| Lemon Law BackgroundThe term "Lemon-Law" is a | | | | state by state Lemon Law Summaries at: passing the |
| nick name derived from other common terms such as | | | | Magnuson-Moss Warranty Act, Congress specified a |
| "Lemon-Car", "Monday-cars" and "Friday-Cars".A | | | | number of requirements that warrantors must meet. |
| lemon car is a defective car that, when purchased | | | | Congress also directed the FTC to adopt rules to |
| new or used, is found by the purchaser to have | | | | cover other requirements.The FTC adopted three |
| numerous or severe defects not readily apparent | | | | Rules under the Act, the Rule on Disclosure of Written |
| before the purchase. Any vehicle with these issues | | | | Consumer Product Warranty Terms and Conditions |
| can be termed a "lemon car" and by extension, any | | | | (the Disclosure Rule), the Rule on Pre-Sale Availability |
| product which has major flaws that render it unfit for | | | | of Written Warranty Terms (the Pre-Sale Availability |
| its | | | | Rule), and the Rule on Informal Dispute Settlement |
| purpose can be described as a "lemon product".New | | | | Procedures (the Dispute Resolution Rule).In addition, the |
| vehicles directly from the factory may contain hidden | | | | FTC has issued an interpretive rule that clarifies certain |
| mechanical flaws or defects in workmanship, usually | | | | terms and explains some of the provisions of the Act. |
| caused by an error during the build process of the car. | | | | This section summarizes all the requirements under the |
| These errors can range from parts being installed | | | | Act and the Rules.The Act and the Rules establish |
| incorrectly, a tool that was used to build the car not | | | | three basic requirements that may apply to a |
| being removed, a batch of materials with structural or | | | | warrantor or a seller.A. As a warrantor, you must |
| chemical flaws or simply bad design.Usually, a car is | | | | designate, or title, your written warranty as either "full" |
| labeled a lemon if the same problem occurs 3 times in | | | | or "limited."B. As warrantor, you must state certain |
| a row over a short period, and previous attempts at | | | | specified information about the coverage of your |
| repair have not repaired the problem. In most cases, if | | | | warranty in a single, clear and easy to read |
| you get a lemon, lemon laws will make the company | | | | document.C. As a warrantor or a seller, you must |
| buy back the car or exchange it.Many of you might | | | | ensure that warranties are available where your |
| remember that during the late eighties the average | | | | warranted consumer products are sold so that |
| American consumer almost lost faith completely with | | | | consumers can read them before buying.The laws |
| the American made cars.The amount of lemon cars | | | | define what a lemon car is and require that the |
| along with the high rate of over the average visits to | | | | manufacturer, not the dealer, takes care of the |
| the car garages as well as the high repairs and spare | | | | defects. If a number of attempts have been made to |
| parts cost, caused many Americans to switch to | | | | repair a defect that significantly impairs the use, value |
| Japanese and even European cars.This was a period | | | | or safety of a car and the car continues to have this |
| of time when Americans were reluctant to go to the | | | | defect, the car is than considered to be a "lemon".Most |
| dealers garages and preferred to go to oil & lube | | | | statutes set up a warranty rights period of either 12 to |
| services only.At that time Lee Iacocca the CEO of | | | | 24 months or 12,000 to 24,000 miles. The defect(s) |
| Chrysler Corp identified immediately the problem of | | | | must occur sometime during this period.Many of the |
| mistrust of American consumers in American made | | | | state laws contain specific guidelines as to what |
| cars, Chrysler launched a campaign on national TV | | | | constitutes a sufficient number of attempts to repair, |
| promising to provide a bumper-to-bumper warranty | | | | and whether these attempts entitle the consumer to a |
| coverage for 50,000 miles or five years, which ever | | | | refund or replacement. These are:a. If the defect is a |
| comes first! Then GM came with the answer of | | | | serious safety defect involving brakes and or steering, |
| 60,000 miles or 6 years, | | | | the manufacturer is granted one attempt to repair.b. If |
| which ever comes first! Chrysler returned with the | | | | there is a safety defect that is not considered a |
| final stroke of 70,000 miles or 7 years which ever | | | | serious safety defect, the manufacturer has two |
| comes first.Few months later I went to the Buick main | | | | attempts to repair.c. For any other defect, the |
| dealer garage in long Island, I was seating in the waiting | | | | manufacturer is usually given three or four chances to |
| room, next to me was a very nervous guy, I asked | | | | repair the same defect.d. If at any time the vehicle is in |
| him why was he so upset with the garage, he | | | | the shop for a cumulative total of 30 days in a one |
| explained to me that even though he had this | | | | year period, with at least one of those days occurring |
| bumper-to-bumper warranty It doesn't cover labor and | | | | the first 12,000 miles.If any one of these of these |
| the damn car is more than a week in the garage and | | | | guidelines can be satisfied, the consumer is usually |
| they don't seems to be able to find what is the | | | | given the right to require repurchase or replacement of |
| problem with the car...The Magnuson-Moss Warranty | | | | his/her vehicle.Most lemon laws do allow an offset for |
| Act is Known as the "Lemon Law"The | | | | use of the vehicle by the consumer. Oftentimes, a |
| Magnuson-Moss Warranty Act is a United States | | | | reduction in the consumer's purchase price return is |
| federal law codified at 15 USC 50. Enacted in 1975, it is | | | | used in relation to the number of miles he/she had put |
| the federal statute that governs warranties on | | | | on the car. One law spells out the reduction in refund |
| consumer products.The Act was sponsored by | | | | for use as follows:(miles at time of refund X purchase |
| Senators Warren G. Magnuson of Washington and | | | | price)/100,000Only about one half of the lemon laws |
| Frank Moss of Utah, both Democrats. | | | | allow the consumer to recover attorney's fees in his |
| State Lemon Laws have some differences like | | | | her action. Those states that do allow attorney's fees |
| coverage of motorcycles and used vehicles, but there | | | | provide for a greater likelihood of success and |
| are some basic guidelines that they do share. (See 50 | | | | representation in warranty disputes. |