Federal Lemon Law: Origin and Breadth

By Neal Spoton

Lemon laws are American state laws that provide a remedy for purchasers of cars that repeatedly fail to meet standards of quality and performance. These cars are called lemons. The federal lemon law (the Magnuson-Moss Warranty Act) protects citizens of all states. Lemon law rights vary, however, from state to state and some do not necessarily cover used or leased cars. The rights afforded to consumers by lemon laws may exceed the warranties expressed in purchase contracts. Lemon law is the common nickname for these laws, but each state has different names for the laws and acts.

Going back to the Magnuson-Moss Warranty Act (P.L. 93-637), however, it is a United States federal law (15 U.S.C. 2301 et seq.). Enacted in 1975, it is the federal statute that governs warranties on consumer products. The Act was sponsored by Senator Warren G. Magnuson of Washington and Congressman John E. Moss of California, both Democrats. Legislative history of the Act indicates that its purpose is to make warranties on consumer products (automobiles, in the case at hand) more readily understood and enforceable and to provide the Federal Trade Commission with means to better protect consumers.

Magnuson-Moss says that any warrantor who guarantees a consumer product (eg, an auto or car) to a citizen by means of a contract must disclose, fully and obviously, in simple and readily understood English, the terms and conditions of the warranty to the extent required by the rules of the FTC. The Federal Trade Commission has enacted regulations governing the provision of written consumer product warranty terms and conditions on consumer products actually costing the consumer more than $15 (e.g., cost of most cars).

The Act provides auto buyers access to reasonable and effective remedies where there is a breach of warranty on a consumer product (i.e., when they've been cheated). The Act provides for informal dispute-settlement procedures and for actions brought either by the government, by private parties, or both.

In the State of California, lemon laws cover anything mechanical, like the federal lemon laws. Federal lemon law also provides that the warranter may be obligated to pay the prevailing party's lemon law attorney fees in a successful lemon law suit, as do most state lemon laws. Lemon Laws vary from state to state -- therefore, accurate info on the scope and restrictions of Lemon Laws in a particular state should be obtained from a "Lemon Law Attorney" practicing in your state.

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