Many consumers have heard of a so-called “federal lemon law,” and wonder if it can help them get a refund for their lemon automobile. In reality, the federal lemon law is the Magnuson-Moss Warranty Act (15 U.S.C. 2301 § et seq.), a federal statute that requires informational disclosures for written warranties and imposes certain minimum standards. This pages provides a brief summary of some of the most important provisions of the federal lemon law, and explains who can benefit from it.
The Magnuson-Moss Consumer Warranty Act mandates that all written warranties clearly and conspicuously disclose certain information and terms in order to help consumers better understand the benefits and obligations under their warranties. The disclosures mandated by the Magnuson-Moss Act include the requirements that warranties:
The federal lemon law also generally requires that sellers of warranted goods either display the text of the written warranty on or in close proximity to the product, or alternatively make the text of the warranty available to prospective buyers upon request.
The federal lemon law also imposes certain minimum standards for warranties. The most important of these minimum standards are the requirements that warranties may not limit coverage for consequential damages caused by product defects (unless such limit is conspicuously disclosed on the face of the warranty). Consequential damages are any damage caused by a defect. For example, if a vehicle has a defect that causes a fire destroying the vehicle, the warrantor would be liable to pay consequential damages for replacement of the tires, brakes, wipers, etc., even if these parts are not covered by the warranty.
Another important requirement is that under the federal lemon law warrantors must offer to either repurchase or replace defective goods if they are unable to repair them within a reasonable number of attempts.
In general, if you purchased a new or used automobile in California, and it qualifies for coverage under the California lemon law, then consumers would usually be better off to assert claims under the California lemon law statute. The California version of the lemon law includes certain presumptions regarding when a vehicle is a lemon, permits consumers to recover civil penalties in appropriate cases, and has other advantages that generally make it the statute of first choice for experienced California lemon law attorneys.
That being said, the federal lemon law applies to a wider category of goods than the California lemon law. Specifically, in order to qualify for coverage under the California lemon law an automobile (or any other warranted product) must be purchased for “personal, family, or household” purposes, and primarily used for such purposes. In contrast, the federal lemon law covers goods that are “normally used for personal, family, or household purposes.” In other words, if a person buys a passenger automobile and uses it exclusively for his or her business, then it may not be covered by the California lemon law; but because that type of car is normally used for personal, family, or household purposes it is covered by the federal lemon law regardless of how it is actually used.