Lemon Law - North Carolina
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.
20-351 Purpose.
This Article shall provide State
and private remedies against motor vehicle manufacturers for persons
injured by new motor vehicles failing to conform to express
warranties.
20-351.1 Definitions.
As used in this Article:
(1) "Consumer"
means the purchaser, other than for purposes of resale, or lessee
from a commercial lender, lessor, or from a manufacturer or dealer,
of a motor vehicle, and any other person entitled by the terms of an
express warranty to enforce the obligations of that warranty.
(2) "Manufacturer"
means any person or corporation, resident or nonresident, who
manufactures or assembles or imports or distributes new motor
vehicles which are sold in the State of North Carolina.
(3) "Motor
vehicle" includes a motor vehicle as defined in G.S. 20-4.01
which is sold or leased in this State, but does not include
"house trailer" as defined in G.S. 20-4.01 or any motor
vehicle with a gross vehicle weight of 10,000 pounds or more.
(4) "New motor
vehicle" means a motor vehicle for which a certificate of
origin, as required by G.S. 20-52.1 or a similar requirement in
another state, has never been supplied to a consumer, or which a
manufacturer, its agent, or its authorized dealer states in writing
is being sold as a new motor vehicle.
20-351.2 Require repairs.
When mileage warranty begins to
accrue.
(a) Express warranties for a
new motor vehicle shall remain in effect at least one year or 12,000
miles. If a new motor vehicle does not conform to all applicable
express warranties for a period of one year, or the term of the
express warranties, whichever is greater, following the date of
original delivery of the motor vehicle to the consumer, and the
consumer reports the nonconformity to the manufacturer, its agent,
or its authorized dealer during such period, the manufacturer shall
make, or arrange to have made, repairs necessary to conform the
vehicle to the express warranties, whether or not these repairs are
made after the expiration of the applicable warranty period.
(b) Any express warranty for
a new motor vehicle expressed in terms of a certain number of miles
shall begin to accrue from the mileage on the odometer at the date
of original delivery to the consumer.
20-351.3 Replacement or refund;
disclosure requirement.
(a) When the consumer is the
purchaser or a person entitled by the terms of the express warranty
to enforce the obligations of the warranty, if the manufacturer is
unable, after a reasonable number of attempts, to conform the motor
vehicle to any express warranty by repairing or correcting, or
arranging for the repair or correction of, any defect or condition
or series of defects or conditions which substantially impair the
value of the motor vehicle to the consumer, and which occurred no
later than 24 months or 24,000 miles following original delivery of
the vehicle, the manufacturer shall, at the option of the consumer,
replace the vehicle with a comparable new motor vehicle or accept
return of the vehicle from the consumer and refund to the consumer
the following:
(1) The full contract price
including, but not limited to, charges for undercoating, dealer
preparation and transportation, and installed options, plus the
non-refundable portions of extended warranties and service
contracts;
(2) All collateral charges,
including but not limited to, sales tax, license and registration
fees, and similar government charges;
(3) All finance charges
incurred by the consumer after he first reports the nonconformity to
the manufacturer, its agent, or its authorized dealer; and
(4) Any incidental damages
and monetary consequential damages.
(b) When consumer is a
lessee, if the manufacturer is unable, after a reasonable number of
attempts, to conform the motor vehicle to any express warranty by
repairing or correcting, or arranging for the repair or correction
of, any defect or condition or series of defects or conditions which
substantially impair the value of the motor vehicle to the consumer,
and which occurred no later than 24 months or 24,000 miles following
original delivery of the vehicle, the manufacturer shall, at the
option of the consumer, replace the vehicle with a comparable new
motor vehicle or accept return of the vehicle from the consumer and
refund the following:
(1) To the consumer:
a. All sums previously paid
by the consumer under the terms of the lease;
b. All sums previously paid
by the consumer in connection with entering into the lease
agreement, including, but not limited to, any capitalized cost
reduction, sales tax, license and registration fees, and similar
government charges; and
c. Any incidental and
monetary consequential damages.
(2) To the lessor, a full
refund of the lease price, plus an additional amount equal to five
percent (5%) of the lease price, less eighty-five percent (85%) of
the amount actually paid by the consumer to the lessor pursuant to
the lease. The lease price means the actual purchase cost of the
vehicle to the lessor.
In the case of a refund, the leased
vehicle shall be returned to the manufacturer and the consumer's
written lease shall be terminated by the lessor without any penalty
to the consumer. The lessor shall transfer title of the motor
vehicle to the manufacturer as necessary to effectuate the
consumer's rights pursuant to this Article, whether the consumer
chooses vehicle replacement or refund.
(c) Refunds shall be made to
the consumer, lessor and any lien holders as their interests may
appear. The refund to the consumer shall be reduced by a reasonable
allowance for the consumer's use of the vehicle. A reasonable
allowance for use is that amount directly attributable to use by the
consumer prior to his first report of the nonconformity to the
manufacturer, its agent, or its authorized dealer, and during any
subsequent period when the vehicle is not out of service because of
repair. "Reasonable allowance" is presumed to be the cash
price or the lease price, as the case may be, of the vehicle
multiplied by a fraction having as its denominator 100,000 miles and
its numerator the number of miles attributed to the consumer.
(d) If a manufacturer, its
agent, or its authorized dealer resells a motor vehicle that was
returned pursuant to this Article or any other State's applicable
law, regardless of whether there was any judicial determination that
the motor vehicle had any defect or that it failed to conform to all
express warranties, the manufacturer, its agent, or its authorized
dealer shall disclose to the subsequent purchaser prior to the sale:
(1) That the motor vehicle
was returned pursuant to this Article or pursuant to the applicable
law of any other State; and
(2) The defect or condition
or series of defects or conditions which substantially impaired the
value of the motor vehicle to the consumer.
Any subsequent purchaser who
purchases the motor vehicle for resale with notice of the return,
shall make the required disclosures to any person to whom he resells
the motor vehicle.
20-351.4 Affirmative defenses.
It is an affirmative defense to any
claim under this Article that an alleged nonconformity or series of
nonconformities are the result of abuse, neglect, odometer tampering
by the consumer or unauthorized modifications or alterations of a
motor vehicle.
20-351.5 Presumption.
(a) It is presumed that a
reasonable number of attempts have been undertaken to conform a
motor vehicle to the applicable express warranties if:
(1) The same nonconformity
has been presented for repair to the manufacturer, its agent, or its
authorized dealer four or more times but the same nonconformity
continues to exist; or
(2) The vehicle was out of
service to the consumer during or while awaiting repair of the
nonconformity or a series of nonconformities for a cumulative total
of 20 or more business days during any 12-month period of the
warranty, provided that the consumer has notified the manufacturer
directly in writing of the existence of the nonconformity or series
of nonconformities and allowed the manufacturer a reasonable period,
not to exceed 15 calendar days, in which to correct the
nonconformity or series of nonconformities. The manufacturer must
clearly and conspicuously disclose to the consumer in the warranty
or owners manual that written notification of a nonconformity is
required before a consumer may be eligible for a refund or
replacement of the vehicle and the manufacturer shall include in the
warranty or owners manual the name and address where the written
notification may be sent. Provided, further, that notice to the
manufacturer shall not be required if the manufacturer fails to make
the disclosures provided herein.
(b) The consumer may prove
that a defect or condition substantially impairs the value of the
motor vehicle to the consumer in a manner other than that set forth
in subsection (a) of this section.
(c) The term of an express
warranty, the one-year period, and the 20-day period shall be
extended by any period of time during which repair services are not
available to the consumer because of war, strike, or natural
disaster.
20-351.6 Civil action by the
Attorney General.
Whenever, in his opinion, the
interests of the public require it, it shall be the duty of the
Attorney General upon his ascertaining that any of the provisions of
this Article have been violated by the manufacturer to bring a civil
action in the name of the State, or any officer or department
thereof as provided by law, or in the name of the State on relation
of the Attorney General.
20-351.7 Civil action by the
consumer.
A consumer injured by reason of any
violation of the provisions of this Article may bring a civil action
against the manufacturer; provided, however, the consumer has given
the manufacturer written notice of his intent to bring an action
against the manufacturer at least 10 days prior to filing such suit.
Nothing in this section shall prevent a manufacturer from requiring
a consumer to utilize an informal settlement procedure prior to
litigation if that procedure substantially complies in design and
operation with the Magnuson-Moss Warranty Act, 15 USC 2301 et seq.,
and regulations promulgated there under, and that requirement is
written clearly and conspicuously, in the written warranty and any
warranty instructions provided to the consumer.
20-351.8 Remedies.
In any action brought under this
Article, the court may grant as relief:
(1) A permanent or temporary
injunction or other equitable relief as the court deems just;
(2) Monetary damages to the
injured consumer in the amount fixed by the verdict. Such damages
shall be trebled upon a finding that the manufacturer unreasonably
refused to comply with G.S. 20-351.2 or G.S. 20-351.3. The jury may
consider as damages all items listed for refund under G.S. 20-351.3;
(3) A reasonable attorney's
fee for the attorney of the prevailing party, payable by the losing
party, upon a finding by the court that:
a. The manufacturer
unreasonably failed or refused to fully resolve the matter which
constitutes the basis of such action; or
b. The party instituting the
action knew, or should have known, the action was frivolous and
malicious.
20-351.9 Dealership liability.
No authorized dealer shall be held
liable by the manufacturer for any refunds or vehicle replacements
in the absence of evidence indicating that dealership repairs have
been carried out in a manner substantially inconsistent with the
manufacturers' instructions. This Article does not create any cause
of action by a consumer against an authorized dealer.
20-351.10 Preservation of other
remedies.
This Article does not limit the
rights or remedies which are otherwise available to a consumer under
any other law.
