US Map With Lemon Image

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 Federal Lemon Law’s Disclosure Requirements

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:

  1. identify the persons covered by the warranty (e.g., just the first purchase, any subsequent owners, etc.);
  2. provide a clear description of the parts, components, and characteristics that are covered by the warranty, as well as which are excluded from coverage;
  3. state what the warrantor will do if the product is defective (e.g., service or replace the item, who will perform work, where such work will be performed, who will pay for any necessary repairs, etc.);
  4. specify when the warranty commences and when it terminates;
  5. provide step-by-step instructions describing what consumers need to do in order to obtain warranty repairs and/or product replacements; and
  6. inform consumers that they may have additional rights under state warranty laws.

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.

Minimum Warranty Standards

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.

How Does the Federal Lemon Law Compare to the California Lemon Law?

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.