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North
Dakota Lemon Law Statutes
North Dakota Century Code Sections 51-07-16 through 51-07-22
Summary of Law
North Dakota's lemon law (North Dakota Century Code Sections
51-07-16 through 51-07-22) gives owners of new vehicles the right
to get a full refund or a more reliable replacement, minus a
reasonable allowance for use of the new vehicle. The lemon law
applies only to new vehicle purchases. It does not apply to motorcycles
or motor homes.
Under North Dakota law, you have little protection against defects
that surface after you buy a used car, unless you purchased an
extended warranty or you can prove the seller lied about the
condition of the vehicle.
Minor problems with new vehicles which require continual repairs
are not covered under the lemon law. Your new car's clock that
continually runs 25 minutes fast or a trunk light that repeatedly
flickers out is annoying, but it does not make the car a real
lemon. Lemon Aid
North Dakota's lemon law specifically states what must happen
before your car is determined to be a true lemon and what you
must do to use the law.
The defect must be something that "substantially impairs
the use and market value of the passenger motor vehicle," and
the dealer must be given a "reasonable
51-07-16. Definitions.
As used in sections 51-07-16 through 51-07-22,
and unless the context otherwise requires:
- "Consumer" means the purchaser or lessee, other
than for purposes of resale or lease, of a passenger motor vehicle
normally used for personal, family, or household purposes. The
term includes any person to whom the passenger motor vehicle
is transferred for the same purposes during the duration of an
express warranty applicable to that passenger motor vehicle,
and any other person entitled by the terms of the warranty to
enforce the obligations of the warranty.
- "Passenger motor vehicle" means a passenger motor
vehicle as defined in section 39-01-01 or a truck with registered
gross weight of ten thousand pounds [4536 kilograms] or less
which is sold or leased in this state. The term does not include
a house car, as defined in section 39-01-01. 51-07-17. Duty of
manufacturer to repair defective passenger motor vehicles. If
a new passenger motor vehicle does not conform to all applicable
express warranties, and the consumer reports the nonconformity
to the manufacturer, its agent, or its authorized dealer during
the term of the express warranties or during the period of one
year following the date of original delivery of the passenger
motor vehicle to a consumer, whichever is the earlier date, the
manufacturer, its agent, or its authorized dealer shall make
the repairs necessary to conform the passenger motor vehicle
to the express warranties, notwithstanding the fact that the
repairs might be made after the expiration of the warranty or
one-year period.
51-07-18. Duty to replace defective passenger motor vehicle
or
refund price
Prerequisite of using available informal dispute
settlement process.
- If the manufacturer, its agent, or its authorized dealer is
unable to make the passenger motor vehicle conform to any applicable
express warranty by repairing or correcting any defect or condition
that substantially impairs the use and market value of the passenger
motor vehicle, after a reasonable number of attempts, the manufacturer
shall replace that passenger motor vehicle with a comparable
passenger motor vehicle or accept return of the passenger motor
vehicle from the consumer, and refund to the consumer the full
purchase price, including all collateral charges, less a reasonable
allowance for the consumer's use of the vehicle not exceeding
ten cents per mile [1.61 kilometers] driven or ten percent of
the purchase price, whichever is less. Refunds must be made to
the consumer, the lessor, and the lienholder, if any, as their
interests may appear. A reasonable allowance for use is the amount
directly attributable to use by the consumer before the consumer's
first report of the nonconformity to the manufacturer, agent,
or dealer, and during any subsequent period when the vehicle
is not out of service for repair.
- It is an affirmative defense to any claim under sections 51-07-16
through 51-07-22:
- That an alleged nonconformity does not substantially impair
the use and market value of the passenger motor vehicle; or
- That a nonconformity is the result of abuse, neglect, or
unauthorized modifications or alterations of the passenger
motor vehicle by a consumer.
- If a manufacturer has established or participates in an informal
dispute settlement procedure that substantially complies with
the substantive rules of the federal trade commission, 16 CFR
703, or if the manufacturer participates in a consumer and industry
appeals, arbitration, or mediation appeals board whose decisions
are binding on the manufacturer, the remedy under subsection
1 is not available to a consumer who has not first resorted to
that procedure. If the consumer requests an oral presentation
before the board or dispute settlement mechanism, the hearing
must take place in the state in which the consumer resides. The
attorney general shall, on application, issue a determination
of whether an informal dispute resolution mechanism qualifies
under this subsection.
51-07-18.1. Refunds for leased passenger motor vehicles.
In any
case in which a refund is tendered by a manufacturer for a leased
motor vehicle under section 51-07-18, the refund and rights of
the motor vehicle lessor, lessee, and manufacturer are as follows:
- The manufacturer shall provide to the lessee the sum of all
payments previously paid to the motor vehicle lessor by the lessee
less a reasonable allowance for the consumer's use of the vehicle.
Payments include all cash payments, security deposits, and trade-in
allowance, if any, tendered by the lessee to the motor vehicle
lessor under the lease agreement.
- The manufacturer shall provide to the motor vehicle lessor
the sum of the following:
- The lessor's actual purchase cost, less payments made by
the lessee;
- The freight cost, if applicable;
- The cost for dealer or manufacturer installed accessories,
if applicable; and
- An amount equal to five percent of the lessor's actual purchase
cost as provided in subdivision a. The amount in this subdivision
is in lieu of any early termination costs or penalties described
in the lease agreement.
- Upon return of the passenger motor vehicle, the consumer's
lease agreement with the lessor is terminated and no penalty
for early termination may be assessed.
- Any refund to be paid to the motor vehicle lessor must be
made to the lessor and lienholder, if any, as their interests
may appear.
51-07-19. Presumptions.
- It is presumed that a reasonable number of attempts have been
undertaken to make a passenger motor vehicle conform to the applicable
express warranties, if:
- The same nonconformity has continued to exist, despite having
been subject to repair more than three times by the manufacturer,
its agent, or its authorized dealer, within the express warranty
term or within one year of the date of original delivery of
the passenger motor vehicle to a consumer, whichever is the
earlier date.
- The passenger motor vehicle is out of service for repair
for a cumulative total of at least thirty business days during
the warranty term or in a year, whichever is less.
- The term of an express warranty, the one-year period, and
the thirty-day period, are extended by any period during which
repair services are not available to the consumer because of
war, invasion, strike, fire, flood, or other natural disaster.
- The presumption does not apply against a manufacturer unless
the manufacturer has received prior direct notification from
or on behalf of the consumer and an opportunity to cure the alleged
defect.
51-07-20. Exclusive remedy.
A consumer who elects to proceed
under sections 51-07-16 through 51-07-22 is foreclosed from pursuing
any other remedy arising out of the facts and circumstances which
gave rise to the claim under sections 51-07-16 through 51-07-22.
51-07-21. Limitation of actions. An action brought under sections
51-07-16 through 51-07-22 must be commenced within six months
after the earlier of: 1. Expiration of the express warranty term;
or 2. Eighteen months after the date of original delivery of
the passenger motor vehicle to a consumer. 51-07-22. Resale of
returned passenger motor vehicles - Penalty.
- A person may
not sell or lease in this state a passenger motor vehicle that
was returned to the manufacturer in accordance with sections
51-07-16 through 51-07-22, unless the manufacturer provides:
- The same express warranty it provided to the original purchaser,
except the term of the warranty must be for at least twelve
thousand miles or twelve months after the date of resale, whichever
is earlier; and
- The purchaser a statement on a separate document that must
be signed by the manufacturer and the purchaser and must be
in ten point, capitalized type, in substantially the following
form: "IMPORTANT: THIS VEHICLE WAS RETURNED TO THE MANUFACTURER
BECAUSE DEFECTS COVERED BY THE MANUFACTURER'S EXPRESSED WARRANTY
WERE NOT REPAIRED WITHIN A REASONABLE TIME AS PROVIDED BY NORTH
DAKOTA LAW".
- A person may not ship or deliver for resale or lease in another
state a passenger motor vehicle returned to the manufacturer
in accordance with sections 51-07-16 through 51-07-22 unless
full disclosure of the reasons for return is made to any prospective
buyer.
- Violation of this section is a class B misdemeanor.
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The
Magnuson-Moss Warranty Act
The Magnuson-Moss Warranty Act is a Federal Law that protects the buyer of any product which costs more than $25 and comes with an express written warranty.
This law applies to any product that you buy that does not perform as it should.
Your car is a major investment, rationalized by the peace of mind that flows from its expected dependability and safety. Accordingly, you are entitled
to expect an automobile properly constructed and regulated to provide reasonably safe, trouble-free, and dependable transportation – regardless
of the exact make and model you bought. Unfortunately, sometimes these principles do not hold true and defects arise in automobiles. Although one defect
is not actionable, repeated defects are as there exists a generally accepted rule that unsuccessful repair efforts render the warrantor liable. Simply
put, there comes a time when “enough is enough” – when after having to take your car into the shop for repairs an inordinate number
of times and experiencing all of the attendant inconvenience, you are entitled to say, ‘That’s all,’ and revoke, notwithstanding the
seller’s repeated good faith efforts to fix the car. The rationale behind these basic principles is clear: once your faith in the vehicle is shaken,
the vehicle loses its real value to you and becomes an instrument whose integrity is impaired and whose operation is fraught with apprehension. The question
thus becomes when is “enough”?
As you know, enough is never enough from your warrantor’s point of view and you should simply continue to have your defective vehicle repaired – time
and time again. However, you are not required to allow a warrantor to tinker with your vehicle indefinitely in the hope that it may eventually be fixed.
Rather, you are entitled to expect your vehicle to be repaired within a reasonable opportunity. To this end, both the federal Moss Warranty Act, and
the various state “lemon laws,” require repairs to your vehicle be performed within a reasonable opportunity.
Under the Magnuson-Moss Warranty
Act, a warrantor should perform adequate repairs in at least two, and possibly three, attempts to correct a particular defect. Further, the Magnuson-Moss
Warranty Act’s reasonableness requirement applies to your vehicle as a whole rather than to each individual defect
that arises. Although most of the Lemon Laws vary from state to state, each individual law usually require a warrantor to cure a specific defect within
four to five attempts or the automobile as a whole within thirty days. If the warrantor fails to meet this obligation, most of the lemon laws provide
for a full refund or new replacement vehicle. Further, this reasonable number of attempts/reasonable opportunity standard, whether it be that of the
Magnuson-Moss Warranty Act or that of the Lemon Laws, is akin to strict liability – once this threshold has been met, the continued existence of
a defect is irrelevant and you are still entitled to relief.
One of the most important parts of the Magnuson-Moss Warranty Act is its fee shifting
provision. This provision provides that you may recover the attorney fees incurred in the prosecution of your case if you are successful – independent
of how much you actually win. That rational behind this fee shifting provision is to twofold: (1) to ensure you will be able to vindicate your rights
without having to expend large sums on attorney's fees and (2) because automobile manufacturers are able to write off all expenses of defense as a
legitimate business expense, whereas you, the average consumer, obviously does not have that kind of economic staying power. Most of the Lemon Laws contain
similar fee shifting provisions.
You may also derive additional warranty rights from the Uniform Commercial Code; however, the Code does not allow you
in most states to recover your attorney fees and is also not as consumer friendly as the Magnuson-Moss Warranty Act or the various state lemon laws.
The narrative information on Magnuson-Moss, UCC and lemon laws on these pages is provided by Marshall Meyers, attorney.
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Uniform
Commercial Code Summary
The Uniform Commercial Code or UCC has been enacted in all 50 states and some of the territories of the United States. It is the primary source of law
in all contracts dealing with the sale of products. The TARR refers to Tender, Acceptance, Rejection, Revocation and applies to different aspects of
the consumer's "relationship" with the purchased goods.
TENDER -
The tender provisions of the Uniform Commercial Code contained in Section2-601 provide that the buyer is entitled to reject any goods that fail in
any respect to conform to the contract. Unfortunately, new cars are often technically complex and their innermost workings are beyond the understanding
of the average new car buyer. The buyer, therefore, does not know whether the goods are then conforming.
ACCEPTANCE -
The new car buyer accepts the goods believing and expecting that the manufacturer will repair any problem he has with the goods under the warranty.
REJECTION
-
The new car buyer may discover a problem with the vehicle within the first few miles of his purchase. This would allow the new car buyer to reject
the goods. If the new car buyer discovers a defect in the car within a reasonable time to inspect the vehicle, he may reject the vehicle. This period
is not defined. On the one hand, the buyer must be given a reasonable time to inspect and that reasonable time to inspect will be held as an acceptance
of the vehicle. The Courts will decide this reasonable time to inspect based on the knowledge and experience of the buyer, the difficulty in discovering
the defect, and the opportunity to discover the defect.
The following is an example of a case of rejection: Mr. Zabriskie purchase a new 1966 Chevrolet Biscayne. After picking up the car on Friday evening,
while en route to his home 2.5 miles away, and within 7/10ths of a mile from the dealership, the car stalled and stalled again within 15 feet. Thereafter,
the car would only drive in low gear. The buyer rejected the vehicle and stopped payment on his check. The dealer contended that the buyer could not
reject the car because he had driven it around the block and that was his reasonable opportunity to inspect. The New Jersey Court said;
To the layman,
the complicated mechanisms of today's automobile are a complete mystery. To have the automobile inspected by someone with sufficient expertise to disassemble
the vehicle in order the discover latent defects before the contract is signed, is assuredly impossible and highly impractical. Consequently, the first
few miles of driving become even more significant to the excited new car buyer. This is the buyer's first reasonable opportunity to enjoy his new vehicle
to see if it conforms to what it was represented to be and whether he is getting what he bargained for. How long the buyer may drive the new car under
the guise of inspection of new goods is not an issue in the present case because 7/10th of a mile is clearly within the ambit of a reasonable opportunity
to inspect. Zabriskie Chevrolet, Inc. v. Smith, 240 A. 2d 195(1968)
It is suggested that Courts will tend to excuse use by consumers if possible.
REVOCATION -
What happens when the consumer has used the new car for a lengthy period of time? This is the typical lemon car case. The UCC provides that a buyer
may revoke his acceptance of goods whose non-conformity substantially impairs the value of the goods to him when he has accepted the goods without
discovery of a non-conformity because it was difficult to discover or if he was assured that non-conformities would be repaired. Of course, the average
new car buyer does not learn of the nonconformity until hundreds of thousands of miles later. And because quality is job one, and manufacturers are
competing on the basis of their warranties, the consumer always is assured that any noncomformities he does discover will be remedied.
What is a noncomformity substantially impairing the value of the vehicle?
- A noncomformity may include a number of relatively minor defects whose cumulative total adds up to a substantial impairment. This is the "Shake
Faith" Doctrine first stated in the Zabrisikie case. "For a majority of people the purchase of a new car is a major investment, rationalized
by the peace of mind that flows from its dependability and safety. Once their faith is shaken, the vehicle loses not only its real value in their eyes,
but becomes an instrument whose integrity is substantially impaired and whose operation is fraught with apprehension".
- A substantial noncomformity may include a failure or refusal to repair the goods under the warranty. In Durfee V. Rod Baxter Imports, the Minnesota
Court held that the Saab owner that was plagued by a series of of annoying minor defects and stalling, which were never repaired after a number of attempts,
could revoke, "if repairs are not successfully undertaken within a reasonable time", the consumer may elect to revoke.
- Substantial Non Conformity and Lemon Laws often define what may be considered a substantial impairment. These definitions have been successfully used
to flesh out the substantial impairment in the UCC.
Additional narrative information on Magnusson-Moss, UCC and lemon laws on these pages is provided by T. Michael Flinn, attorney.
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