NJ Lemon Law Summary
Covered Vehicles:
Passenger automobiles or motorcycles leased, purchased or registered in the state, except the living facilities of motor homes.
Repair Attempts or Days out of Service:
3 repair attempts or more than 20 calendar days out of service.
Coverage Period:
2 years or 18,000 miles, whichever occurs first.
New Jersey Lemon Law Statute
56:12-29 - 56:12-49
Unfair Trade Practices
56:12-29 Findings, intentions.
The Legislature finds that the purchase of a new motor vehicle is a major, high cost
consumer transaction and the inability to correct defects in these vehicles creates a
major hardship and an unacceptable economic burden on the consumer. It is the intent of
this act to require the manufacturer of a new motor vehicle to correct defects originally
covered under the manufacturer's warranty which are identified and reported within a
specified period. It is the further intent of this act to provide procedures to
expeditiously resolve disputes between a consumer and a manufacturer when defects in a new
motor vehicle are not corrected within a reasonable time, and to provide to award specific
remedies where the uncorrected defect substantially impairs the use, value, or safety of
the new motor vehicle.
56:12-30 Definitions.
As used in this act:
"Consumer" means a buyer or lessee, other than for purposes of resale or
sublease, of a motor vehicle; a person to whom a motor vehicle is transferred during the
duration of a warranty applicable to the motor vehicle; or any other person entitled by
the terms of the warranty to enforce the obligations of the warranty.
"Dealer" means a person who is actively engaged in the business of buying,
selling or exchanging motor vehicles at retail and who has an established place of
business.
"Director" means the Director of the Division of Consumer Affairs in the
Department of Law and Public Safety, or his designee.
"Division" means the Division of Consumer Affairs in the Department of Law
and Public Safety.
"Lease agreement" means a contract or other written agreement in the form
of a lease for the use of a motor vehicle by a person for a period of time exceeding 60
days, whether or not the lessee has the option to purchase or otherwise become the owner
of the motor vehicle at the expiration of the lease.
"Lessee" means a person who leases a motor vehicle pursuant to a lease
agreement.
"Lessor" means a person who holds title to a motor vehicle leased to a
lessee under a lease agreement or who holds the lessor's rights under such an agreement.
"Lien" means a security interest in a motor vehicle.
"lien holder" means a person with a security interest in a motor vehicle
pursuant to a lien.
"Manufacturer" means a person engaged in the business of manufacturing,
assembling or distributing motor vehicles, who will, under normal business conditions
during the year, manufacture, assemble or distribute to dealers at least 10 new motor
vehicles.
"Manufacturer's informal dispute settlement procedure" means an arbitration
process or procedure by which the manufacturer attempts to resolve disputes with
consumers regarding motor vehicle nonconformities and repairs that arise during the
vehicle's warranty period.
"Manufacturer's warranty" or "warranty" means any warranty,
whether express or implied of the manufacturer, of a new motor vehicle of its condition
and fitness for use, including any terms or conditions precedent to the enforcement of
obligations under the warranty.
"Motor vehicle" means a passenger automobile or motorcycle as defined in
R.S.39:1-1 which is purchased or leased in the State of New Jersey or which is
registered by the Division of Motor Vehicles in the Department of Law and Public Safety,
except the living facilities of motor homes.
"Nonconformity" means a defect or condition which substantially impairs the
use, value or safety of a motor vehicle.
"Reasonable allowance for vehicle use" means the mileage at the time the
consumer first presents the motor vehicle to the dealer or manufacturer for correction
of a nonconformity times the purchase price, or the lease price if applicable, of the
vehicle, divided by one hundred thousand miles.
56:12-31 Report of nonconformity; repairs.
If a consumer reports a nonconformity in a motor vehicle to the manufacturer or its
dealer during the first 18,000 miles of operation or during the period of two years
following the date of original delivery to a consumer, whichever is earlier, the
manufacturer shall make, or arrange with its dealer to make, within a reasonable time, all
repairs necessary to correct the nonconformity. Such repairs if made after the first
12,000 miles of operation or after the period of one year following the date of original
delivery to the consumer, whichever is earlier, shall be paid for by the consumer, unless
otherwise covered by a manufacturer's warranty, and shall be recoverable as a cost under
section 14 of this act.
56:12-32 Refunds.
a. If, during the period specified in section 3 of this act, the manufacturer
or its dealer is unable to repair or correct a nonconformity within a reasonable time,
the manufacturer shall accept return of the motor vehicle from the consumer. The
manufacturer shall provide the consumer with a full refund of the purchase price of the
original motor vehicle including any stated credit or allowance for the consumer's used
motor vehicle, the cost of any options or other modifications arranged, installed, or
made by the manufacturer or its dealer within 30 days after the date of original
delivery, and any other charges or fees including, but not limited to, sales tax,
license and registration fees, finance charges, reimbursement for towing and
reimbursement for actual expenses incurred by the consumer for the rental of a motor
vehicle equivalent to the consumer's motor vehicle and limited to the period during
which the consumer's motor vehicle was out of service due to a nonconformity, less a
reasonable allowance for vehicle use. Nothing herein shall be construed to preclude a
manufacturer from making an offer to replace the vehicle in lieu of a refund; except
that the consumer may, in any case, reject a manufacturer's offer of replacement and
demand a refund. Refunds shall be made to the consumer and lien holder, if any, as their
interests appear on the records of ownership maintained by the Director of the Division
of Motor Vehicles. In the event that the consumer accepts an offer to replace the motor
vehicle in lieu of a refund, it shall be the manufacturer's responsibility to insure
that any lien on the returned motor vehicle is transferred to the replacement vehicle.
b. A consumer who leases a new motor vehicle shall have the same remedies
against a manufacturer under this section as a consumer who purchases a new motor
vehicle. If it is determined that the lessee is entitled to a refund pursuant to
subsection a. of this section, the consumer shall return the leased vehicle to the
lessor or manufacturer and the consumer's lease agreement with the motor vehicle lessor
shall be terminated and no penalty for early termination shall be assessed. The
manufacturer shall provide the consumer with a full refund of the amount actually paid
by the consumer under the lease agreement, including any additional charges as set forth
in subsection a. of this section if actually paid by the consumer, less a reasonable
allowance for vehicle use. The manufacturer shall provide the motor vehicle lessor with
a full refund of the vehicle's original purchase price plus any un-recovered interest
expense, less the amount actually paid by the consumer under the agreement. Refunds
shall be made to the lessor and lien holder, if any, as their interests appear on the
records of ownership maintained by the Director of the Division of Motor Vehicles.
56:12-33 Presumption of inability to correct nonconformity; written notification.
a. It is presumed that a manufacturer or its dealer is unable to repair or
correct a nonconformity within a reasonable time if, within the first 18,000 miles of
operation or during the period of two years following the date of original delivery of
the motor vehicle to a consumer, whichever is the earlier date:
(1) Substantially the same nonconformity has been subject to repair three or
more times by the manufacturer or its dealer and the nonconformity continues to exist;
or
(2) The motor vehicle is out of service by reason of repair for one or more
nonconformities for a cumulative total of 20 or more calendar days since the original
delivery of the motor vehicle and a nonconformity continues to exist.
b. The presumption contained in subsection a. of this section shall apply
against a manufacturer only if the manufacturer has received written notification, by or
on behalf of the consumer, by certified mail return receipt requested, of a potential
claim pursuant to the provisions of this act and has had one opportunity to repair or
correct the defect or condition within 10 calendar days following receipt of the
notification. Notification by the consumer shall take place any time after the motor
vehicle has had substantially the same nonconformity subject to repair two or more times
or has been out of service by reason of repair for a cumulative total of 20 or more
calendar days.
c. The two-year term and the 20-day period specified in this section shall be
extended by any period of time during which repair services are not available to the
consumer because of a war, invasion or strike, or a fire, flood, or other natural
disaster.
56:12-34 Statements to consumers.
a. At the time of purchase in the State of New Jersey, the manufacturer
through its dealer, or at the time of lease in the State of New Jersey, the lessor,
shall provide directly to the consumer the following written statement on a separate
piece of paper, in 10-point bold-face type:
"IMPORTANT: IF THIS VEHICLE IS DEFECTIVE, YOU MAY BE ENTITLED UNDER NEW JERSEY
LAW TO A REFUND OF THE PURCHASE PRICE OR YOUR LEASE PAYMENTS. FOR COMPLETE INFORMATION
REGARDING YOUR RIGHTS AND REMEDIES UNDER THE RELEVANT LAW, CONTACT THE NEW JERSEY
DEPARTMENT OF LAW AND PUBLIC SAFETY, DIVISION OF CONSUMER AFFAIRS."
b. Each time a consumer's motor vehicle is returned from being examined or
repaired during the period specified in section 3 of this act, the manufacturer through
its dealer shall provide to the consumer an itemized, legible statement of repair which
indicates any diagnosis made and all work performed on the vehicle and provides
information including, but not limited to, the following: a general description of the
problem reported by the consumer or an identification of the problem reported by the
consumer or an identification of the defect or condition; the amount charged for parts
and the amount charged for labor, if paid for by the consumer; the date and the odometer
reading when the vehicle was submitted for repair; and the date and odometer reading
when the vehicle was made available to the consumer.
c. Failure to comply with the provisions of this section constitutes an
unlawful practice pursuant to section 2 of P.L. 1960, c. 39 (C. 56:8-2).
56:12-35 Sale, leasing of returned motor vehicle.
a. If a motor vehicle is returned to the manufacturer under the provisions of
this act or a similar statute of another state or as the result of a legal action or an
informal dispute settlement procedure, it shall not be resold or re-leased in New Jersey
unless:
(1) The manufacturer provides to the dealer or lessor and the dealer or
lessor provides to the consumer the following written statement on a separate piece of
paper, in 10-point bold-face type:
"IMPORTANT: THIS VEHICLE WAS RETURNED TO THE MANUFACTURER BECAUSE IT DID NOT
CONFORM TO THE MANUFACTURER'S WARRANTY AND THE NONCONFORMITY WAS NOT CORRECTED
WITHIN A REASONABLE TIME AS PROVIDED BY LAW;"
(2) The dealer or lessor obtains from the consumer a signed receipt
certifying, in a conspicuous and understandable manner, that the written statement
required under this subsection has been provided. The director shall prescribe the
form of the receipt. The dealer or lessor may fulfill his obligation to obtain a
signed receipt under this paragraph by making such a notation, in a conspicuous and
understandable manner, on the vehicle buyer order form accompanying the sale or lease
of that vehicle; and
(3) The dealer or lessor, in accordance with the provisions of section 1 of
P.L.1993, c.21 (C.39:10-9.3), notifies the Director of the Division of Motor Vehicles
in the Department of Law and Public Safety of the sale or transfer of ownership of the
motor vehicle.
b. Nothing in this section shall be construed as imposing an obligation on a
dealer or lessor to determine whether a manufacturer is in compliance with the terms of
this section nor shall it be construed as imposing liability on a dealer or lessor for
the failure of a manufacturer to comply with the terms of this section.
c. Failure to comply with the provisions of this section constitutes an
unlawful practice pursuant to section 2 of P.L.1960, c.39 (C.56:8-2).
56:12-36 Informal dispute settlement procedure.
a. If a manufacturer has established, or participates in, an informal dispute
settlement procedure pursuant to section 110 of Pub. L. 93-637 (15 U.S.C. s.2310) and
the rules promulgated there under, or the requirements of this section, a consumer may
submit a dispute regarding motor vehicle nonconformities to the dispute settlement body
provided by that procedure but a consumer shall not be required to first participate in
the informal dispute settlement procedure before participating in the division's summary
hearing procedure under this act.
b. If a consumer chooses to use a manufacturer's informal dispute settlement
procedure established pursuant to this section, the findings and decisions of the
dispute settlement body shall state in writing whether the consumer is entitled to a
refund under the presumptions and criteria set out in this act and the findings and
decisions shall be admissible against the consumer and the manufacturer in any legal
action.
c. If the dispute settlement body determines that a consumer is entitled to
relief under this act, the consumer shall be entitled to a refund as authorized by
section 4 of this act.
d. In any informal dispute settlement procedure established pursuant to this
section:
(1) Participating arbitrators shall be trained in arbitration and familiar
with the provisions of this act.
(2) Documents shall not be submitted to any dispute settlement body unless
the documents have been provided to each of the parties in the dispute at least seven
days prior to commencement of the dispute settlement hearing. The parties shall be
given the opportunity to comment on the documents in writing or with oral
presentation.
(3) No party shall participate in the informal dispute settlement procedure
unless all other parties are also present and given an opportunity to be heard, or
unless the other parties consent to proceeding without their presence and
participation.
(4) A consumer shall be given an adequate opportunity to contest a
manufacturer's assertion that a nonconformity falls within intended specifications for
the vehicle by having the basis of the manufacturer's claim appraised by a technical
expert selected and paid for by the consumer prior to the manufacturer's informal
dispute settlement procedure. If the dispute settlement body rules in favor of the
consumer, his costs and reasonable attorney's fees shall also be awarded.
(5) A dispute shall not be heard if there has been a recent attempt by the
manufacturer to repair a consumer's vehicle, but no response has yet been received by
the dispute settlement body from the consumer as to whether the repairs were
successfully completed. This provision shall not prejudice a consumer's right under
this section.
The manufacturer shall provide, and the dispute settlement body shall consider, any
relevant technical service bulletins which have been issued by the manufacturer
regarding motor vehicles of the same make and model as the vehicle that is the subject
of the dispute.
e. Any manufacturer who establishes, or participates in, an informal dispute
settlement procedure, whether it meets the requirements of this section or not, shall
maintain, and forward to the director at six month intervals, the following records:
(1) The number of purchase price and lease price refunds requested, the
number awarded by the dispute settlement body, the amount of each award and the number
of awards satisfied in a timely manner;
(2) The number of awards in which additional repairs or a warranty extension
was the most prominent remedy, the amount or value of each award, and the number of
awards satisfied in a timely manner;
(3) The number and total dollar amount of awards in which some form of
reimbursement for expenses or compensation for losses was the most prominent remedy,
the amount or value of each award and the number of awards satisfied in a timely
manner; and
(4) The average number of days from the date of a consumer's initial request
to use the manufacturer's informal dispute settlement procedure until the date of the
decision and the average number of days from the date of the decision to the date on
which performance of the award was satisfied.
56:12-37 Dispute resolution.
a. A consumer shall have the option of submitting any dispute arising under
section 4 of this act to the division for resolution. The director may establish a
filing fee, to be paid by the consumer, fixed at a level not to exceed the cost for the
proper administration and enforcement of this act. This fee shall be recoverable as a
cost under section 14 of this act. Upon application by the consumer and payment of any
filing fee, the manufacturer shall submit to the State hearing procedure. The filing of
the notice in subsection b. of section 5 of P.L.1988, c.123 (C.56:12-33) shall be a
prerequisite to the filing of an application under this section.
b. The director shall review a consumer's application for dispute resolution
and accept eligible disputes for referral to the Office of Administrative Law for a
summary hearing to be conducted in accordance with special rules adopted pursuant to the
"Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), by the
Office of Administrative Law in consultation with the director. Immediately upon
acceptance of a consumer's application for dispute resolution, the director shall
contact the parties and arrange for a hearing date with the Clerk of the Office of
Administrative Law. The hearing date shall, to the greatest extent possible, be
convenient to all parties, but shall be no later than 20 days from the date the
consumer's application is accepted, unless a later date is agreed upon by the consumer.
The Office of Administrative Law shall render a decision, in writing, to the director
within 20 days of the conclusion of the summary hearing. The decision shall provide a
brief summary of the findings of fact, appropriate remedies pursuant to this act, and a
specific date for completion of all awarded remedies. The director, upon a review of the
proposed decision submitted by the administrative law judge, shall adopt, reject, or
modify the decision no later than 15 days after receipt of the decision. Unless the
director modifies or rejects the decision within the 15-day period, the decision of the
administrative law judge shall be deemed adopted as the final decision of the director.
If the manufacturer unreasonably fails to comply with the decision within the specified
time period, the manufacturer shall be liable for penalties in the amount of $5,000.00
for each day the manufacturer unreasonably fails to comply, commencing on the day after
the specified date for completion of all awarded remedies.
c. The Office of Administrative Law is authorized to issue subpoenas to compel
the attendance of witnesses and the production of documents, papers and records relevant
to the dispute.
d. A manufacturer or consumer may appeal a final decision to the Appellate
Division of the Superior Court. An appeal by a manufacturer shall not be heard unless
the petition for the appeal is accompanied by a bond in a principal sum equal to the
money award made by the administrative law judge plus $2,500.00 for anticipated
attorney's fees and other costs, secured by cash or its equivalent, payable to the
consumer. The liability of the surety of any bond filed pursuant to this section shall
be limited to the indemnification of the consumer in the action. The bond shall not
limit or impair any right of recovery otherwise available pursuant to law, nor shall the
amount of the bond be relevant in determining the amount of recovery to which the
consumer shall be entitled. If a final decision resulting in a refund to the consumer is
upheld by the court, recovery by the consumer shall include reimbursement for actual
expenses incurred by the consumer for the rental of a motor vehicle equivalent to the
consumer's motor vehicle and limited to the period of time after which the consumer's
motor vehicle was offered to the manufacturer for return under this act, except in those
cases in which the manufacturer made a comparable vehicle available to the consumer free
of charge during that period. If the court finds that the manufacturer had no reasonable
basis for its appeal or that the appeal was frivolous, the court shall award treble
damages to the consumer. Failure of the Office of Administrative Law to render a written
decision within 20 days of the conclusion of the summary hearing as required by
subsection b. of this section shall not be a basis for appeal.
e. The Attorney General shall monitor the implementation and effectiveness of
this act and report to the Legislature after three years of operation, at which time a
recommendation shall be made either to continue under the procedures set forth in this
act or to make such modifications as may be necessary to effectuate the purposes of this
act.
56:12-38 Statistics.
a. The Division of Consumer Affairs shall maintain an index of all motor
vehicle disputes by make and model. The division shall, at six-month intervals, compile
and maintain statistics indicating the record of manufacturer compliance with any
settlement procedure decisions. The statistics shall be public record.
b. A manufacturer shall provide to the division all information on private
arbitration or private buy-back programs maintained or instituted by the manufacturer.
The information shall include the type and number of vehicles to which these programs
apply and the reasons for establishing and maintaining the programs. The manufacturer
shall provide the division with updated information at six month intervals.
56:12-39 Decision binding.
A consumer shall not be required to participate in a manufacturer's informal dispute
settlement procedure or the division's summary hearing procedure before filing an action
in the Superior Court. However, a decision rendered in a proceeding brought pursuant to
the division's summary hearing procedure shall be binding on the consumer and the
manufacturer, subject to the right of appeal as set forth in subsection d. of section 9 of
this act, and shall preclude the institution of any other action in the Superior Court
under this act.
56:12-40 Affirmative defense.
It shall be an affirmative defense to a claim under this act that the alleged
nonconformity does not substantially impair the use, value, or safety of the new motor
vehicle or that the nonconformity is the result of abuse, neglect, or unauthorized
modifications or alterations of the motor vehicle by anyone other than the manufacturer or
its dealer.
56:12-41 Pleading.
Any party to an action in the Superior Court of this State asserting a claim,
counterclaim or defense based upon violations of this act shall mail a copy of the initial
or responsive pleading containing the claim, counterclaim or defense to the Attorney
General within 10 days after filing the pleading with the court. Upon application to the
court in which the matter is pending, the Attorney General may intervene or appear in any
status appropriate to this matter.
56:12-42 Attorney, expert fees; costs.
In any action by a consumer against a manufacturer brought in Superior Court or in the
division pursuant to the provisions of this act, a prevailing consumer shall be awarded
reasonable attorney's fees, fees for expert witnesses and costs.
56:12-43 Use of funds.
All fees, penalties and costs collected by the division pursuant to this act shall be
appropriated for purposes of offsetting costs associated with the handling and resolution
of consumer automotive complaints.
56:12-44 Inherent design defect.
A manufacturer shall certify to the division, within one year of discovery, the
existence of any inherent design defect common to all motor vehicles of a particular model
or make. Failure to comply with this constitutes an unlawful practice pursuant to section
2 of P.L. 1960, c. 39 (C. 56:8-2).
56:12-45 Proceedings.
The director may institute proceedings against any manufacturer who fails to comply
with any of the provisions of this act.
56:12-46 No liability, cause of action.
Nothing in this act shall be construed as imposing any liability on a dealer, or
creating a cause of action by a manufacturer against a dealer, and nothing shall be
construed as imposing any liability on a dealer, or creating a cause of action by a
consumer against a dealer under section 4 of this act.
56:12-47 No limitation on rights.
Nothing in this act shall in any way limit the rights or remedies which are otherwise
available to a consumer under any other law.
56:12-48 Agreements void.
Any agreement entered into by a consumer for the purchase or lease of a new motor
vehicle which waives, limits or disclaims the rights set forth in this act shall be void
as contrary to public policy.
56:12-49 Rules, regulations.
Within 120 days following enactment, the director shall, subject to approval by the
Attorney General and pursuant to the provisions of the "Administrative Procedure
Act," P.L. 1968, c. 410 (C. 52:14B-1 et seq.), adopt rules and regulations necessary
to effectuate the purposes of this act.
Magnuson-Moss Warranty Act - Federal Lemon Law
US Code - Title 15, Chapter 50, Sections 2301-2312
Section 2301. Definitions For the purposes of this chapter
(1) The term "consumer product" means any tangible personal property which is distributed in commerce and which is normally used for personal, family, or household purposes (including any such property intended to be attached to or installed in any real property without regard to whether it is so attached or installed).
(2) The term "Commission" means the Federal Trade Commission.
(3) The term "consumer" means a buyer (other than for purposes of resale) of any consumer product, any person to whom such product is transferred during the duration of an implied or written warranty (or service contract) applicable to the product, and any other person who is entitled by the terms of such warranty (or service contract) or under applicable State law to enforce against the warrantor (or service contractor) the obligations of the warranty (or service contract).
(4) The term "supplier" means any person engaged in the business of making a consumer product directly or indirectly available to consumers.
(5) The term "warrantor" means any supplier or other person who gives or offers to give a written warranty or who is or may be obligated under an implied warranty.
(6) The term "written warranty" means -
(A) any written affirmation of fact or written promise made in connection with the sale of a consumer product by a supplier to a buyer which relates to the nature of the material or workmanship and affirms or promises that such material or workmanship is defect free or will meet a specified level of performance over a specified period of time, or
(B) any undertaking in writing in connection with the sale by a supplier of a consumer product to refund, repair, replace, or take other remedial action with respect to such product in the event that such product fails to meet the specifications set forth in the undertaking, which written affirmation, promise, or undertaking becomes part of the basis of the bargain between a supplier and a buyer for purposes other than resale of such product.
(7) The term "implied warranty" means an implied warranty arising under State law (as modified by sections 2308 and 2304(a) of this title) in connection with the sale by a supplier of a consumer product.
(8) The term "service contract" means a contract in writing to perform, over a fixed period of time or for a specified duration, services relating to the maintenance or repair (or both) of a consumer product.
(9) The term "reasonable and necessary maintenance" consists of those operations
(A) which the consumer reasonably can be expected to perform or have performed and
(B) which are necessary to keep any consumer product performing its intended function and operating at a reasonable level of performance.
(10) The term "remedy" means whichever of the following actions the warrantor elects:
(A) repair,
(B) replacement, or
(C) refund;
except that the warrantor may not elect refund unless (i) the warrantor is unable to provide replacement and repair is not commercially practicable or cannot be timely made, or (ii) the consumer is willing to accept such refund.
(11) The term ''replacement'' means furnishing a new consumer product which is identical or reasonably equivalent to the warranted consumer product.
(12) The term "refund" means refunding the actual purchase price (less reasonable depreciation based on actual use where permitted by rules of the Commission).
(13) The term "distributed in commerce" means sold in commerce, introduced or delivered for introduction into commerce, or held for sale or distribution after introduction into commerce.
(14) The term "commerce" means trade, traffic, commerce, or transportation -
(A) between a place in a State and any place outside thereof,
or
(B) which affects trade, traffic, commerce, or transportation described in subparagraph (A).
(15) The term "State" means a State, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, the Canal Zone, or American Samoa. The term "State law" includes a law of the United States applicable only to the District of Columbia or only to a territory or possession of the United States; and the term "Federal law'" excludes any State law.
Section 2302. Rules governing contents of warranties
(a) Full and conspicuous disclosure of terms and conditions; additional requirements for contents In order to improve the adequacy of information available to consumers, prevent deception, and improve competition in the marketing of consumer products, any warrantor warranting a consumer product to a consumer by means of a written warranty shall, to the extent required by rules of the Commission, fully and conspicuously disclose in simple and readily understood language the terms and conditions of such warranty. Such rules may require inclusion in the written warranty of any of the following items among others:
(1) The clear identification of the names and addresses of the warrantors.
(2) The identity of the party or parties to whom the warranty is extended.
(3) The products or parts covered.
(4) A statement of what the warrantor will do in the event of a defect, malfunction, or failure to conform with such written warranty - at whose expense - and for what period of time.
(5) A statement of what the consumer must do and expenses he must bear.
(6) Exceptions and exclusions from the terms of the warranty.
(7) The step-by-step procedure which the consumer should take in order to obtain performance of any obligation under the warranty, including the identification of any person or class of persons authorized to perform the obligations set forth in the warranty.
(8) Information respecting the availability of any informal dispute settlement procedure offered by the warrantor and a recital, where the warranty so provides, that the purchaser may be required to resort to such procedure before pursuing any legal remedies in the courts.
(9) A brief, general description of the legal remedies available to the consumer.
(10) The time at which the warrantor will perform any obligations under the warranty.
(11) The period of time within which, after notice of a defect, malfunction, or failure to conform with the warranty, the warrantor will perform any obligations under the warranty.
(12) The characteristics or properties of the products, or parts thereof, that are not covered by the warranty.
(13) The elements of the warranty in words or phrases which would not mislead a reasonable, average consumer as to the nature or scope of the warranty.
(b) Availability of terms to consumer; manner and form for presentation and display of information; duration; extension of period for written warranty or service contract
(1)
(A) The Commission shall prescribe rules requiring that the terms of any written warranty on a consumer product be made available to the consumer (or prospective consumer) prior to the sale of the product to him.
(B) The Commission may prescribe rules for determining the manner and form in which information with respect to any written warranty of a consumer product shall be clearly and conspicuously presented or displayed so as not to mislead the reasonable, average consumer, when such information is contained in advertising, labeling, point-of-sale material, or other representations in writing.
(2) Nothing in this chapter (other than paragraph (3) of this subsection) shall be deemed to authorize the Commission to prescribe the duration of written warranties given or to require that a consumer product or any of its components be warranted.
(3) The Commission may prescribe rules for extending the period of time a written warranty or service contract is in effect to correspond with any period of time in excess of a reasonable period (not less than 10 days) during which the consumer is deprived of the use of such consumer product by reason of failure of the product to conform with the written warranty or by reason of the failure of the warrantor (or service contractor) to carry out such warranty (or service contract) within the period specified in the warranty (or service contract).
(c) Prohibition on conditions for written or implied warranty; waiver by Commission No warrantor of a consumer product may condition his written or implied warranty of such product on the consumer's using, in connection with such product, any article or service (other than article or service provided without charge under the terms of the warranty) which is identified by brand, trade, or corporate name; except that the prohibition of this subsection may be waived by the Commission if -
(1) the warrantor satisfies the Commission that the warranted product will function properly only if the article or service so identified is used in connection with the warranted product, and
(2) the Commission finds that such a waiver is in the public interest. The Commission shall identify in the Federal Register, and permit public comment on, all applications for waiver of the prohibition of this subsection, and shall publish in the Federal Register its disposition of any such application, including the reasons therefor.
(d) Incorporation by reference of detailed substantive warranty provisions
The Commission may by rule devise detailed substantive warranty provisions which warrantors may incorporate by reference in their warranties.
(e) Applicability to consumer products costing more than $5
The provisions of this section apply only to warranties which pertain to consumer products actually costing the consumer more than $5.
Section 2303. Designation of written warranties
(a) Full (statement of duration) or limited warranty
Any warrantor warranting a consumer product by means of a written warranty shall clearly and conspicuously designate such warranty in the following manner, unless exempted from doing so by the Commission pursuant to subsection (c) of this section:
(1) If the written warranty meets the Federal minimum standards for warranty set forth in section 2304 of this title, then it shall be conspicuously designated a ''full (statement of duration) warranty''.
(2) If the written warranty does not meet the Federal minimum standards for warranty set forth in section 2304 of this title, then it shall be conspicuously designated a "limited warranty".
(b) Applicability of requirements, standards, etc., to representations or statements of customer satisfaction
This section and sections 2302 and 2304 of this title shall not apply to statements or representations which are similar to expressions of general policy concerning customer satisfaction and which are not subject to any specific limitations.
(c) Exemptions by Commission
In addition to exercising the authority pertaining to disclosure granted in section 2302 of this title, the Commission may by rule determine when a written warranty does not have to be designated either ''full (statement of duration)'' or ''limited'' in accordance with this section.
(d) Applicability to consumer products costing more than $10 and not designated as full warranties
The provisions of subsections (a) and (c) of this section apply only to warranties which pertain to consumer products actually costing the consumer more than $10 and which are not designated "full (statement of duration) warranties".
Section 2304. Federal minimum standards for warranties
(a) Remedies under written warranty; duration of implied warranty; exclusion or limitation on consequential damages for breach of written or implied warranty; election of refund or replacement. In order for a warrantor warranting a consumer product by means of a written warranty to meet the Federal minimum standards for warranty -
(1) such warrantor must as a minimum remedy such consumer product within a reasonable time and without charge, in the case of a defect, malfunction, or failure to conform with such written warranty;
(2) notwithstanding section 2308(b) of this title, such warrantor may not impose any limitation on the duration of any implied warranty on the product;
(3) such warrantor may not exclude or limit consequential damages for breach of any written or implied warranty on such product, unless such exclusion or limitation conspicuously appears on the face of the warranty; and
(4) if the product (or a component part thereof) contains a defect or malfunction after a reasonable number of attempts by the warrantor to remedy defects or malfunctions in such product, such warrantor must permit the consumer to elect either a refund for, or replacement without charge of, such product or part (as the case may be). The Commission may by rule specify for purposes of this paragraph, what constitutes a reasonable number of attempts to remedy particular kinds of defects or malfunctions under different circumstances. If the warrantor replaces a component part of a consumer product, such replacement shall include installing the part in the product without charge.
(b) Duties and conditions imposed on consumer by warrantor
(1) In fulfilling the duties under subsection (a) of this section respecting a written warranty, the warrantor shall not impose any duty other than notification upon any consumer as a condition of securing remedy of any consumer product which malfunctions, is defective, or does not conform to the written warranty, unless the warrantor has demonstrated in a rulemaking proceeding, or can demonstrate in an administrative or judicial enforcement proceeding (including private enforcement), or in an informal dispute settlement proceeding, that such a duty is reasonable.
(2) Notwithstanding paragraph (1), a warrantor may require, as a condition to replacement of, or refund for, any consumer product under subsection (a) of this section, that such consumer product shall be made available to the warrantor free and clear of liens and other encumbrances, except as otherwise provided by rule or order of the Commission in cases in which such a requirement would not be practicable.
(3) The Commission may, by rule define in detail the duties set forth in subsection (a) of this section and the applicability of such duties to warrantors of different categories of consumer products with ''full (statement of duration)'' warranties.
(4) The duties under subsection (a) of this section extend from the warrantor to each person who is a consumer with respect to the consumer product.
(c) Waiver of standards
The performance of the duties under subsection (a) of this section shall not be required of the warrantor if he can show that the defect, malfunction, or failure of any warranted consumer product to conform with a written warranty, was caused by damage (not resulting from defect or malfunction) while in the possession of the consumer, or unreasonable use (including failure to provide reasonable and necessary maintenance).
(d) Remedy without charge
For purposes of this section and of section 2302(c) of this title, the term ''without charge'' means that the warrantor may not assess the consumer for any costs the warrantor or his representatives incur in connection with the required remedy of a warranted consumer product. An obligation under subsection (a)(1)(A) of this section to remedy without charge does not necessarily require the warrantor to compensate the consumer for incidental expenses; however, if any incidental expenses are incurred because the remedy is not made within a reasonable time or because the warrantor imposed an unreasonable duty upon the consumer as a condition of securing remedy, then the consumer shall be entitled to recover reasonable incidental expenses which are so incurred in any action against the warrantor.
(e) Incorporation of standards to products designated with full warranty for purposes of judicial actions
If a supplier designates a warranty applicable to a consumer product as a ''full (statement of duration)'' warranty, then the warranty on such product shall, for purposes of any action under section 2310(d) of this title or under any State law, be deemed to incorporate at least the minimum requirements of this section and rules prescribed under this section.
Section 2305. Full and limited warranting of a consumer product
Nothing in this chapter shall prohibit the selling of a consumer product which has both full and limited warranties if such warranties are clearly and conspicuously differentiated.
Section 2306. Service contracts; rules for full, clear and conspicuous disclosure of terms and conditions; addition to or in lieu of written warranty
(a) The Commission may prescribe by rule the manner and form in which the terms and conditions of service contracts shall be fully, clearly, and conspicuously disclosed.
(b) Nothing in this chapter shall be construed to prevent a supplier or warrantor from entering into a service contract with the consumer in addition to or in lieu of a written warranty if such contract fully, clearly, and conspicuously discloses its terms and conditions in simple and readily understood language.
Section 2307. Designation of representatives by warrantor to perform duties under written or implied warranty
Nothing in this chapter shall be construed to prevent any warrantor from designating representatives to perform duties under the written or implied warranty: Provided, That such warrantor shall make reasonable arrangements for compensation of such designated representatives, but no such designation shall relieve the warrantor of his direct responsibilities to the consumer or make the representative a co-warrantor.
Section 2308. Implied warranties
(a) Restrictions on disclaimers or modifications
No supplier may disclaim or modify (except as provided in subsection (b) of this section) any implied warranty to a consumer with respect to such consumer product if
(1) such supplier makes any written warranty to the consumer with respect to such consumer Product, or
(2) at the time of sale, or within 90 days thereafter, such supplier enters into a service contract with the consumer which applies to such consumer product.
(b) Limitation on duration
For purposes of this chapter (other than section 2304(a)(2) of this title), implied warranties may be limited in duration to the duration of a written warranty of reasonable duration, if such limitation is conscionable and is set forth in clear and unmistakable language and prominently displayed on the face of the warranty.
(c) Effectiveness of disclaimers, modifications, or limitations
A disclaimer, modification, or limitation made in violation of this section shall be ineffective for purposes of this chapter and State law.
Section 2309. Procedures applicable to promulgation of rules by Commission
(a) Oral presentation
Any rule prescribed under this chapter shall be prescribed in accordance with section 553 of title 5; except that the Commission shall give interested persons an opportunity for oral presentations of data, views, and arguments, in addition to written submissions. A transcript shall be kept of any oral presentation. Any such rule shall be subject to judicial review under section 57a(e) of this title in the same manner as rules prescribed under section 57a(a)(1)(B) of this title, except that section 57a(e)(3)(B) of this title shall not apply.
(b) Warranties and warranty practices involved in sale of used motor vehicles
The Commission shall initiate within one year after January 4, 1975, a rulemaking proceeding dealing with warranties and warranty practices in connection with the sale of used motor vehicles; and, to the extent necessary to supplement the protections offered the consumer by this chapter, shall prescribe rules dealing with such warranties and practices. In prescribing rules under this subsection, the Commission may exercise any authority it may have under this chapter, or other law, and in addition it may require disclosure that a used motor vehicle is sold without any warranty and specify the form and content of such disclosure.
Section 2310. Remedies in consumer disputes
(a) Informal dispute settlement procedures; establishment; rules setting forth minimum requirements; effect of compliance by warrantor; review of informal procedures or implementation by Commission; application to existing informal procedures
(1) Congress hereby declares it to be its policy to encourage warrantors to establish procedures whereby consumer disputes are fairly and expeditiously settled through informal dispute settlement mechanisms.
(2) The Commission shall prescribe rules setting forth minimum requirements for any informal dispute settlement procedure which is incorporated into the terms of a written warranty to which any provision of this chapter applies. Such rules shall provide for participation in such procedure by independent or governmental entities.
(3) One or more warrantors may establish an informal dispute settlement procedure which meets the requirements of the Commission's rules under paragraph (2). If -
(A) a warrantor establishes such a procedure,
(B) such procedure, and its implementation, meets the requirements of such rules, and
(C) he incorporates in a written warranty a requirement that the consumer resort to such procedure before pursuing any legal remedy under this section respecting such warranty, then
(i) the consumer may not commence a civil action (other than a class action) under subsection (d) of this section unless he initially resorts to such procedure; and
(ii) a class of consumers may not proceed in a class action under subsection (d) of this section except to the extent the court determines necessary to establish the representative capacity of the named plaintiffs, unless the named plaintiffs (upon notifying the defendant that they are named plaintiffs in a class action with respect to a warranty obligation) initially resort to such procedure. In the case of such a class action which is brought in a district court of the United States, the representative capacity of the named plaintiffs shall be established in the application of rule 23 of the Federal Rules of Civil Procedure. In any civil action arising out of a warranty obligation and relating to a matter considered in such a procedure, any decision in such procedure shall be admissible in evidence.
(4) The Commission on its own initiative may, or upon written complaint filed by any interested person shall, review the bona fide operation of any dispute settlement procedure resort to which is stated in a written warranty to be a prerequisite to pursuing a legal remedy under this section. If the Commission finds that such procedure or its implementation fails to comply with the requirements of the rules under paragraph (2), the Commission may take appropriate remedial action under any authority it may have under this chapter or any other provision of law.
(5) Until rules under paragraph (2) take effect, this subsection shall not affect the validity of any informal dispute settlement procedure respecting consumer warranties, but in any action under subsection (d) of this section, the court may invalidate any such procedure if it finds that such procedure is unfair.
(b) Prohibited acts It shall be a violation of section 45(a)(1) of this title for any person to fail to comply with any requirement imposed on such person by this chapter (or a rule thereunder) or to violate any prohibition contained in this chapter (or a rule thereunder).
(c) Injunction proceedings by Attorney General or Commission for deceptive warranty, noncompliance with requirements, or violating prohibitions; procedures; definitions
(1) The district courts of the United States shall have jurisdiction of any action brought by the Attorney General (in his capacity as such), or by the Commission by any of its attorneys designated by it for such purpose, to restrain
(A) any warrantor from making a deceptive warranty with respect to a consumer product, or
(B) any person from failing to comply with any requirement imposed on such person by or pursuant to this chapter or from violating any prohibition contained in this chapter. Upon proper showing that, weighing the equities and considering the Commission's or Attorney General's likelihood of ultimate success, such action would be in the public interest and after notice to the defendant, a temporary restraining order or preliminary injunction may be granted without bond. In the case of an action brought by the Commission, if a complaint under section 45 of this title is not filed within such period (not exceeding 10 days) as may be specified by the court after the issuance of the temporary restraining order or preliminary injunction, the order or injunction shall be dissolved by the court and be of no further force and effect. Any suit shall be brought in the district in which such person resides or transacts business. Whenever it appears to the court that the ends of justice require that other persons should be parties in the action, the court may cause them to be summoned whether or not they reside in the district in which the court is held, and to that end process may be served in any district.
(2) For the purposes of this subsection, the term ''deceptive warranty'' means
(A) a written warranty which (i) contains an affirmation, promise, description, or representation which is either false or fraudulent, or which, in light of all of the circumstances, would mislead a reasonable individual exercising due care; or (ii) fails to contain information which is necessary in light of all of the circumstances, to make the warranty not misleading to a reasonable individual exercising due care; or
(B) a written warranty created by the use of such terms as ''guaranty'' or ''warranty'', if the terms and conditions of such warranty so limit its scope and application as to deceive a reasonable individual.
(d) Civil action by consumer for damages, etc.; jurisdiction; recovery of costs and expenses; cognizable claims
(1) Subject to subsections (a)(3) and (e) of this section, a consumer who is damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation under this chapter, or under a written warranty, implied warranty, or service contract, may bring suit for damages and other legal and equitable relief -
(A) in any court of competent jurisdiction in any State or the District of Columbia; or
(B) in an appropriate district court of the United States, subject to paragraph (3) of this subsection.
(2) If a consumer finally prevails in any action brought under paragraph (1) of this subsection, he may be allowed by the court to recover as part of the judgment a sum equal to the aggregate amount of cost and expenses (including attorneys' fees based on actual time expended) determined by the court to have been reasonably incurred by the plaintiff for or in connection with the commencement and prosecution of such action, unless the court in its discretion shall determine that such an award of attorneys' fees would be inappropriate. (3) No claim shall be cognizable in a suit brought under paragraph (1)(B) of this subsection -
(A) if the amount in controversy of any individual claim is less than the sum or value of $25;
(B) if the amount in controversy is less than the sum or value of $50,000 (exclusive of interests and costs) computed on the basis of all claims to be determined in this suit; or
(C) if the action is brought as a class action, and the number of named plaintiffs is less than one hundred.
(e) Class actions; conditions; procedures applicable
No action (other than a class action or an action respecting a warranty to which subsection (a)(3) of this section applies) may be brought under subsection (d) of this section for failure to comply with any obligation under any written or implied warranty or service contract, and a class of consumers may not proceed in a class action under such subsection with respect to such a failure except to the extent the court determines necessary to establish the representative capacity of the named plaintiffs, unless the person obligated under the warranty or service contract is afforded a reasonable opportunity to cure such failure to comply. In the case of such a class action (other than a class action respecting a warranty to which subsection (a)(3) of this section applies) brought under subsection (d) of this section for breach of any written or implied warranty or service contract, such reasonable opportunity will be afforded by the named plaintiffs and they shall at that time notify the defendant that they are acting on behalf of the class. In the case of such a class action which is brought in a district court of the United States, the representative capacity of the named plaintiffs shall be established in the application of rule 23 of the Federal Rules of Civil Procedure. (f) Warrantors subject to enforcement of remedies
For purposes of this section, only the warrantor actually making a written affirmation of fact, promise, or undertaking shall be deemed to have created a written warranty, and any rights arising thereunder may be enforced under this section only against such warrantor and no other person.
Section 2311. Applicability to other laws
(a) Federal Trade Commission Act and Federal Seed Act
(1) Nothing contained in this chapter shall be construed to repeal, invalidate, or supersede the Federal Trade Commission Act (15 U.S.C. 41 et seq.) or any statute defined therein as an Antitrust Act.
(2) Nothing in this chapter shall be construed to repeal, invalidate, or supersede the Federal Seed Act (7 U.S.C. 1551 et seq.) and nothing in this chapter shall apply to seed for planting.
(b) Rights, remedies, and liabilities
(1) Nothing in this chapter shall invalidate or restrict any right or remedy of any consumer under State law or any other Federal law.
(2) Nothing in this chapter (other than sections 2308 and 2304(a)(2) and (4) of this title) shall (A) affect the liability of, or impose liability on, any person for personal injury, or (B) supersede any provision of State law regarding consequential damages for injury to the person or other injury.
(c) State warranty laws
(1) Except as provided in subsection (b) of this section and in paragraph (2) of this subsection, a State requirement -
(A) which relates to labeling or disclosure with respect to written warranties or performance thereunder;
(B) which is within the scope of an applicable requirement of sections 2302, 2303, and 2304 of this title (and rules implementing such sections), and
(C) which is not identical to a requirement of section 2302, 2303, or 2304 of this title (or a rule thereunder), shall not be applicable to written warranties complying with such sections (or rules thereunder).
(2) If, upon application of an appropriate State agency, the Commission determines (pursuant to rules issued in accordance with section 2309 of this title) that any requirement of such State covering any transaction to which this chapter applies
(A) affords protection to consumers greater than the requirements of this chapter and
(B) does not unduly burden interstate commerce, then such State requirement shall be applicable (notwithstanding the provisions of paragraph (1) of this subsection) to the extent specified in such determination for so long as the State administers and enforces effectively any such greater requirement.
(d) Other Federal warranty laws This chapter (other than section 2302(c) of this title) shall be inapplicable to any written warranty the making or content of which is otherwise governed by Federal law. If only a portion of a written warranty is so governed by Federal law, the remaining portion shall be subject to this chapter.
Section 2312. Effective dates
(a) Effective date of chapter
Except as provided in subsection (b) of this section, this chapter shall take effect 6 months after January 4, 1975, but shall not apply to consumer products manufactured prior to such date.
(b) Effective date of section 2302(a)
Section 2302(a) of this title shall take effect 6 months after the final publication of rules respecting such section; except that the Commission, for good cause shown, may postpone the applicability of such sections until one year after such final publication in order to permit any designated classes of suppliers to bring their written warranties into compliance with rules promulgated pursuant to this chapter.
(c) Promulgation of rules
The Commission shall promulgate rules for initial implementation of this chapter as soon as possible after January 4, 1975, but in no event later than one year after such date.
