Lemon laws are American state laws that provide a remedy for purchasers of cars and other consumer goods in order to compensate for products that repeatedly fail to meet standards of quality and performance. Although there may be defective products of all sorts ranging from small electrical appliances to huge pieces of machinery, and there is even a "puppy lemon law", the term "lemon" is generally thought of as applying to defective vehicles such as automobiles, trucks, SUVs, and motorcycles. A lemon law may mandate that if you have a car with a defect then you will automatically get the same car or the money back or a cheaper car OR a lemon law may mandate that if a vehicle produced is found to be defective, the manufacturer must acknowledge the defect and take the appropriate steps to either compensate the owner or provide the purchaser or lessee of the defective vehicle with a suitable replacement.
These vehicles and other goods are called "lemons". The federal lemon law (the Magnuson–Moss Warranty Act) was enacted in 1975 and protects citizens of all states. State lemon laws vary by state and may not necessarily cover used or leased cars, and other goods. 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.
There are two types of warranties. Express warranties are usually statements in writing such as those provided by the manufacturers in owner's manuals and other written sales or advertising materials, or by a sample or model. Implied warranties are broader in scope and assure consumers that the retail product would meet certain minimum standards of quality whereby the product is fit for use for the purpose intended. In each type the manufacturer assumes the liability and responsibility to correct the defect or to repurchase or replace the product.
Federal lemon laws cover anything mechanical. The federal lemon law also provides that the warranter may be obligated to pay the prevailing party's attorney in a successful lemon law suit, as do most state lemon laws.
At the core of most lemon laws is the manufacturer's breach of warranty. A manufacturer's warranty is what makes the manufacturer legally responsible for repairs to the consumer's vehicle or good. It is a form of guarantee. An express warranty is typically a written warranty. An implied warranty unlike an express warranty, is not written. The law imposes these obligations on the manufacturer, the seller or both as a matter of public policy. These vary from state to state.
Although each state imposes different requirements for their own consumer lemon laws, a basic condition common to virtually all jurisdictions is that in order for the lemon law to apply, the automobile or product must have been purchased with a warranty. Products purchased on an "as is" or "with all faults" basis are typically not covered by state or federal lemon laws.
The Canadian Motor Vehicle Arbitration Plan (CAMVAP) is the dispute resolution program for Canadians who have problems with the assembly of their vehicle or with how the manufacturer implements its new vehicle warranty. CAMVAP covers new and used, owned and leased vehicles that are from the current model year and up to an additional four model years.
CAMVAP is free for consumers, and hearings are held in the consumer's home community. The process normally takes less than 70 days from start to finish. Most consumers are able to handle their own case without the assistance of lawyers. The manufacturers do not use lawyers. Their representatives usually are serving or retired district parts and services representatives. An inspection of the vehicle normally is part of an arbitration hearing and the arbitrator can order a technical inspection of the vehicle at the program's expense if doing so is required.
CAMVAP arbitrators can order the manufacturer to buy back the vehicle; repair it at the manufacturer's expense; pay for repairs already completed; or pay out of pocket expenses for items such as towing, diagnostic testing, rental cars and accommodation related to the problem with the vehicle. The arbitrator can also determine that the manufacturer has no liability.
A similar "Lemon Law" was passed in Singapore's parliament on September 1, 2012, to strengthen consumer protection laws. Singapore's Lemon Law applies to all goods (including consumables and perishables) but it does not apply to services
Under the law, consumers can report a defective item within six months of delivery and it is the responsibility of the retailer to prove that the defect did not exist at the time of delivery. The consumer may have the option to request for repair or a replacement, and if that is not possible, ask for a reduction in price, or even a refund.
- "The Market for Lemons", 1970 paper by the economist George Akerlof
- Barron, Nancy (2000). Return to Sender: Getting a Refund or Replacement For Your Lemon Car (1st ed.). National Consumer Law Center. ISBN 1-881793-81-8.
- Vehicle Buyback Disclosure Project - FTC - Public Form on Vehicle Buyback Disclosures
- US Better Business Bureau: Learn More About State Lemon Laws
- Interview with John J. Woodcock III of West Hartford, Connecticut. Woodcock, as a Connecticut State Representative from South Windsor, was the proponent of the first "Lemon Law" enacted in the United States.
- Interview with Fred Blasius, President of the Connecticut Automotive Trades Association (CATA), which opposed the legislation.
- International Association of Lemon Law Administrators (IALLA)- find state lemon laws and the state agencies providing dispute resolution services and enforcement.
- John J. Woodcock III Lemon Law Records. Special Collections, Elihu Burritt Library at Central Connecticut State University.
- State Lemon Law Criteria - state by state lemon law criteria.