Everyone has heard a car described as a “lemon,” but what exactly is a “lemon” and what rights do you have if you purchased a “lemon”?
What is a Lemon? Interestingly enough, the term “lemon” has no legal meaning. You can search long and hard, but the term will not be found in any statute or contract. From a legal perspective, the lay term “lemon” generally describes a new vehicle which fails to comply with the express or implied warranties made or given at the time of sale. Generally speaking, a warranty is a fancy legal term for a promise. In the case of a vehicle, the promise comes from the manufacturer (and sometimes the dealer) that the vehicle will perform in a certain manner or pursuant to a certain standard. A warranty (or promise) can be express or implied. For most intents and purposes, an implied warranty has the exact same effect as an express warranty. The only difference is in the nature of its creation. An express warranty is a written or oral statement, affirmation or representation made by the manufacturer or the dealer. Implied warranties are just that – warranties implied by law. Amongst other things, implied warranties include promises implied by law that the vehicle (i) is fit for ordinary usage, (ii) will pass without objection, and (iii) will run of even kind and quality. The concept of express and implied warranties is simple enough. The tricky part is determining when an express or implied warranty has been breached. The general rule is a breach exists if the vehicle cannot be brought into compliance with the express or implied warranties within “a reasonable number of attempts.” Lawyers love this type of language – they can spend hours researching and debating what constitutes a “reasonable” number of repair attempts. In an effort to bring more clarity to the situation, the California Legislature passed the Tanner Consumer Protection Law (Cal. Civ. §§1793.22, et seq., the “Tanner Law”). The Tanner Law seeks to establish a “black and white” test for what constitutes a “reasonable number of attempts.” Under the Tanner Law, a warranty is deemed breached if within the first 18 months:
Remedies The purchaser of a “lemon” has a number of different state and federal remedies. Under California’s Song-Beverly Consumer Warranty Act (Cal. Civ. §§1790, et seq., the “Song-Beverly Act”), once a breach of warranty is established, the purchaser is entitled to replacement of the vehicle or reimbursement for the cost of the vehicle (Cal. Civ. §§1794, 1793.2). This pro-consumer remedy extends to breaches which fall within the Tanner Law categories and breaches which rely on the “reasonable number of attempts” test. The Song-Beverly Act has significant additional “teeth” in that it provides for the recovery of attorney’s fees and costs, and allows for the recovery of a civil penalty up to 2 times the amount of actual damages in the case of a “willful” failure to comply (Cal. Civ. §1794). However, with a few limited exceptions, the Song-Beverly Act only applies to the sale of new cars, not used cars. In addition to the Song-Beverly Act, a buyer may also proceed under Article 2 of the Uniform Commercial Code (Cal. Com. §2101, et seq., the “UCC”). A UCC claim can seek damages arising from the breach of express or implied warranty equal the difference between the actual value of the nonconforming vehicle and the value of a vehicle which conformed with the applicable express or implied warranties (Cal. Com. §2714). Under the UCC, there is (i) no recovery of attorney’s fees (unless the express warranty contains an attorney fee clause), (ii) no right of replacement or reimbursement as found under the Song-Beverly Act, and (iii) no black-and-white test as found under the Tanner Act. However, the purchaser of a used vehicle can sue for damages under the UCC. There is also a federal remedy found in the Magnuson-Moss Warranty Act (15 U.S.C. §2301, et seq.). The remedies in the Magnuson-Moss Warranty Act are similar to those allowed under the UCC, and like the UCC, its protections extend to purchasers of used vehicles. Attorney’s fees and costs are allowed under the Magnuson-Moss Warranty Act. There are additional procedural issues to consider. First, sometimes, these remedies can only be exercised after complying with certain third-party dispute resolution procedures, so it is imperative to review the existence and terms of such procedures before filing a lawsuit. Second, each of the above statutes has a different statute of limitations (and different rules relating to the tolling, or extension, of such limitations periods). The Song-Beverly Act has the shortest limitations period (just one year), while the UCC and Magnuson-Moss Act have longer limitations periods (upwards of 4 years). So, while it is imperative not to rush to file a lawsuit before complying with possible dispute resolution procedures, it is equally important not to sit on your claim and have it barred by the statute of limitations.
4 Comments
5/4/2015 05:00:20 pm
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9/29/2015 11:21:54 pm
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11/22/2015 03:08:36 pm
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8/3/2017 06:53:01 am
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blogHi. I'm Stephen Flynn. Attorney and founder of the Law Offices of Stephen M. Flynn. This is my blog. Enjoy! Archives
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