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New Jersey Lemon Law Statutes
Title 56:12-29 - 56:12-49
56:12-29. Findings, intentions
The Legislature finds that the purchase of a new motor vehicle
is a major, high cost consumer transaction and the inability
to correct defects in these vehicles creates a major hardship
and an unacceptable economic burden on the consumer. It is the
intent of this act to require the manufacturer of a new motor
vehicle to correct defects originally covered under the manufacturer's
warranty which are identified and reported within a specified
period. It is the further intent of this act to provide procedures
to expeditiously resolve disputes between a consumer and a manufacturer
when defects in a new motor vehicle are not corrected within
a reasonable time, and to provide to award specific remedies
where the uncorrected defect substantially impairs the use, value,
or safety of the new motor vehicle.
L. 1988, c. 123, s. 1.
56:12-30. Definitions
2. As used in this act:
" Consumer" means a buyer or lessee, other than for
purposes of resale or sublease, of a motor vehicle; a person
to whom a motor vehicle is transferred during the duration of
a warranty applicable to the motor vehicle; or any other person
entitled by the terms of the warranty to enforce the obligations
of the warranty.
" Dealer" means a person who is actively engaged in
the business of buying, selling or exchanging motor vehicles
at retail and who has an established place of business.
" Director" means the Director of the Division of Consumer
Affairs in the Department of Law and Public Safety, or his designee.
" Division" means the Division of Consumer Affairs
in the Department of Law and Public Safety.
" Lease agreement" means a contract or other written
agreement in the form of a lease for the use of a motor vehicle
by a person for a period of time exceeding 60 days, whether or
not the lessee has the option to purchase or otherwise become
the owner of the motor vehicle at the expiration of the lease.
" Lessee" means a person who leases a motor vehicle
pursuant to a lease agreement.
" Lessor" means a person who holds title to a motor
vehicle leased to a lessee under a lease agreement or who holds
the lessor's rights under such an agreement.
" Lien" means a security interest in a motor vehicle.
" Lienholder" means a person with a security interest
in a motor vehicle pursuant to a lien.
" Manufacturer" means a person engaged in the business
of manufacturing, assembling or distributing motor vehicles,
who will, under normal business conditions during the year, manufacture,
assemble or distribute to dealers at least 10 new motor vehicles.
" Manufacturer's informal dispute settlement procedure" means
an arbitration process or procedure by which the manufacturer
attempts to resolve disputes with consumers regarding motor vehicle
nonconformities and repairs that arise during the vehicle's warranty
period.
" Manufacturer's warranty" or "warranty" means
any warranty, whether express or implied of the manufacturer,
of a new motor vehicle of its condition and fitness for use,
including any terms or conditions precedent to the enforcement
of obligations under the warranty.
" Motor vehicle" means a passenger automobile or motorcycle
as defined in R.S.39:1-1 which is purchased or leased in the
State of New Jersey or which is registered by the Division of
Motor Vehicles in the Department of Law and Public Safety, except
the living facilities of motor homes.
" Nonconformity" means a defect or condition which
substantially impairs the use, value or safety of a motor vehicle.
" Reasonable allowance for vehicle use" means the mileage
at the time the consumer first presents the motor vehicle to
the dealer or manufacturer for correction of a nonconformity
times the purchase price, or the lease price if applicable, of
the vehicle, divided by one hundred thousand miles.
L.1988,c.123,s.2; amended 1991,c.130; 1993,c.21,s.3.
56:12-31. Report of nonconformity; repairs
If a consumer reports a nonconformity in a motor vehicle to the
manufacturer or its dealer during the first 18,000 miles of operation
or during the period of two years following the date of original
delivery to a consumer, whichever is earlier, the manufacturer
shall make, or arrange with its dealer to make, within a reasonable
time, all repairs necessary to correct the nonconformity. Such
repairs if made after the first 12,000 miles of operation or
after the period of one year following the date of original delivery
to the consumer, whichever is earlier, shall be paid for by the
consumer, unless otherwise covered by a manufacturer's warranty,
and shall be recoverable as a cost under section 14 of this act.
L. 1988, c. 123, s. 3.
56:12-32. Refunds
- If, during the period specified in section 3 of this act,
the manufacturer or its dealer is unable to repair or correct
a nonconformity within a reasonable time, the manufacturer shall
accept return of the motor vehicle from the consumer. The manufacturer
shall provide the consumer with a full refund of the purchase
price of the original motor vehicle including any stated credit
or allowance for the consumer's used motor vehicle, the cost
of any options or other modifications arranged, installed, or
made by the manufacturer or its dealer within 30 days after the
date of original delivery, and any other charges or fees including,
but not limited to, sales tax, license and registration fees,
finance charges, reimbursement for towing and reimbursement for
actual expenses incurred by the consumer for the rental of a
motor vehicle equivalent to the consumer's motor vehicle and
limited to the period during which the consumer's motor vehicle
was out of service due to a nonconformity, less a reasonable
allowance for vehicle use. Nothing herein shall be construed
to preclude a manufacturer from making an offer to replace the
vehicle in lieu of a refund; except that the consumer may, in
any case, reject a manufacturer's offer of replacement and demand
a refund. Refunds shall be made to the consumer and lienholder,
if any, as their interests appear on the records of ownership
maintained by the Director of the Division of Motor Vehicles.
In the event that the consumer accepts an offer to replace the
motor vehicle in lieu of a refund, it shall be the manufacturer's
responsibility to insure that any lien on the returned motor
vehicle is transferred to the replacement vehicle.
- A consumer who leases a new motor vehicle shall have the same
remedies against a manufacturer under this section as a consumer
who purchases a new motor vehicle. If it is determined that the
lessee is entitled to a refund pursuant to subsection a. of this
section, the consumer shall return the leased vehicle to the
lessor or manufacturer and the consumer's lease agreement with
the motor vehicle lessor shall be terminated and no penalty for
early termination shall be assessed. The manufacturer shall provide
the consumer with a full refund of the amount actually paid by
the consumer under the lease agreement, including any additional
charges as set forth in subsection a. of this section if actually
paid by the consumer, less a reasonable allowance for vehicle
use. The manufacturer shall provide the motor vehicle lessor
with a full refund of the vehicle's original purchase price plus
any unrecovered interest expense, less the amount actually paid
by the consumer under the agreement. Refunds shall be made to
the lessor and lienholder, if any, as their interests appear
on the records of ownership maintained by the Director of the
Division of Motor Vehicles.
L. 1988, c. 123, s. 4.
56:12-33. Presumption of inability to correct noncomformity;
written notification
- It is presumed that a manufacturer or its dealer is unable
to repair or correct a nonconformity within a reasonable time
if, within the first 18,000 miles of operation or during the
period of two years following the date of original delivery of
the motor vehicle to a consumer, whichever is the earlier date:
- Substantially the same nonconformity has been subject to
repair three or more times by the manufacturer or its dealer
and the nonconformity continues to exist; or
- The motor vehicle is out of service by reason of repair for
one or more nonconformities for a cumulative total of 20 or more
calendar days sin ce the original delivery of the motor vehicle
and a nonconformity continues to exist.
- The presumption contained in subsection a. of this section
shall a pply against a manufacturer only if the manufacturer
has received written no tification, by or on behalf of the consumer,
by certified mail return receip t requested, of a potential claim
pursuant to the provisions of this act and has had one opportunity
to repair or correct the defect or condition within 10 calendar
days following receipt of the notification. Notification by the
consumer shall take place any time after the motor vehicle has
had substant ially the same nonconformity subject to repair two
or more times or has been out of service by reason of repair
for a cumulative total of 20 or more calendar days.
- The two-year term and the 20-day period specified in this
section shall be extended by any period of time during which
repair services are not available to the consumer because of
a war, invasion or strike, or a fire, flood, or other natural
disaster.
L. 1988, c. 123, s. 5.
56:12-34. Statements to consumers
- At the time of purchase in the State of New Jersey, the manufacturer
through its dealer, or at the time of lease in the State of New
Jersey, the lessor, shall provide directly to the consumer the
following written statement on a separate piece of paper, in
10-point bold-face type: "IMPORTANT: IF THIS VEHICLE IS
DEFECTIVE, YOU MAY BE ENTITLED UNDER NEW JERSEY LAW TO A REFUND
OF THE PURCHASE PRICE OR YOUR LEASE PAYMENTS. FOR COMPLETE INFORMATION
REGARDING YOUR RIGHTS AND REMEDIES UNDER THE RELEVANT LAW, CONTACT
THE NEW JERSEY DEPARTMENT OF LAW AND PUBLIC SAFETY, DIVISION
OF CONSUMER AFFAIRS."
- Each time a consumer's motor vehicle is returned from being
examined or repaired during the period specified in section 3
of this act, the manufacturer through its dealer shall provide
to the consumer an itemized, legible statement of repair which
indicates any diagnosis made and all work performed on the vehicle
and provides information including, but not limited to, the following:
a general description of the problem reported by the consumer
or an identification of the problem reported by the consumer
or an identification of the defect or condition; the amount charged
for parts and the amount charged for labor, if paid for by the
consumer; the date and the odometer reading when the vehicle
was submitted for repair; and the date and odometer reading when
the vehicle was made available to the consumer.
- Failure to comply with the provisions of this section constitutes
an unlawful practice pursuant to section 2 of P.L. 1960, c. 39
(C. 56:8-2).
L. 1988, c. 123, s. 6.
56:12-35. Sale, leasing of returned motor vehicle
7. - If a motor vehicle is returned to the manufacturer under
the provisions of this act or a similar statute of another state
or as the result of a legal action or an informal dispute settlement
procedure, it shall not be resold or re-leased in New Jersey
unless:
- The manufacturer provides to the dealer or lessor and the
dealer or lessor provides to the consumer the following written
statement on a separate piece of paper, in 10-point bold-face
type: "IMPORTANT: THIS VEHICLE WAS RETURNED TO THE MANUFACTURER
BECAUSE IT DID NOT CONFORM TO THE MANUFACTURER'S WARRANTY AND
THE NONCONFORMITY WAS NOT CORRECTED WITHIN A REASONABLE TIME
AS PROVIDED BY LAW;"
- The dealer or lessor obtains from the consumer a signed receipt
certifying, in a conspicuous and understandable manner, that
the written statement required under this subsection has been
provided. The director shall prescribe the form of the receipt.
The dealer or lessor may fulfill his obligation to obtain a signed
receipt under this paragraph by making such a notation, in a
conspicuous and understandable manner, on the vehicle buyer order
form accompanying the sale or lease of that vehicle; and
- The dealer or lessor, in accordance with the provisions of
section 1 of P.L.1993, c.21 (C.39:10-9.3), notifies the Director
of the Division of Motor Vehicles in the Department of Law and
Public Safety of the sale or transfer of ownership of the motor
vehicle.
- Nothing in this section shall be construed as imposing an obligation
on a dealer or lessor to determine whether a manufacturer is
in compliance with the terms of this section nor shall it be
construed as imposing liability on a dealer or lessor for the
failure of a manufacturer to comply with the terms of this section.
- Failure to comply with the provisions of this section constitutes
an unlawful practice pursuant to section 2 of P.L.1960, c.39
(C.56:8-2).
L.1988,c.123,s.7; amended 1993,c.21,s.2.
56:12-36. Informal dispute settlement procedure
- If a manufacturer has established, or participates in, an
informal dispute settlement procedure pursuant to section 110
of Pub. L. 93-637 (15 U.S.C. s.2310) and the rules promulgated
thereunder, or the requirements of this section, a consumer may
submit a dispute regarding motor vehicle nonconformities to the
dispute settlement body provided by that procedure but a consumer
shall not be required to first participate in the informal dispute
settlement procedure before participating in the division's summary
hearing procedure under this act.
- If a consumer chooses to use a manufacturer's informal dispute
settlement procedure established pursuant to this section, the
findings and decisions of the dispute settlement body shall state
in writing whether the consumer is entitled to a refund under
the presumptions and criteria set out in this act and the findings
and decisions shall be admissible against the consumer and the
manufacturer in any legal action.
- If the dispute settlement body determines that a consumer
is entitled to relief under this act, the consumer shall be entitled
to a refund as authorized by section 4 of this act.
- In any informal dispute settlement procedure established
pursuant
to this section:
- Participating arbitrators shall be trained in arbitration
and familiar with the provisions of this act.
- Documents shall not be submitted to any dispute settlement
body unless the documents have been provided to each of the parties
in the dispute at least seven days prior to commencement of the
dispute settlement hearing. The parties shall be given the opportunity
to comment on the documents in writing or with oral presentation.
- No party shall participate in the informal dispute settlement
procedure unless all other parties are also present and given
an opportunity to be heard, or unless the other parties consent
to proceeding without their presence and participation.
- A consumer shall be given an adequate opportunity to contest
a manufacturer's assertion that a nonconformity falls within
intended specifications for the vehicle by having the basis of
the manufacturer's claim appraised by a technical expert selected
and paid for by the consumer prior to the manufacturer's informal
dispute settlement procedure. If the dispute settlement body
rules in favor of the consumer, his costs and reasonable attorney's
fees shall also be awarded.
- A dispute shall not be heard if there has been a recent attempt
by the manufacturer to repair a consumer's vehicle, but no response
has yet been received by the dispute settlement body from the
consumer as to whether the repairs were successfully completed.
This provision shall not prejudice a consumer's right under this
section.
- The manufacturer shall provide, and the dispute settlement
body shall consider, any relevant technical service bulletins
which have been issued by the manufacturer regarding motor vehicles
of the same make and model as the vehicle that is the subject
of the dispute.
- Any manufacturer who establishes, or participates in, an
informal
dispute settlement procedure, whether it meets the requirements
of this section or not, shall maintain, and forward to the director
at six month intervals, the following records:
- The number of purchase price and lease price refunds requested,
the number awarded by the dispute settlement body, the amount
of each award and the number of awards satisfied in a timely
manner;
- The number of awards in which additional repairs or a warranty
extension was the most prominent remedy, the amount or value
of each award, and the number of awards satisfied in a timely
manner;
- The number and total dollar amount of awards in which some
form of reimbursement for expenses or compensation for losses
was the most prominent remedy, the amount or value of each award
and the number of awards satisfied in a timely manner; and
- The average number of days from the date of a consumer's
initial request to use the manufacturer's informal dispute settlement
procedure until the date of the decision and the average number
of days from the date of the decision to the date on which performance
of the award was satisfied.
L. 1988, c. 123, s. 8.
56:12-37. Dispute resolution
9. - A consumer shall have the option of submitting any dispute
arising under section 4 of this act to the division for resolution.
The director may establish a filing fee, to be paid by the consumer,
fixed at a level not to exceed the cost for the proper administration
and enforcement of this act. This fee shall be recoverable as
a cost under section 14 of this act. Upon application by the
consumer and payment of any filing fee, the manufacturer shall
submit to the State hearing procedure. The filing of the notice
in subsection b. of section 5 of P.L.1988, c.123 (C.56:12-33)
shall be a prerequisite to the filing of an application under
this section.
- The director shall review a consumer's application for dispute
resolution and accept eligible disputes for referral to the Office
of Administrative Law for a summary hearing to be conducted in
accordance with special rules adopted pursuant to the "Administrative
Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), by
the Office of Administrative Law in consultation with the director.
Immediately upon acceptance of a consumer's application for dispute
resolution, the director shall contact the parties and arrange
for a hearing date with the Clerk of the Office of Administrative
Law. The hearing date shall, to the greatest extent possible,
be convenient to all parties, but shall be no later than 20 days
from the date the consumer's application is accepted, unless
a later date is agreed upon by the consumer. The Office of Administrative
Law shall render a decision, in writing, to the director within
20 days of the conclusion of the summary hearing. The decision
shall provide a brief summary of the findings of fact, appropriate
remedies pursuant to this act, and a specific date for completion
of all awarded remedies. The director, upon a review of the proposed
decision submitted by the administrative law judge, shall adopt,
reject, or modify the decision no later than 15 days after receipt
of the decision. Unless the director modifies or rejects the
decision within the 15-day period, the decision of the administrative
law judge shall be deemed adopted as the final decision of the
director. If the manufacturer unreasonably fails to comply with
the decision within the specified time period, the manufacturer
shall be liable for penalties in the amount of $5,000.00 for
each day the manufacturer unreasonably fails to comply, commencing
on the day after the specified date for completion of all awarded
remedies.
- The Office of Administrative Law is authorized to issue
subpoenas to compel the attendance of witnesses and the production
of documents,
papers and records relevant to the dispute.
- A manufacturer or consumer may appeal a final decision to
the Appellate Division of the Superior Court. An appeal by a
manufacturer shall not be heard unless the petition for the appeal
is accompanied by a bond in a principal sum equal to the money
award made by the administrative law judge plus $2,500.00 for
anticipated attorney's fees and other costs, secured by cash
or its equivalent, payable to the consumer. The liability of
the surety of any bond filed pursuant to this section shall be
limited to the indemnification of the consumer in the action.
The bond shall not limit or impair any right of recovery otherwise
available pursuant to law, nor shall the amount of the bond be
relevant in determining the amount of recovery to which the consumer
shall be entitled. If a final decision resulting in a refund
to the consumer is upheld by the court, recovery by the consumer
shall include reimbursement for actual expenses incurred by the
consumer for the rental of a motor vehicle equivalent to the
consumer's motor vehicle and limited to the period of time after
which the consumer's motor vehicle was offered to the manufacturer
for return under this act, except in those cases in which the
manufacturer made a comparable vehicle available to the consumer
free of charge during that period. If the court finds that the
manufacturer had no reasonable basis for its appeal or that the
appeal was frivolous, the court shall award treble damages to
the consumer. Failure of the Office of Administrative Law to
render a written decision within 20 days of the conclusion of
the summary hearing as required by subsection b. of this section
shall not be a basis for appeal.
- The Attorney General shall monitor the implementation and
effectiveness of this act and report to the Legislature after
three years of operation, at which time a recommendation shall
be made either to continue under the procedures set forth in
this act or to make such modifications as may be necessary to
effectuate the purposes of this act.
L.1988,c.123,s.9; amended 1993,c.21,s.4.
56:12-38. Statistics
10. - The Division of Consumer Affairs shall maintain an index
of all motor vehicle disputes by make and model. The division
shall, at six-month intervals, compile and maintain statistics
indicating the record of manufacturer compliance with any settlement
procedure decisions. The statistics shall be public record.
- A manufacturer shall provide to the division all information
on private arbitration or private buy-back programs maintained
or instituted by the manufacturer. The information shall include
the type and number of vehicles to which these programs apply
and the reasons for establishing and maintaining the programs.
The manufacturer shall provide the division with updated information
at six month intervals.
L.1988,c.123,s.10; amended 1993,c.21,s.5.
56:12-39. Decision binding
A consumer shall not be required to participate in a manufacturer's
informal dispute settlement procedure or the division's summary
hearing procedure before filing an action in the Superior Court.
However, a decision rendered in a proceeding brought pursuant
to the division's summary hearing procedure shall be binding
on the consumer and the manufacturer, subject to the right of
appeal as set forth in subsection d. of section 9 of this act,
and shall preclude the institution of any other action in the
Superior Court under this act.
L. 1988, c. 123, s. 11.
56:12-40. Affirmative defense
It shall be an affirmative defense to a claim under this act
that the alleged nonconformity does not substantially impair
the use, value, or safety of the new motor vehicle or that the
nonconformity is the result of abuse, neglect, or unauthorized
modifications or alterations of the motor vehicle by anyone other
than the manufacturer or its dealer.
L. 1988, c. 123, s. 12.
56:12-41. Pleading
Any party to an action in the Superior Court of this State asserting
a claim, counterclaim or defense based upon violations of this
act shall mail a copy of the initial or responsive pleading containing
the claim, counterclaim or defense to the Attorney General within
10 days after filing the pleading with the court. Upon application
to the court in which the matter is pending, the Attorney General
may intervene or appear in any status appropriate to this matter.
L. 1988, c. 123, s. 13.
56:12-42. Attorney, expert fees; costs
14. In any action by a consumer against a manufacturer brought
in Superior Court or in the division pursuant to the provisions
of this act, a prevailing consumer shall be awarded reasonable
attorney's fees, fees for expert witnesses and costs.
L.1988,c.123,s.14; amended 1993,c.21,s.6.
56:12-43. Use of funds
All fees, penalties and costs collected by the division pursuant
to this act shall be appropriated for purposes of offsetting
costs associated with the handling and resolution of consumer
automotive complaints.
L. 1988, c. 123, s. 15.
56:12-44. Inherent design defect
A manufacturer shall certify to the division, within one year
of discovery, the existence of any inherent design defect common
to all motor vehicles of a particular model or make. Failure
to comply with this constitutes an unlawful practice pursuant
to section 2 of P.L. 1960, c. 39 (C. 56:8-2).
L. 1988, c. 123, s. 16.
56:12-45. Proceedings
The director may institute proceedings against any manufacturer
who fails to comply with any of the provisions of this act.
L. 1988, c. 123, s. 17.
56:12-46. No liability, cause of action
Nothing in this act shall be construed as imposing any liability
on a dealer, or creating a cause of action by a manufacturer
against a dealer, and nothing shall be construed as imposing
any liability on a dealer, or creating a cause of action by a
consumer against a dealer under section 4 of this act.
L. 1988, c. 123, s. 18.
56:12-47. No limitation on rights
Nothing in this act shall in any way limit the rights or remedies
which are otherwise available to a consumer under any other law.
L. 1988, c. 123, s. 19..
56:12-48. Agreements void
Any agreement entered into by a consumer for the purchase or
lease of a new motor vehicle which waives, limits or disclaims
the rights set forth in this act shall be void as contrary to
public policy.
L. 1988, c. 123, s. 20.
56:12-49. Rules, regulations
Within 120 days following enactment, the director shall, subject
to approval by the Attorney General and pursuant to the provisions
of the "Administrative Procedure Act," P.L. 1968, c.
410 (C. 52:14B-1 et seq.), adopt rules and regulations necessary
to effectuate the purposes of this act.
L. 1988, c. 123, s. 21.
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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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