There are three main areas of law applicable to the lemon car. These are:

1. Magnuson-Moss Warranty-Federal Trade Commission Improvement Act
2. Uniform Commercial Code
3. State Warranty Rights Acts (Lemon Laws)

Magnuson-Moss Warranty-Federal Trade Commission Improvement Act The Magnuson-Moss law is a federal law giving consumers substantial rights in dealing with manufacturers of lemon cars. One often unrealized result of the Magnuson-Moss law was that manufacturers began to advertise and compete on the basis of their warranty. The law provides for certain minimum requirements of warranties and provides for disclosure of warranties prior to purchase.

For lemon car purposes, the law significantly affects the rights of car buyers. For any product which has a written warranty, if the product or any part thereof contains a defect after a reasonable number of attempts by the warrantor to repair the defect, the warrantor must permit the consumer to elect either a refund for or replacement of the product. We call this the three strikes and your out principle.

We have argued successfully to juries that the lemon manufacturers should be given three attempts to repair the defect. If they can't, the new car purchaser should not be required to continue to allow attempts to repair indefinitely.

A consumer may file a legal action in any court of general jurisdiction in the United States to enforce his rights under the Magnuson-Moss law. If the consumer finally prevails, he or she will be entitled to recover attorney's fees based on actual time spent. The Magnuson-Moss law allows the prevailing consumer to collect attorney's fees in cases of breach of warranty under state law to.

The provision allowing attorney's fees provides substantial economic pressure on the manufacturer to settle consumer disputes prior to court to keep its expenses down. For example, one retired gentleman bought a motor home in which he planned to travel during his golden years. He had problems with the motor home for which he eventually sued for breech of warranty. The jury awarded him $1,500.00. The Court awarded his attorneys $15,000.00 in attorneys fees based on their successful presentation of his claim. In Maseroti Automobiles, Inc. v. Caplan, the consumer was awarded $50,176.00 in attorney's fees.

A warrantor often includes the dealer selling or attempting to repair the vehicle. Most new car warranties provide that the Dealer will perform repairs on the vehicle at no charge to the consumer if the vehicle is returned to the dealer for service. For example, Mr. Freeman bought a Delorean from Hub Motor Company. He immediately had problems with the car overheating, with the door ajar light coming on among others. He took the car to Hub for repairs. Hub attempted to repair but eventually refused additional attempts when Delorean Motors went bankrupt and failed to pay Hub for the repair attempts under the warranty. The Georgia Court held that Hub was a warrantor because it had delivered the written warranty and had agreed to make repairs under that warranty, and that it must therefore replace the vehicle or refund the price.

The Magnuson-Moss Act prevents any warrantor giving a written warranty from excluding or modifying implied warranties applicable to the consumer goods under the Uniform Commercial Code. Implied warranties include the warranty of merchantability or fitness for ordinary use.

Uniform Commercial Code TARR BABY - The Uniform Commercial Code or UCC has been enacted in all 50 states and some territories of the United States. It is the primary source of law in all contracts dealing with the sale of goods. It contains what has been called acronymously called the TARR Baby. See article entitled Tender, Acceptance, Rejection and Revocation, the UCC's "TARR" -Baby, 24 Drake Law Rev. 52 (1974)

TENDER - The tender provisions of the Uniform Commercial Code contained in Section 2-601 provide that the buyer is entitled to reject any goods that fail in any respect conform to the contract. Unfortunately, new cars are often 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 therefore 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 inexact. One the one hand, the buyer must be given a reasonable time to inspect and that implies a right to use the vehicle. However, on the other hand, continued use or use beyond a reasonable time to inspect will be held to be 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.

An illustrative case of rejection follows: Mr. Zabriskie purchased a new 1966 Chevrolet Biscayne. After picking up the vehicle 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 vehicle 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 automobiles are a complete mystery. To have the automobile inspected by someone with sufficient expertise to disassemble the vehicle in order to 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 buyers 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 e 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 or thousands of miles later. And because quality is job one, and manufacturers are competing based on their warranties, the consumer always is assured that any nonconformities he does discover will be remedied.

What is a nonconformity substantially impairing the value of the vehicle? 1) A nonconformity may include a number of relatively minor defects whose cumulative total adds up to substantial impairment. This is the "Shaken Faith" Doctrine first stated in the Zabriskie 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." 2) A substantial nonconformity 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 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- As shown below, 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.

State Warranty Rights Acts (Lemon Laws)

Lemon laws have now been enacted in all but 2 states. While these lemon laws are not uniform, they do follow a common theme.

1. The statutes define lemon cars and required that manufacturers (not dealers)remedy the defects. Most statutes define "lemon-ness" in terms of a car that continues to have a defect that substantially impairs its use, value, or safety of the car after a reasonable number of attempts to repair the car.
2. Most statutes set up a warranty rights period of either 12 to 24 months or 12,000 to 24 thousand miles. The defects must occur sometime in this period.
3. Most of the statutes contain a three or four prong definition of when a manufacturer has had a sufficient number of attempts to repair, entitling the consumer to a refund or a replacement. These are:
   1. If the defect is a serious safety defect involving brakes steering, the manufacturer is granted one attempt to repair.
   2. If the defect is a safety defect not involving a serious safety defect, the manufacturer has two attempts to repair.
   3. For any other defect, the manufacturers are usually granted three or four chances to repair the same defect.
   4. If at any time the vehicle is in the shop for a cumulative total of 30 days in a one year period, at least one of those days occurring in the first 12 months or 12,000 miles.

   If any of the four prongs are satisfied, the consumer is generally granted the right to require repurchase or replacement of her vehicle.

4. Most lemon laws allow an offset for use of the vehicle for the consumer. This reasonable offset for use, often involved a reduction in the consumer's purchase price return in relation to the number of miles he has put on the car. One law expresses the reduction in refund for use as follows:

   (miles at time of refund x purchase price)/100,000

   The consumer can often effectively argue that he should not be charged for miles that were put on the vehicle after the initial attempt to repair the offending defect. For example, what if the consumer allows a dealer to make several attempts to repair a defect over a period of several thousand miles? Should the manufacturer be allowed to reduce his refund for the period of time he was unsuccessful in repairing the defect? Our answer is no and the above formula should be computed using the mileage at the time of the first attempt. This can often make a difference of several hundred dollars to the consumer.

5. Only about one half of the lemon laws allow the consumer to recover attorney's fees in his action. Those states that do allow attorney's fees certainly provide greater access to representation in warranty disputes and greater likelihood of success.

Your State's Law

See the Bibliography Page for Links to Most State Laws

    ALABAMA                 Ala. Code §§ 8-20A-1--8020A-6
    ALASKA                  ALASKA STAT.  §§ 45.45.300-.900
    ARIZONA                 ARIZ. REV. STAT. ANN. §§ 44-1261 to -1265
    ARKANSAS                Ark. Stat. Ann. §4-90-401
    CALIFORNIA              CAL. CIV. CODE § 1793.2
    COLORADO                COLO. REV. STAT. §§ 42-12-101 to -107
    CONNECTICUT             CONN. GEN. STAT. § 42-179 to -186
    DELAWARE                DEL. CODE ANN. tit. 6, §§ 5001-09
    DC                      D.C. CODE AN. §§ 40-1301 to -1309
    FLORIDA                 FLA. STAT. ANN. §§ 681.10-.111
    GEORGIA                 O.C.G.A. § 10-1-780
    HAWAII                  HAWAII REV. STAT. § 481I-1
    ILLINOIS                815 ILCS 380/1-/8
    INDIANA                 Ind. Code § 24-5-13
    IOWA                    IOWA CODE ANN. § 322G.1
    KANSAS                  KAN. STAT. ANN. §§ 50-645--664
    KENTUCKY                KY. REV. STAT. ANN. §§ 367.840 -.846
    LOUISIANA               LA. REV. STAT. ANN. §§ 51:1941-48
    MAINE                   ME. REV. STAT. ANN. tit. 10, §§ 1161-68
    MARYLAND                MD. COM. LAW CODE ANN. § 14-1501 to -1504
    MASSACHUSETTS           MASS. GEN. LAWS ANN. ch. 90, § 7N 1/2
    MICHIGAN                MICH. COMP. LAWS ANN. §§ 257.1401-.1408
    MINNESOTA               MINN. STAT. ANN. §325F.665
    MISSISSIPPI             MISS. CODE ANN. § 63-17-151 to -165
    MISSOURI                MO. ANN. STAT. §§ 407.560-.579
    MONTANA                 MONT. CODE ANN. §§ 61-4-501 to -533
    NEBRASKA                NEB. REV. STAT. §§ 60-2701 to -2709
    NEVADA                  NEV. REV. STAT. §§ 597.600-.680
    NEW HAMPSHIRE           N.H. REV. STAT. ANN. § 357-D:1
    NEW JERSEY              N.J. STAT. ANN. §§ 56:12-30 to -46
    NEW MEXICO              N.M. STAT. ANN. 57-16A-1 to -9
    NEW YORK                N.Y. GEN. BUS. LAW § 198-a
    NORTH CAROLINA          N.C. GEN. STAT. § 20.351
    NORTH DAKOTA            N.D. CENT. CODE 51-07-16 to -22
    OHIO                    OHIO REV. CODE ANN. 1345.71 -.77
    OKLAHOMA                OKLA. STAT. ANN. 15, § 901
    OREGON                  OR. REV. STAT. 646.315-375
    PENNSYLVANIA            73 PA. STAT. ANN. §§ 1951-63
    RHODE ISLAND            R.I. GEN. LAWS §§ 31-5.2-1 to -13
    SOUTH CAROLINA          S.C. Code Ann. §§56-28-10
    SOUTH DAKOTA            S.D. Code Ann. §23-6D-1
    TENNESSEE               TENN. CODE ANN. 55-24-201 to -209
                 http://www.tba.org/LawBytes/T5_1406.html
    TEXAS                   TEX. REV. CIV. STAT. ANN. art. 4413 (36) § 607
    UTAH                    UTAH CODE ANN. 13-20-1 to -7
    VERMONT                 VT. STAT. ANN. tit. 9, §§ 4170-81
    VIRGINIA                VA. CODE § 59.1-207.9 to 207.16
    WASHINGTON              WASH. REV. CODE ANN. §19.118.005
    WEST VIRGINIA           W.VA. CODE §§46A-6A-1 to -9
    WISCONSIN               WIS. STAT. ANN. § 218.015
    WYOMING                 WYO. STAT. ANN. § 40-17-101

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