Overview of Selected Consumer Laws | The Lemon Law

          A major area of interest to consumers concerns the purchase of a defective product. The California Song-Beverly Consumer Warranty Act provides warranty protections to purchasers and lessees of both new, and in some cases, used consumer goods. A consumer good is virtually any product purchased by an individual for mostly non-commercial use, except clothing and consumables.  Most protections apply to new products accompanied by a manufacturer's written warranty, where the manufacturer or manufacturer's agent within California is unable to repair the product after a reasonable number of attempts, during the warranty period.  The warranty period is extended while in for repairs, and for any delay in repairs not caused by the buyer.   The warranty does not expire until the defect has been fixed.   It will be extended if the warranty repairs did not remedy the defect, and the manufacturer is so notified within 60 days.

          Retailers who provide their own written warranty are equally obligated under the ACT to the same extent as manufacturers.

          The product is subjected to repair if it is brought in for repair, regardless of whether repairs are attempted.  What qualifies as a reasonable number of repairs varies depending on the product, and its defect.  The purchaser is normally required to deliver the product for repairs to the manufacturer's service and repair facilities within this state for repair, unless, due to reasons of size, weight, the defect, or other reasonable factor, delivery cannot reasonably be accomplished, in which case delivery is effected by written notice to the manufacturer or manufacturer's agent within California.  A manufacturer giving a written warranty is required to maintain in California either its own repair facilities, or independently contracted service and repair facilities, reasonably close to where its products are sold.

          The law presumes that manufacturers will occasionally produce products that prove defective, and gives them a reasonable opportunity to fix them.  The more expensive and complicated the product is, the more that can go wrong, and the more reasonable the law presumes it is to allow the manufacturer a chance to make it right before allowing a refund or replacement. A department store's policy of offering a refund or replacement, without attempting repair, is simply based upon its customer service policy, or the economics involved, and not the lemon law.

          If the new consumer product turns out to be a lemon, i.e., has a defect which was not repaired to conform to the written warranty, after a reasonable number of attempts, the Act obligates the manufacturer to provide, at its option, either a replacement, or a refund (less a reasonable amount for the customer's use before the defect was discovered).

          With respect to new motor vehicles (including demonstrators, and the chassis, cab, and propulsion components of a motor home, but not motorcycles or off-highway non-registered vehicles), the buyer gets the option to pick either a replacement vehicle or a refund, if the manufacturer's dealership is unable to service and repair the vehicle to conform to the written warranty after a reasonable number of attempts.

          Further, unlike other consumer laws, a business may also qualify as a consumer entitled to the same rights under the Lemon Law.  The definition of a "consumer good"  is expanded to include a new motor vehicle with a gross vehicle weight under 10,000 pounds that is bought or used primarily for business purposes by a person, including a partnership, limited liability company, corporation, association, or any other legal entity, to which not more than five (5) motor vehicles are registered in California.

          In the case of replacement, the manufacturer shall replace the buyer’s vehicle with a new motor vehicle substantially identical to the vehicle replaced.

          In the case of a refund (restitution), the manufacturer must make restitution in an amount equal to the actual price paid or payable by the buyer, including any charges for transportation and manufacturer-installed options, but excluding non-manufacturer items installed by a dealer or the buyer.

          Either the replacement or restitution option includes reasonable repair costs, towing, rental car expenses, and finance charges, actually incurred, and includes the initial tax, license, registration, and other official fees.

          The manufacturer is entitled to deduct an offset from the restitution amount, or charge the buyer electing the  replacement option, for the use by the buyer before the vehicle was first delivered for repair of the defect, calculated by pro-rating the actual price paid or payable over 120,000 miles.

          The Act contains a rebuttable presumption provision regarding whether or not a reasonable number of attempts have been attempted, with respect to new motor vehicles.  This means if the buyer meets or exceeds the minimum standards, and other prerequisites are followed, it is presumed a reasonable number of attempts have been made.  The manufacturer is free, however, to attempt to rebut the presumption, by convincing the judge or jury that, under the circumstances, a reasonable number of attempts have not been yet made.  A buyer is not obligated to use the presumption provision, and is free to attempt to convince a judge or jury that a reasonable number of attempts have been made, as with any other consumer product.

          The optional presumption provision presumes that a reasonable number of attempts have been made, if, during the first 18 months or 18,000 miles, whichever occurs first, EITHER:

1. A defect likely to cause death or serious bodily injury if the vehicle is driven, has been subjected to repair two or more times, or a defect which substantially impairs the vehicle's use, value, or safety has been subjected to repair four or more times, AND, in either case, IF the manufacturer has clearly and conspicuously disclosed to the buyer, with the warranty or the owner's manual, the requirement that the buyer must notify the manufacturer directly, THEN, the buyer must at least once, direct notify the manufacturer of the need for repair of the nonconformity, by sending notification to the address, if any, specified clearly and conspicuously by the manufacturer in the warranty or owner's manual; OR

2. The vehicle has been in the shop of the manufacturer's authorized service and repair facility (an authorized dealer) for repair of one or more nonconformities for a total of more than 30 calendar days.

          The presumption provision further requires the buyer to submit the controversy to arbitration, if the manufacturer timely notifies the buyer that it maintains a qualified third party dispute resolution process, which is not binding on the buyer, but is binding on the manufacturer.  The results are admissible at trial if the buyer is dissatisfied, or the manufacturer fails to comply, and the buyer then files a lawsuit.  The arbitration process is not required to include remedies in the form of awards of punitive damages or multiple damages, attorneys' fees, or of any damages other than reasonable repair, towing, and rental car costs actually incurred by the buyer.  Most Lemon Law lawyers advise against opting to try the arbitration process at all. and instead recommend filing a lawsuit in Court.

          The Act also provides provisions detailing the existence and duration of implied warranties, which by law accompany the sale of new and used consumer goods, including an implied warranty that a product meets its contract description and is fit for the ordinary purposes for which such goods are used, and if a seller has reason to know any particular purpose for which the consumer goods are required that the buyer is relying on the skill and judgment of the seller to select and furnish suitable goods, then there is an implied warranty that the goods shall be fit for such purpose.  Any new or used consumer good sold with a written warranty, is also covered by the implied warranties.  If no written warranty is given for a new product, the implied warranties still apply unless "AS-IS" provisions are strictly complied with.

          With respect to leased goods, both new and used consumer goods are deemed to be covered by a written warranty, if a buyer of the same goods receives a written warranty.

          The Act provides protection for used goods, when accompanied by a written warranty from the distributor or retailer.  The obligations of such seller are identical to that of the manufacturer spelled out above, except that the duration of the implied warranties is the same duration as the written warranty, provided the duration of the written warranty is reasonable, but shall be at least 30 days, but not more than three months, following the sale to a retail buyer, and if no duration for the written warranty is stated, the duration of the implied warranties is three months.

         Still further, the Lemon Law provides the right to sue for a violation of any service contract accompanying the sale of new or used goods.  Service contracts, by the way, can be canceled by the buyer at any time before they expire, with either a full refund due within 30 to 60 days of receipt of the service contract, depending on whether the vehicle is used or new, or a prorated refund due, if a claim for repairs was made, or request for a refund is made after the 30 to 60 days. The 30 day period applies to service contracts for used vehicle sold without a manufacturer's warranty, and home appliances and home electronic products.  If the request for the refund is made after the 30 to sixty days, whichever is applicable, then a fee of no more than a $25.00 administration fee.  (Click here to see the Service Contract Cancellation and Refund Rights article on this website.)

          A civil penalty of up to two times the actual damages may be awarded for a violation of a written warranty or service contract (but not an implied warranty), if the buyer can establish that the violation was "willful".  A buyer seeking the replacement/reimbursement remedy for a new motor vehicle based upon the failure to repair after a reasonable number of attempts, need not show willfulness to receive the penalty, unless the optional qualified third party dispute resolution process is maintained by the manufacturer, the buyer fails to notify the manufacturer of demand for replacement/reimbursement after the presumption has been met, the manufacturer complies with the demand within thirty days, or the "willful" penalty provided elsewhere is imposed.

          Since at least 1995 (see, Jensen v. BMW of North America, Inc. (1995) 35 Cal.App.4th 112), a purchaser of a used motor vehicle with any unexpired manufacturer's warranty was covered under the Lemon Law, but a recent decision (Rodriquez v. FCA US, LLC (1922) , disagreed with Jensen and held that a buyer of any used car (except a demonstrator, or other previously unregistered car) was not covered at all, meaning that if you purchased a used car still covered by the manufacturer's warranty, and the manufacturer was unable to repair it, you were out of luck.  The Rodriquez decision is currently being reviewed by the California Superior Court.

          On the other hand, if you bought a used product which was accompanied by the retail seller's written warranty, you are still covered, so check your federally required "Buyer's Guide" to see if the "Warranty" box, rather than the "As-Is" box, is checked.