LEMON LAWS

Lemon Laws

Lemon Laws

Outline

Introduction

Asymmetric Information

Structure of the Law

Documentation and Notification

Applicable Vehicles

Arbitration

Governing Law

Additional Lemon Laws

Introduction

A purchaser of a car expects that the car will be free of material defects. Lemon laws have been enacted by all 50 states and the District of Columbia to protect such purchasers when their newly purchased vehicle experiences one or more defects that have not been repaired within a reasonable period. The defects must result in the vehicle not conforming to the manufacturer's warranty to be eligible for lemon law protection. Court cases have concluded that an effective lemon law should reduce the inconvenience and frustration that a consumer faces in a lawsuit. They should provide a method of achieving satisfaction directly from the manufacturer by creating a framework establishing when vehicles should be repurchased or replaced by the manufacturer.(Hoffer, 1987)

Prior to the 1970s, recourse for purchasers of new cars with defects was available through the Uniform Commercial Code and the legal doctrine of warranty. A warranty is a contractual promise by a seller regarding the quality, character, or suitability of the goods sold to the buyer. A warranty holds a manufacturer responsible, or liable, for the manufacture of a product that is defective.(Francis,2004) However, many manufacturers provided warranties that were insufficient to restore the vehicle to its proper working condition, leaving consumers without a viable remedy that fully rectified the defect and made the consumer whole after purchasing a vehicle with one or more material defects. In 1975, Congress enacted the Magnuson-Moss Warranty Act designed to protect purchasers from such unfair consumer warranties. This is a federal statute that makes breach of warranty a violation of federal law.

This remedy failed to address all the issues for automobile owners, and by 1981, complaints about automobile dealers were the most frequent complaints received by the Federal Trade Commission. In response, states expanded on the protection provided by the Magnuson-Moss Warranty Act by enacting their own lemon laws specifically protecting the purchasers of cars in each state. (Taylor,2004)The Connecticut legislature enacted the first lemon law, and eventually all the states followed suit. Each state's lemon law varies as to its scope and coverage, but there are similarities among the laws.(Hoffer, 1987) Early court cases held that the newly enacted lemon laws did not create a new cause of action against the dealer who sold the car but rather clearly placed the liability solely on the manufacturer who built the vehicle in the first place. Since that time, some courts have determined that there is a cause of action against dealerships but not against distributors or private parties. The specific law of the applicable state should be researched if someone is experiencing problems with his or her vehicle, regardless of the seller. There are states that include the sellers of used or leased cars in their lemon law statutes.

If a vehicle makes a clicking noise while being driven, the cigarette lighter breaks off in the owner's hand, or the paint on the vehicle ...