↑ "California's Lemon Law helps protect pricey consumer electronics". Los Angeles Times. 2015-12-11. Retrieved 2023-06-14.
  7. ↑ Zimmerman, Martin (2007-07-21). "Bill extends lemon law to military". Los Angeles Times. Retrieved 2023-06-01.
  8. ↑ "California Code, Civil Code - CIV § 1795.8". Findlaw. Retrieved 2023-06-01.
  9. ↑ "John J. Woodcock III Lemon Law Records". Center for Public Policy & Social Research. Central Connecticut State University. Retrieved 31 May 2017.
  10. 1 2 "Businessperson's Guide to Federal Warranty Law". Federal Trade Commission. 12 May 2015. Retrieved 31 May 2017.
  11. ↑ "Repair, replace, refund". Australian Competition and Consumer Commission. 2012-11-05. Retrieved 2021-02-18.
  12. ↑ "Angry Jeep Owner Creates Hilarious Video Rant About His Lemon". Yahoo! News. Yahoo!. 16 Nov 2015. Retrieved 31 May 2017.
  13. ↑ "'Lemon' Laws - An inquiry into consumer protections and remedies for buyers of new motor vehicles". Queensland Parliament. Retrieved 31 May 2017.
  14. ↑ "Public Hearing - "Lemon Laws Inquiry" Legal Affairs and Community Safety Committee". YouTube. Retrieved 31 May 2017.[ dead YouTube link ]
  15. ↑ "Report No. 17, 55th Parliament Legal Affairs and Community Safety Committee" (PDF). Queensland Parliament. Nov 2015. Retrieved 31 May 2017.
  16. ↑ "About CAMVAP - CAMVAP" . Retrieved 2019-02-01.
  17. ↑ "CASE - Consumer Guides | CPFTA & Lemon Law". www.case.org.sg. Retrieved 2019-02-01.
  18. 1 2 "'I bought a lemon'". Manila Standard. Retrieved 2021-10-22.
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