Lemon Law - Arkansas
Lemon Law
Lemon Law - "Lemon
law" is that body of state law which defines an automobile
owners rights when the manufacturer is not able to repair the
automobile within the limits specified In
such cases, the automobile is referred to as a "lemon",
and is subject to the conditions of the state lemon law.
Your Lemon Law:
Disclaimer:
These pages are created to inform and educate the public about lemon
law and under the lemon law in your state.
They are not and should not be considered legal opinions or advice
as to whether you have rights under lemon law or whether you should
pursue "a lemon law case". If after reading
this information, you believe you qualify, you should seek the
advice and counsel of an attorney specializing in lemon law in your
state. Remember that each state's lemon laws vary.
§ 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, lienholder, 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 of the problem that gave rise to the nonconformity.
§ 4-90-407. Refunds.
(a)(1) Refunds shall be made to the
consumer and lienholder 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 less
or 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 disputesettlement procedure into the
terms of the written warranty to which the motorvehicle 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 casethe
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.
