Arkansas Lemon Law Summary
Covered Vehicles:
Vehicle purchased or leased for transportation of persons or property, excluding living facilities of a mobile home or vehicles over 10,000 lbs.-but including motor homes. Excludes motorcycles and mopeds.
Repair Attempts or Days out of Service:
1 repair attempt for a defect that may cause death or serious injury or 3 repair attempts, 30 calendar days out of service, or 5 repair attempts on separate occasions to repair any non conformities that together impair the use and value of the vehicle.
Coverage Period:
2 years or 24,000 miles, whichever occurs last.
Arkansas Lemon Law Statute
Title 4, Subtitle 7, Chapter 90, Subchapter 4
Arkansas New Motor Vehicle Quality Assurance Act
4-90-401 Title.
This subchapter shall be known and may be cited as the "Arkansas New Motor Vehicle Quality Assurance Act".
4-90-402 Legislative determinations and intent.
The Arkansas General Assembly recognizes that a motor vehicle is a major consumer acquisition and that a defective motor vehicle undoubtedly creates a hardship for the consumer. The Arkansas General Assembly further recognizes that a duly franchised motor vehicle dealer is an authorized service agent of the manufacturer. It is the intent of the Arkansas General Assembly that a good faith motor vehicle warranty complaint by a consumer be resolved by the manufacturer within a specified period of time. It is further the intent of the Arkansas General Assembly to provide the statutory procedures whereby a consumer may receive a replacement motor vehicle, or a full refund, for a motor vehicle which cannot be brought into conformity with the warranty provided for in this subchapter. However, nothing in this subchapter shall in any way limit the rights or remedies which are otherwise available to a consumer under any other law.
4-90-403 Definitions.
As used in this subchapter, unless the context otherwise requires:
(1) "Calendar day" means any day of the week other than a legal holiday;
(2) "Collateral charges" means those additional charges to a consumer wholly incurred as a result of the acquisition of the motor vehicle. For the purposes of this subchapter, collateral charges include, but are not limited to, manufacturer-installed or agent-installed items, earned finance charges, sales taxes, title charges, and charges for extended warranties provided by the manufacturer, its subsidiary, or agent;
(3) "Condition" means a general problem that may be attributable to a defect in more than one (1) part;
(4) "Consumer" means the purchaser or lessee, other than for the purposes of lease or resale, of a new or previously untitled motor vehicle, or any other person entitled by the terms of the warranty to enforce the obligations of the warranty during the duration of the motor vehicle quality assurance period, provided the purchaser has titled and registered the motor vehicle as prescribed by law;
(5) "Incidental charges" means those reasonable costs incurred by the consumer, including, but not limited to, towing charges and the costs of obtaining alternative transportation which are directly caused by the nonconformity or nonconformities which are the subject of the claim, but shall not include loss of use, loss of income, or personal injury claims;
(6) "Lease price" means the aggregate of:
(A) The lessor's actual purchase costs;
(B) Collateral charges, if applicable;
(C) Any fee paid to another person to obtain the lease;
(D) Any insurance or other costs expended by the lessor for the benefit of the lease;
(E) An amount equal to state and local sales taxes, not otherwise included as collateral charges, paid by the lessor when the vehicle was initially purchased; and
(F) An amount equal to five percent (5%) of the lessor's actual purchase price;
(7) "Lessee" means any consumer who leases a motor vehicle for one (1) year or more pursuant to a written lease agreement which provides that the lessee is responsible for repairs to such motor vehicle;
(8) "Lessee cost" means the aggregate deposit and rental payments previously paid to the lessor for the leased vehicle;
(9) "Lessor" means a person who holds title to a motor vehicle leased to a lessee under the written lease agreement or who holds the lessor's rights under such agreement;
(10) "Manufacturer" means:
(A) Any person who is engaged in the business of constructing or assembling new motor vehicles or installing, on previously assembled vehicle chassis, special bodies or equipment which, when installed, form an integral part of the new motor vehicle; or
(B) In the case of motor vehicles not manufactured in the United States, any person who is engaged in the business of importing new motor vehicles into the United States for the purpose of selling or distributing new motor vehicles to new motor vehicle dealers;
(11) "Motor vehicle" or "vehicle" means any self-propelled vehicle licensed, purchased, or leased in this state and primarily designed for the transportation of persons or property over the public streets and highways, but does not include mopeds, motorcycles, the living facilities of a motor home, or vehicles over ten thousand pounds (10,000 lbs.) gross vehicle weight rating. For purposes of this definition, the limit of ten thousand pounds (10,000 lbs.) gross vehicle weight rating does not apply to motor homes;
(12) "Motor vehicle quality assurance period" means a period of time that:
(A) Begins:
(i) On the date of original delivery of a motor vehicle; or
(ii) In the case of a replacement vehicle provided by a manufacturer to a consumer under this subchapter, on the date of delivery of the replacement vehicle to the consumer; and
(B) Ends twenty-four (24) months after the date of the original delivery of the motor vehicle to a consumer, or the first twenty-four thousand (24,000) miles of operation attributable to the consumer, whichever is later;
(13) "Nonconformity" means any specific or generic defect or condition or any concurrent combination of defects or conditions that:
(A) Substantially impairs the use, market value, or safety of a motor vehicle; or
(B) Renders the motor vehicle nonconforming to the terms of an applicable manufacturer's express warranty or implied warranty of merchantability;
(14) "Person" means any natural person, partnership, firm, corporation, association, joint venture, trust, or other legal entity;
(15) "Purchase price" means the cash price paid for the motor vehicle appearing in the sales agreement or contract, including any net allowance for a trade-in vehicle;
(16) "Replacement motor vehicle" means a motor vehicle which is identical or reasonably equivalent to the motor vehicle to be replaced, as the motor vehicle replaced existed at the time of the original acquisition; and
(17) "Warranty" means any written warranty issued by the manufacturer, or any affirmation of fact or promise made by the manufacturer, excluding statements made by the dealer, in connection with the sale or lease of a motor vehicle to a consumer which relates to the nature of the material or workmanship and affirms or promises that such material or workmanship is free of defects or will meet a specified level of performance.
4-90-404 Notice by consumer - Disclosure by manufacturer, agent, or dealer.
(a)
(1) A consumer must notify the manufacturer of a claim under this subchapter if the manufacturer has made the disclosure required by subsection (b) of this section.
(2) However, if the manufacturer has not made the required disclosure, the consumer is not required to notify the manufacturer of a claim under this subchapter.
(b)
(1) At the time of the consumer's purchase or lease of the vehicle, the manufacturer, its agent, or an authorized dealer shall provide to the consumer a written statement that explains the consumer's rights and obligations under this subchapter.
(2) The written statement shall be prepared by the Consumer Protection Division of the Office of the Attorney General and shall include the telephone number of the Consumer Protection Division that the consumer can contact to obtain information regarding his or her rights and obligations under this subchapter.
(3) For each failure of the manufacturer, its agent, or an authorized dealer to provide to a consumer the written statement required under this section, the manufacturer shall be liable to the State of Arkansas for a civil penalty of not less than twenty-five dollars ($25.00) nor more than one thousand dollars ($1,000).
(c)
(1) The manufacturer shall clearly and conspicuously disclose to the consumer, in the warranty or owner's manual, that written notice of the nonconformity is required before the buyer may be eligible for a refund or replacement of the vehicle.
(2) The manufacturer shall provide the consumer with conspicuous notice of the address and phone number for its zone, district, or regional office for this state at the time of vehicle acquisition, to which the buyer must send notification.
4-90-405 Required warranty repairs.
If a motor vehicle does not conform to the warranty and the consumer reports the nonconformity to the manufacturer, its agent, or authorized dealer during the motor vehicle quality assurance period, the manufacturer, its agent, or authorized dealer shall make such repairs as are necessary to correct the nonconformity, even if the repairs are made after the expiration of the term of protection.
4-90-406 Failure to make required repairs.
(a)
(1) After three (3) attempts have been made to repair the same nonconformity that substantially impairs the motor vehicle, or after one (1) attempt to repair a nonconformity that is likely to cause death or serious bodily injury, the consumer shall give written notification, by certified or registered mail, to the manufacturer of the need to repair the nonconformity in order to allow the manufacturer a final attempt to cure the nonconformity.
(2) The manufacturer shall, within ten (10) days after receipt of the notification, notify and provide the consumer with the opportunity to have the vehicle repaired at a reasonably accessible repair facility, and, after delivery of the vehicle to the designated repair facility by the consumer, the manufacturer shall, within ten (10) days, conform the motor vehicle to the warranty.
(3) If the manufacturer fails to notify and provide the consumer with the opportunity to have the vehicle repaired at a reasonably accessible repair facility or fails to perform the repairs within the time periods prescribed in this subsection, the requirement that the manufacturer be given a final attempt to cure the nonconformity does not apply and a nonrebuttable presumption of a reasonable number of attempts to repair arises.
(b)
(1)
(A) If the manufacturer, its agent, or authorized dealer has not conformed the motor vehicle to the warranty by repairing or correcting one (1) or more nonconformities that substantially impair the motor vehicle after a reasonable number of attempts, the manufacturer, within forty (40) days, shall:
(i) At the time of its receipt of payment of a reasonable offset for use by the consumer, replace the motor vehicle with a replacement motor vehicle acceptable to the consumer; or
(ii) Repurchase the motor vehicle from the consumer or lessor and refund to the consumer or lessor the full purchase price or lease price, less a reasonable offset for use and less a reasonable offset for physical damage sustained to the vehicle while under the ownership of the consumer.
(B) The replacement or refund shall include payment of all collateral and reasonably incurred incidental charges.
(2)
(A) The consumer shall have an unconditional right to choose a refund rather than a replacement.
(B) At the time of such refund or replacement, the consumer, lien holder, or lessor shall furnish to the manufacturer clear title to and possession of the motor vehicle.
(3) The amount of reasonable offset for use by the consumer shall be determined by multiplying the actual price of the new motor vehicle paid or payable by the consumer, including any charges for transportation and manufacturer-installed or agent-installed options, by a fraction having as its denominator one hundred twenty thousand (120,000) and having as its numerator the number of miles traveled by the new motor vehicle prior to the time the buyer first delivered the vehicle to the manufacturer, its agent, or authorized dealer for correction if the problem that gave rise to the nonconformity.
4-90-407 Refunds.
(a)
(1) Refunds shall be made to the consumer and lien holder of record, if any, as their interests may appear.
(2) If applicable, refunds shall be made to the lessor and lessee as follows:
(A) The lessee shall receive the lessee cost less a reasonable offset for use; and
(B) The lessor shall receive the lease price less the aggregate deposit and rental payments previously paid to the lessor for the leased vehicle.
(b) If the manufacturer makes a refund to the lessor or lessee pursuant to this subchapter, the consumer's lease agreement with the lessor shall be terminated upon payment of the refund and no penalty for early termination shall be assessed.
(c) If a replaced vehicle was financed by the manufacturer, its subsidiary, or agent, the manufacturer, subsidiary, or agent may not require the buyer to enter into any refinancing agreement concerning a replacement vehicle that would create any financial obligations upon the buyer beyond those of the original financing agreement.
4-90-408 Reimbursement of towing and rental costs.
Whenever a vehicle is replaced or refunded under this subchapter, the manufacturer shall reimburse the consumer for necessary towing and rental costs actually incurred as a direct result of the nonconformity.
4-90-409 Option to retain use of vehicle.
A consumer has the option of retaining the use of any vehicle returned under this subchapter until the time that the consumer has been tendered a full refund or a replacement vehicle of comparable value.
4-90-410 Presumption of reasonable attempts to repair.
Extension of time to repair in case of war, invasion, strike, fire, flood, or natural disaster
(a) A rebuttable presumption of a reasonable number of attempts to repair is considered to have been undertaken to correct a nonconformity if:
(1) The nonconformity has been subject to repair as provided in 4-90-406(a), but the nonconformity continues to exist;
(2) The vehicle is out of service by reason of repair, or attempt to repair, any nonconformity for a cumulative total of thirty (30) calendar days; or
(3) There have been five (5) or more attempts, on separate occasions, to repair any nonconformities that together substantially impair the use and value of the motor vehicle to the consumer.
(b)
(1) The thirty (30) calendar days in subdivision (a)(2) of this section shall be extended by any period of time during which repair services are not available as a direct result of war, invasion, strike, fire, flood, or natural disaster.
(2) The manufacturer, its agent, or authorized dealer shall provide or make provisions for the free use of a vehicle to any consumer whose vehicle is out of service beyond thirty (30) days by reason of delayed repair as a direct result of war, invasion, strike, fire, flood, or natural disaster.
(c) The burden is on the manufacturer to show that the reason for an extension under subsection (b) of this section was the direct cause for the failure of the manufacturer, its agent, or authorized dealer to cure any nonconformity during the time of the event.
4-90-411 Diagnosis or repair - Documentation.
(a) A manufacturer, its agent, or authorized dealer may not refuse to diagnose or repair any vehicle for the purpose of avoiding liability under this subchapter.
(b)
(1) A manufacturer, its agent, or authorized dealer shall provide a consumer with a written repair order each time the consumer's vehicle is brought in for examination or repair.
(2) The repair order must indicate all work performed on the vehicle, including examination of the vehicle, parts, and labor.
4-90-412 Resale of returned nonconforming vehicle.
If a motor vehicle has been replaced or repurchased by a manufacturer as the result of a court judgment, an arbitration award, or any voluntary agreement entered into between a manufacturer and a consumer that occurs after a consumer complaint has been investigated and evaluated pursuant to this subchapter or a similar law of another state, the motor vehicle may not be resold in Arkansas unless:
(1) The manufacturer provides the same express warranty the manufacturer provided to the original purchaser, except that the term of the warranty need only last for twelve thousand (12,000) miles or twelve (12) months after the date of resale, whichever occurs first; and
(2) The manufacturer provides a written disclosure, signed by the consumer, indicating that the vehicle was returned to the manufacturer because of a nonconformity not cured within a reasonable time as provided by Arkansas law.
4-90-413 Affirmative defenses.
It is an affirmative defense to any claim under this subchapter that:
(1) The nonconformity, defect, or condition does not substantially impair the use, value, or safety of the motor vehicle;
(2) The nonconformity, defect, or condition is the result of an accident, abuse, neglect, or unauthorized modification or alteration of the motor vehicle by persons other than the manufacturer, its agent, or authorized dealer;
(3) The claim by the consumer was not filed in good faith; or
(4) Any other defense allowed by law that may be raised against the claim.
4-90-414 Informal proceeding as precedent.
(a)
(1) Any manufacturer doing business in this state, entering into franchise agreements for the sale of its motor vehicles in this state, or offering express warranties on its motor vehicles sold or distributed for sale in this state, shall operate, or participate in, an informal dispute settlement proceeding located in the State of Arkansas which complies with the requirements of this section.
(2) The provisions of 4-90-406(b)(1) and (2) concerning refunds or replacement do not apply to a consumer who has not first used this informal proceeding before commencing a civil action, unless the manufacturer allows a consumer to commence an action without first using this informal procedure.
(3)
(A) The consumer shall receive adequate written notice from the manufacturer of the existence of the procedure.
(B) Adequate written notice may include the incorporation of the informal dispute settlement procedure into the terms of the written warranty to which the motor vehicle does not conform.
(b) The informal dispute procedure must be certified by the Consumer Protection Division of the Office of the Attorney General as meeting the following criteria:
(1) The informal dispute procedure must comply with the minimum requirements of the Federal Trade Commission for informal dispute settlement procedures as set forth in 16 C.F.R. 703.1 et seq., as in effect on the date of adoption of this subchapter, unless any provision of 16 C.F.R. 703.1 et seq. is in conflict with this subchapter, in which case the provisions of this subchapter shall govern;
(2) The informal dispute procedure must prescribe a reasonable time, not to exceed thirty (30) days after the decision is accepted by the buyer, within which the manufacturer or its agent must fulfill the terms of its decisions;
(3)
(A) No documents shall be received by any informal dispute procedure unless those documents have been provided to each of the parties in the dispute at or prior to the proceeding, with an opportunity for the parties to comment on the documents either in writing or orally.
(B) If a consumer is present during the informal dispute proceeding, the consumer may request postponement of the proceeding meeting to allow sufficient time to review any documents presented at the time of the meeting which had not been presented to the consumer prior to the time of the meeting;
(4)
(A) The informal dispute procedure shall allow each party to appear and make an oral presentation within the State of Arkansas unless the consumer agrees to submit the dispute for decision on the basis of documents alone or by telephone, or unless the party fails to appear for an oral presentation after reasonable prior written notice.
(B) If the consumer agrees to submit the dispute for decision on the basis of documents alone, then the manufacturer or dealer representatives may not participate in the discussion or decision of the dispute;
(5) Consumers 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 informal dispute settlement hearing;
(6) A consumer may not be charged with a fee to participate in an informal dispute procedure; and
(7) Any party to the dispute has the right to be represented by an attorney in an informal dispute proceeding.
(c)
(1)
(A) The informal dispute procedure shall annually submit a pool of not less than six (6) members who are appointed with the advice and consent of the Consumer Protection Division of the Office of the Attorney General.
(B) Selected strictly by rotation, one (1) member shall hear disputes scheduled for a particular session unless the consumer requests a panel of three (3) members, in which case three (3) members shall hear disputes scheduled for a particular three-member session.
(C) If the informal dispute procedure deems it appropriate to require the services of an independent investigator, such investigator shall be selected from a pool of not less than four (4) members who are appointed annually with the advice and consent of the Consumer Protection Division of the Office of the Attorney General and from which the particular investigator shall be selected strictly by rotation.
(2) Upon notification to the administrator of any informal dispute procedure that a determination has been made by the Consumer Protection Division of the Office of the Attorney General that a member of any pool is not conforming to standards of fairness and impartiality, that member shall be immediately removed from the pool.
4-90-415 Enforcement - Exclusivity - Costs and expenses.
(a) A consumer may bring a civil action to enforce this subchapter in a court of competent jurisdiction.
(b) This subchapter does not limit the rights and remedies that are otherwise available to a consumer under any applicable provisions of law.
(c) A consumer who prevails in any legal proceeding under this subchapter is entitled to recover as part of the judgment a sum equal to the aggregate amount of costs and expenses, including attorney's fees based upon actual time expended by the attorney, determined by the court to have been reasonably incurred by the consumer for or in connection with the commencement and prosecution of the action.
4-90-416 Time limitation for commencement of action.
(a) An action brought under this subchapter must be commenced within two (2) years following the date the buyer first reports the nonconformity to the manufacturer, its agent, or authorized dealer.
(b) When the buyer has commenced an informal dispute settlement procedure described in 4-90-414, the two-year period specified in subsection (a) of this section begins to run at the time the informal dispute settlement procedure is being commenced.
4-90-417 Deceptive trade practices.
A violation of any of the provisions of this subchapter shall be deemed a deceptive trade practice under 4-88-101 et seq.
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.
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