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Tennessee
Lemon Law Statutes
Chapter 24, Motor Vehicle Warranties
55-24-201. Definitions.
As used in this part, unless the context otherwise requires:
- "Consumer" means the purchaser (other than for
purposes of resale) or the lessee of a motor vehicle, any person
to whom such motor vehicle is transferred during the duration
of an express warranty applicable to such motor vehicle, and
any other person entitled by the terms of such warranty to enforce
the obligations of the warranty. "Consumer" does not
include any governmental entity or any business or commercial
entity which registers three (3) or more vehicles;
- "Lessee" means any consumer who leases a motor
vehicle pursuant to a written lease agreement by which a manufacturer's
warranty was issued as a condition of sale or which provides
that the lessee is responsible for repairs to such motor vehicle;
- "Motor vehicle" means a motor vehicle as defined
in § 55-1-103, which is sold and subject to the registration
and certificate of title provisions in chapters 1-6 of this title
in the state of Tennessee, and classified as a Class C vehicle
according to § 55-4-111. For the purposes of this part, "motor
vehicle" does not include motorized bicycles as defined
in § 55-8-101, motor homes as defined in § 55-1-104, lawnmowers
or garden tractors, recreational vehicles or off-road vehicles
and vehicles over ten thousand (10,000) pounds gross vehicle
weight;
- "Substantially impair" means to render a motor
vehicle unreliable or unsafe for normal operation or to reduce
its resale market value below the average resale value for comparable
motor vehicles; and
- "Term of protection" means the term of applicable
express warranties or the period of one (1) year following the
date of original delivery of the motor vehicle to a consumer,
whichever comes first; or, in the case of a replacement vehicle
provided by a manufacturer to a consumer under this part, one
(1) year from the date of delivery to the consumer of the replacement
vehicle.
History
[Acts 1986, ch. 857, § 1.]
55-24-202. Nonconforming vehicles - Reports - Repairs.
If a new motor vehicle does not conform to all applicable express
warranties and the consumer reports the nonconformity, defect
or condition to the manufacturer, its agent or its authorized
dealer during the term of protection, the manufacturer, its agent
or its authorized dealer shall correct the nonconformity, defect
or condition at no charge to the consumer, notwithstanding the
fact that such repairs are made after the expiration of such
term. Any corrections or attempted corrections undertaken by
an authorized dealer under the provisions of this section shall
be treated as warranty work and billed by the dealer to the manufacturer
in the same manner as other work under warranty is billed.
History
[Acts 1986, ch. 857, § 2.]
55-24-203. Replacement or repair of vehicles - Refunds - Refinancing
agreements - Defenses.
- The manufacturer must replace the motor vehicle with a
comparable motor vehicle or accept return of the vehicle from
the consumer
and refund to the consumer the full purchase price if:
- The nonconformity, defect or condition substantially impairs
the motor vehicle; and
- The manufacturer, its agent or authorized dealer is unable
to conform the motor vehicle to any applicable express warranty
after a reasonable number of attempts.
- "Full purchase price" means the actual cost paid
by the consumer, including all collateral charges, less a reasonable
allowance for use; and
- (A) "Reasonable allowance for use" means that amount
directly attributable to use by a consumer prior to such 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 by reason of repair, plus a reasonable amount
for any damage not attributable to normal wear.
- A reasonable allowance for use shall not exceed one half
(1/2) of the amount allowed per mile by the internal revenue
service, as provided by regulation, revenue procedure or revenue
ruling promulgated pursuant to § 162 of the Internal Revenue
Code, for use of a personal vehicle for business purposes, plus
an amount to account for any loss to the fair market value of
the vehicle resulting from damage beyond normal wear and tear,
unless the damage resulted from nonconformity to an express warranty.
- Refunds shall be made to the consumer, and lienholder,
if
any, as their interests appear. The provisions of this section
shall not affect the interests of a lienholder; unless the lienholder
consents to the replacement of the lien with a corresponding
lien on the vehicle accepted by the consumer in exchange for
the vehicle having a nonconformity, the lienholder shall be paid
in full the amount due on the lien, including interest and other
charges, before an exchange of automobiles or a refund to the
consumer is made.
- In instances where a vehicle which was financed by the
manufacturer or its subsidiary or agent is replaced under the
provisions of
this section, the manufacturer, subsidiary or agent shall not
require the consumer to enter into any refinancing agreement
which would create any financial obligations upon such consumer
beyond those imposed by the original financing agreement.
- It shall be an affirmative defense to any claim under this
part:
- That an alleged nonconformity does not substantially impair
a motor vehicle; or
- That a nonconformity is the result of abuse, neglect or unauthorized
modifications or alterations of a motor vehicle by a consumer.
History
[Acts 1986, ch. 857, § 3.]
55-24-204. Leased vehicles - Refunds.
- In the case of a leased vehicle, refunds will be made to
the lessor and lessee as follows: The lessee will receive the
lessee cost and the lessor will receive the lease price less
the aggregate deposit and rental payments previously paid to
the lessor for the leased vehicle.
- For purposes of this section:
- "Lease price" means the aggregate of:
- Lessor's actual purchase cost;
- Freight, if applicable;
- Accessories, if applicable;
- Any fee paid to another to obtain the lease; and
- An amount equal to five percent (5%) of subdivision (b)(1);
- "Lessee cost" means the aggregate deposit and
rental payments previously paid to the lessor for the leased
vehicle
less service fees; and
- "Service fees" means the portion of a lease payment
attributable to:
- An amount for earned interest calculated on the rental payments
previously paid to the lessor for the leased vehicle at an annual
rate equal to two (2) points above the prime rate in effect on
the date of the execution of the lease; and
- Any insurance or other costs expended by the lessor for the
benefit of the lessee.
History
[Acts 1986, ch. 857, § 4.]
55-24-205. Presumptions - Term of protection - Notice to manufacturer.
- It shall be presumed that a reasonable number of attempts
have been undertaken to conform a motor vehicle to the applicable
express warranties, if:
- The same nonconformity has been subject to repair four (4)
or more times by the manufacturer or its agents or authorized
dealers, but such nonconformity continues to exist; or
- The vehicle is out of service by reason of repair for a cumulative
total of thirty (30) or more calendar days during the term of
protection.
- The term of protection and such thirty-day period shall
be extended by any period of time during which repair services
are
not available to the consumer because of a war, invasion, strike
or fire, flood or other natural disaster.
- It shall be the responsibility of the consumer, or the
representative of the consumer, prior to proceeding under the
provisions of § 55-24-203,
to give written notification by certified mail directly to the
manufacturer of the need for the correction or repair of the
nonconformity. If the address of the manufacturer is not readily
available to the consumer in the owner's manual or manufacturer's
warranty received by the consumer at the time of purchase of
the motor vehicle, such written notification shall be mailed
to an authorized dealer. The authorized dealer shall upon receipt
forward such notification to the manufacturer. If, at the time
such notice is given, either of the conditions set forth in subsection
(a) already exists, the manufacturer shall be given an additional
opportunity after receipt of the notification, not to exceed
ten (10) days, to correct or repair the nonconformity.
History
[Acts 1986, ch. 857, § 5.]
55-24-206. Informal dispute settlement procedure.
- If a manufacturer has established or participates in an
informal dispute settlement procedure which complies with the
provisions
of Title 16, Code of Federal Regulations, Part 703, as those
provisions read on November 3, 1983, and of this part, and causes
the consumer to be notified of the procedure, the provisions
of § 55-24-203 concerning refunds or replacement shall not apply
to any consumer who has not first resorted to such procedure.
The attorney general and reporter shall, upon application, issue
a determination whether an informal dispute resolution mechanism
qualifies under this section.
- The informal dispute settlement panel shall determine
whether the motor vehicle does or does not conform to all applicable
express warranties.
- If the motor vehicle does not conform to all applicable express
warranties, the informal dispute settlement panel shall then
determine whether the nonconformity substantially impairs the
motor vehicle.
- If the nonconformity does substantially impair the motor
vehicle, the informal dispute settlement panel shall then determine,
in accordance with this part, whether a reasonable number of
attempts have been made to correct the nonconformity.
- If a reasonable number of attempts have been made to correct
the nonconformity, the informal dispute settlement panel shall
determine whether the manufacturer has been given an opportunity
to repair the motor vehicle as provided in § 55-24-202.
- If the manufacturer has been given an opportunity to repair
the motor vehicle as provided in § 55-24-202, the panel shall
find that the consumer is entitled to refund or replacement as
provided in § 55-24-203(a).
- The informal dispute settlement panel shall determine the
amount of collateral charges, where appropriate.
History
[Acts 1986, ch. 857, § 6.]
55-24-207. Statute of limitations.
- Any action brought under this part shall be commenced within
six (6) months following:
- Expiration of the express warranty term; or
- One (1) year following the date of original delivery of the
motor vehicle to a consumer, whichever is the later date.
- The statute of limitations shall be tolled for the period
beginning on the date when the consumer submits a dispute to
an informal dispute settlement procedure as provided in § 55-24-206
and ending on the date of its decision or the date before which
the manufacturer, its agent or its authorized dealer is required
by the decision to fulfill its terms, whichever comes later.
History
[Acts 1986, ch. 857, § 7.]
55-24-208. Recovery of costs and expenses - Attorneys' fees.
If a consumer finally prevails in any action brought under this
part, such consumer may be allowed by the court to recover as
part of the judgment a sum equal to the aggregate amount of costs
and expenses, including attorneys' fees based on actual time
expended, determined by the court to have been reasonably incurred
by the plaintiff for or in connection with the commencement and
prosecution of such action.
History
[Acts 1986, ch. 857, § 8.]
55-24-209. Copy of repair order to consumer.
A manufacturer, its agent or authorized dealer shall provide
to the consumer, each time the consumer's vehicle is returned
from being serviced or repaired, a copy of the repair order indicating
all work performed on the vehicle, including, but not limited
to, parts and labor provided without cost or at reduced cost
because of shop or manufacturer's warranty, the date the vehicle
was submitted for repair, the date it was returned to the consumer,
and the odometer reading.
History
[Acts 1986, ch. 857, § 9.]
55-24-210. Election of remedies.
- Nothing in this part shall in any way limit the rights or
remedies which are otherwise available to a consumer under any
other law.
- In no event shall a consumer who has resorted to an informal
dispute settlement procedure be precluded from seeking the rights
or remedies available by law. However, if the consumer elects
to pursue any other remedy in state or federal court, the remedy
available under this part shall not be available insofar as it
would result in recovery in excess of the recovery authorized
by § 55-24-203 without proof of fault resulting in damages in
excess of such recovery.
- Any agreement entered into by a consumer for, or in connection
with, the purchase or lease of a new motor vehicle which waives,
limits or disclaims the rights set forth in this part shall be
void as contrary to public policy. These rights shall inure to
a subsequent transferee of such motor vehicle.
History
[Acts 1986, ch. 857, § 10.]
55-24-211. Commencing actions against sellers or lessors.
No action shall be commenced or maintained under the provisions
of this part against the seller or lessor of a motor vehicle
unless the seller or lessor is also the manufacturer, or unless
the manufacturer of the motor vehicle is not subject to service
of process in the state of Tennessee, or service cannot be secured
by the long-arm statutes of Tennessee, or unless the manufacturer
has been judicially declared insolvent.
History
[Acts 1986, ch. 857, § 12.]
55-24-212. Manufacturer's warranty - Disclosure to purchaser.
Any business entity which purchases a fleet of new motor vehicles,
titles such motor vehicles in the business entity's name and
sells such vehicles to an individual purchaser shall disclose
in writing any remaining manufacturer's warranty on such motor
vehicles to such purchaser.
History
[Acts 1994, ch. 672, § 1.]
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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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