Lemon Law - New Jersey
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.
56:12-29 Findings, intentions.
The Legislature finds that the
purchase of a new motor vehicle is a major, high cost consumer
transaction and the inability to correct defects in these vehicles
creates a major hardship and an unacceptable economic burden on the
consumer. It is the intent of this act to require the manufacturer
of a new motor vehicle to correct defects originally covered under
the manufacturer's warranty which are identified and reported within
a specified period. It is the further intent of this act to provide
procedures to expeditiously resolve disputes between a consumer and
a manufacturer when defects in a new motor vehicle are not corrected
within a reasonable time, and to provide to award specific remedies
where the uncorrected defect substantially impairs the use, value,
or safety of the new motor vehicle.
56:12-30 Definitions.
As used in this act:
"Consumer" means a buyer
or lessee, other than for purposes of resale or sublease, of a motor
vehicle; a person to whom a motor vehicle is transferred during the
duration of a warranty applicable to the motor vehicle; or any other
person entitled by the terms of the warranty to enforce the
obligations of the warranty.
"Dealer" means a person
who is actively engaged in the business of buying, selling or
exchanging motor vehicles at retail and who has an established place
of business.
"Director" means the
Director of the Division of Consumer Affairs in the Department of
Law and Public Safety, or his designee.
"Division" means the
Division of Consumer Affairs in the Department of Law and Public
Safety.
"Lease agreement" means a
contract or other written agreement in the form of a lease for the
use of a motor vehicle by a person for a period of time exceeding 60
days, whether or not the lessee has the option to purchase or
otherwise become the owner of the motor vehicle at the expiration of
the lease.
"Lessee" means a person
who leases a motor vehicle pursuant to a lease agreement.
"Lessor" means a person
who holds title to a motor vehicle leased to a lessee under a lease
agreement or who holds the lessor's rights under such an agreement.
"Lien" means a security
interest in a motor vehicle.
"lien holder" means a
person with a security interest in a motor vehicle pursuant to a
lien.
"Manufacturer" means a
person engaged in the business of manufacturing, assembling or
distributing motor vehicles, who will, under normal business
conditions during the year, manufacture, assemble or distribute to
dealers at least 10 new motor vehicles.
"Manufacturer's informal
dispute settlement procedure" means an arbitration process or
procedure by which the manufacturer attempts to resolve disputes
with consumers regarding motor vehicle nonconformities and repairs
that arise during the vehicle's warranty period.
"Manufacturer's warranty"
or "warranty" means any warranty, whether express or
implied of the manufacturer, of a new motor vehicle of its condition
and fitness for use, including any terms or conditions precedent to
the enforcement of obligations under the warranty.
"Motor vehicle" means a
passenger automobile or motorcycle as defined in R.S.39:1-1 which is
purchased or leased in the State of New Jersey or which is
registered by the Division of Motor Vehicles in the Department of
Law and Public Safety, except the living facilities of motor homes.
"Nonconformity" means a
defect or condition which substantially impairs the use, value or
safety of a motor vehicle.
"Reasonable allowance for
vehicle use" means the mileage at the time the consumer first
presents the motor vehicle to the dealer or manufacturer for
correction of a nonconformity times the purchase price, or the lease
price if applicable, of the vehicle, divided by one hundred thousand
miles.
56:12-31 Report of
nonconformity; repairs.
If a consumer reports a
nonconformity in a motor vehicle to the manufacturer or its dealer
during the first 18,000 miles of operation or during the period of
two years following the date of original delivery to a consumer,
whichever is earlier, the manufacturer shall make, or arrange with
its dealer to make, within a reasonable time, all repairs necessary
to correct the nonconformity. Such repairs if made after the first
12,000 miles of operation or after the period of one year following
the date of original delivery to the consumer, whichever is earlier,
shall be paid for by the consumer, unless otherwise covered by a
manufacturer's warranty, and shall be recoverable as a cost under
section 14 of this act.
56:12-32 Refunds.
a. If, during the period
specified in section 3 of this act, the manufacturer or its dealer
is unable to repair or correct a nonconformity within a reasonable
time, the manufacturer shall accept return of the motor vehicle from
the consumer. The manufacturer shall provide the consumer with a
full refund of the purchase price of the original motor vehicle
including any stated credit or allowance for the consumer's used
motor vehicle, the cost of any options or other modifications
arranged, installed, or made by the manufacturer or its dealer
within 30 days after the date of original delivery, and any other
charges or fees including, but not limited to, sales tax, license
and registration fees, finance charges, reimbursement for towing and
reimbursement for actual expenses incurred by the consumer for the
rental of a motor vehicle equivalent to the consumer's motor vehicle
and limited to the period during which the consumer's motor vehicle
was out of service due to a nonconformity, less a reasonable
allowance for vehicle use. Nothing herein shall be construed to
preclude a manufacturer from making an offer to replace the vehicle
in lieu of a refund; except that the consumer may, in any case,
reject a manufacturer's offer of replacement and demand a refund.
Refunds shall be made to the consumer and lien holder, if any, as
their interests appear on the records of ownership maintained by the
Director of the Division of Motor Vehicles. In the event that the
consumer accepts an offer to replace the motor vehicle in lieu of a
refund, it shall be the manufacturer's responsibility to insure that
any lien on the returned motor vehicle is transferred to the
replacement vehicle.
b. A consumer who leases a
new motor vehicle shall have the same remedies against a
manufacturer under this section as a consumer who purchases a new
motor vehicle. If it is determined that the lessee is entitled to a
refund pursuant to subsection a. of this section, the consumer shall
return the leased vehicle to the lessor or manufacturer and the
consumer's lease agreement with the motor vehicle lessor shall be
terminated and no penalty for early termination shall be assessed.
The manufacturer shall provide the consumer with a full refund of
the amount actually paid by the consumer under the lease agreement,
including any additional charges as set forth in subsection a. of
this section if actually paid by the consumer, less a reasonable
allowance for vehicle use. The manufacturer shall provide the motor
vehicle lessor with a full refund of the vehicle's original purchase
price plus any un-recovered interest expense, less the amount
actually paid by the consumer under the agreement. Refunds shall be
made to the lessor and lien holder, if any, as their interests
appear on the records of ownership maintained by the Director of the
Division of Motor Vehicles.
56:12-33 Presumption of
inability to correct nonconformity; written notification.
a. It is presumed that a
manufacturer or its dealer is unable to repair or correct a
nonconformity within a reasonable time if, within the first 18,000
miles of operation or during the period of two years following the
date of original delivery of the motor vehicle to a consumer,
whichever is the earlier date:
(1) Substantially the same
nonconformity has been subject to repair three or more times by the
manufacturer or its dealer and the nonconformity continues to exist;
or
(2) The motor vehicle is out
of service by reason of repair for one or more nonconformities for a
cumulative total of 20 or more calendar days since the original
delivery of the motor vehicle and a nonconformity continues to
exist.
b. The presumption contained
in subsection a. of this section shall apply against a manufacturer
only if the manufacturer has received written notification, by or on
behalf of the consumer, by certified mail return receipt requested,
of a potential claim pursuant to the provisions of this act and has
had one opportunity to repair or correct the defect or condition
within 10 calendar days following receipt of the notification.
Notification by the consumer shall take place any time after the
motor vehicle has had substantially the same nonconformity subject
to repair two or more times or has been out of service by reason of
repair for a cumulative total of 20 or more calendar days.
c. The two-year term and the
20-day period specified in this section shall be extended by any
period of time during which repair services are not available to the
consumer because of a war, invasion or strike, or a fire, flood, or
other natural disaster.
56:12-34 Statements to
consumers.
a. At the time of purchase
in the State of New Jersey, the manufacturer through its dealer, or
at the time of lease in the State of New Jersey, the lessor, shall
provide directly to the consumer the following written statement on
a separate piece of paper, in 10-point bold-face type:
"IMPORTANT: IF THIS VEHICLE IS
DEFECTIVE, YOU MAY BE ENTITLED UNDER NEW JERSEY LAW TO A REFUND OF
THE PURCHASE PRICE OR YOUR LEASE PAYMENTS. FOR COMPLETE INFORMATION
REGARDING YOUR RIGHTS AND REMEDIES UNDER THE RELEVANT LAW, CONTACT
THE NEW JERSEY DEPARTMENT OF LAW AND PUBLIC SAFETY, DIVISION OF
CONSUMER AFFAIRS."
b. Each time a consumer's
motor vehicle is returned from being examined or repaired during the
period specified in section 3 of this act, the manufacturer through
its dealer shall provide to the consumer an itemized, legible
statement of repair which indicates any diagnosis made and all work
performed on the vehicle and provides information including, but not
limited to, the following: a general description of the problem
reported by the consumer or an identification of the problem
reported by the consumer or an identification of the defect or
condition; the amount charged for parts and the amount charged for
labor, if paid for by the consumer; the date and the odometer
reading when the vehicle was submitted for repair; and the date and
odometer reading when the vehicle was made available to the
consumer.
c. Failure to comply with
the provisions of this section constitutes an unlawful practice
pursuant to section 2 of P.L. 1960, c. 39 (C. 56:8-2).
56:12-35 Sale, leasing of
returned motor vehicle.
a. If a motor vehicle is
returned to the manufacturer under the provisions of this act or a
similar statute of another state or as the result of a legal action
or an informal dispute settlement procedure, it shall not be resold
or re-leased in New Jersey unless:
(1) The manufacturer
provides to the dealer or lessor and the dealer or lessor provides
to the consumer the following written statement on a separate piece
of paper, in 10-point bold-face type:
"IMPORTANT: THIS VEHICLE WAS
RETURNED TO THE MANUFACTURER BECAUSE IT DID NOT CONFORM TO THE
MANUFACTURER'S WARRANTY AND THE NONCONFORMITY WAS NOT CORRECTED
WITHIN A REASONABLE TIME AS PROVIDED BY LAW;"
(2) The dealer or lessor
obtains from the consumer a signed receipt certifying, in a
conspicuous and understandable manner, that the written statement
required under this subsection has been provided. The director shall
prescribe the form of the receipt. The dealer or lessor may fulfill
his obligation to obtain a signed receipt under this paragraph by
making such a notation, in a conspicuous and understandable manner,
on the vehicle buyer order form accompanying the sale or lease of
that vehicle; and
(3) The dealer or lessor, in
accordance with the provisions of section 1 of P.L.1993, c.21
(C.39:10-9.3), notifies the Director of the Division of Motor
Vehicles in the Department of Law and Public Safety of the sale or
transfer of ownership of the motor vehicle.
b. Nothing in this section
shall be construed as imposing an obligation on a dealer or lessor
to determine whether a manufacturer is in compliance with the terms
of this section nor shall it be construed as imposing liability on a
dealer or lessor for the failure of a manufacturer to comply with
the terms of this section.
c. Failure to comply with
the provisions of this section constitutes an unlawful practice
pursuant to section 2 of P.L.1960, c.39 (C.56:8-2).
56:12-36 Informal dispute
settlement procedure.
a. If a manufacturer has
established, or participates in, an informal dispute settlement
procedure pursuant to section 110 of Pub. L. 93-637 (15 U.S.C.
s.2310) and the rules promulgated there under, or the requirements
of this section, a consumer may submit a dispute regarding motor
vehicle nonconformities to the dispute settlement body provided by
that procedure but a consumer shall not be required to first
participate in the informal dispute settlement procedure before
participating in the division's summary hearing procedure under this
act.
b. If a consumer chooses to
use a manufacturer's informal dispute settlement procedure
established pursuant to this section, the findings and decisions of
the dispute settlement body shall state in writing whether the
consumer is entitled to a refund under the presumptions and criteria
set out in this act and the findings and decisions shall be
admissible against the consumer and the manufacturer in any legal
action.
c. If the dispute settlement
body determines that a consumer is entitled to relief under this
act, the consumer shall be entitled to a refund as authorized by
section 4 of this act.
d. In any informal dispute
settlement procedure established pursuant to this section:
(1) Participating
arbitrators shall be trained in arbitration and familiar with the
provisions of this act.
(2) Documents shall not be
submitted to any dispute settlement body unless the documents have
been provided to each of the parties in the dispute at least seven
days prior to commencement of the dispute settlement hearing. The
parties shall be given the opportunity to comment on the documents
in writing or with oral presentation.
(3) No party shall
participate in the informal dispute settlement procedure unless all
other parties are also present and given an opportunity to be heard,
or unless the other parties consent to proceeding without their
presence and participation.
(4) A consumer 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 manufacturer's informal dispute settlement procedure. If the
dispute settlement body rules in favor of the consumer, his costs
and reasonable attorney's fees shall also be awarded.
(5) A dispute shall not be
heard if there has been a recent attempt by the manufacturer to
repair a consumer's vehicle, but no response has yet been received
by the dispute settlement body from the consumer as to whether the
repairs were successfully completed. This provision shall not
prejudice a consumer's right under this section.
The manufacturer shall provide, and
the dispute settlement body shall consider, any relevant technical
service bulletins which have been issued by the manufacturer
regarding motor vehicles of the same make and model as the vehicle
that is the subject of the dispute.
e. Any manufacturer who
establishes, or participates in, an informal dispute settlement
procedure, whether it meets the requirements of this section or not,
shall maintain, and forward to the director at six month intervals,
the following records:
(1) The number of purchase
price and lease price refunds requested, the number awarded by the
dispute settlement body, the amount of each award and the number of
awards satisfied in a timely manner;
(2) The number of awards in
which additional repairs or a warranty extension was the most
prominent remedy, the amount or value of each award, and the number
of awards satisfied in a timely manner;
(3) The number and total
dollar amount of awards in which some form of reimbursement for
expenses or compensation for losses was the most prominent remedy,
the amount or value of each award and the number of awards satisfied
in a timely manner; and
(4) The average number of
days from the date of a consumer's initial request to use the
manufacturer's informal dispute settlement procedure until the date
of the decision and the average number of days from the date of the
decision to the date on which performance of the award was
satisfied.
56:12-37 Dispute resolution.
a. A consumer shall have the
option of submitting any dispute arising under section 4 of this act
to the division for resolution. The director may establish a filing
fee, to be paid by the consumer, fixed at a level not to exceed the
cost for the proper administration and enforcement of this act. This
fee shall be recoverable as a cost under section 14 of this act.
Upon application by the consumer and payment of any filing fee, the
manufacturer shall submit to the State hearing procedure. The filing
of the notice in subsection b. of section 5 of P.L.1988, c.123
(C.56:12-33) shall be a prerequisite to the filing of an application
under this section.
b. The director shall review
a consumer's application for dispute resolution and accept eligible
disputes for referral to the Office of Administrative Law for a
summary hearing to be conducted in accordance with special rules
adopted pursuant to the "Administrative Procedure Act,"
P.L.1968, c.410 (C.52:14B-1 et seq.), by the Office of
Administrative Law in consultation with the director. Immediately
upon acceptance of a consumer's application for dispute resolution,
the director shall contact the parties and arrange for a hearing
date with the Clerk of the Office of Administrative Law. The hearing
date shall, to the greatest extent possible, be convenient to all
parties, but shall be no later than 20 days from the date the
consumer's application is accepted, unless a later date is agreed
upon by the consumer. The Office of Administrative Law shall render
a decision, in writing, to the director within 20 days of the
conclusion of the summary hearing. The decision shall provide a
brief summary of the findings of fact, appropriate remedies pursuant
to this act, and a specific date for completion of all awarded
remedies. The director, upon a review of the proposed decision
submitted by the administrative law judge, shall adopt, reject, or
modify the decision no later than 15 days after receipt of the
decision. Unless the director modifies or rejects the decision
within the 15-day period, the decision of the administrative law
judge shall be deemed adopted as the final decision of the director.
If the manufacturer unreasonably fails to comply with the decision
within the specified time period, the manufacturer shall be liable
for penalties in the amount of $5,000.00 for each day the
manufacturer unreasonably fails to comply, commencing on the day
after the specified date for completion of all awarded remedies.
c. The Office of
Administrative Law is authorized to issue subpoenas to compel the
attendance of witnesses and the production of documents, papers and
records relevant to the dispute.
d. A manufacturer or
consumer may appeal a final decision to the Appellate Division of
the Superior Court. An appeal by a manufacturer shall not be heard
unless the petition for the appeal is accompanied by a bond in a
principal sum equal to the money award made by the administrative
law judge plus $2,500.00 for anticipated attorney's fees and other
costs, secured by cash or its equivalent, payable to the consumer.
The liability of the surety of any bond filed pursuant to this
section shall be limited to the indemnification of the consumer in
the action. The bond shall not limit or impair any right of recovery
otherwise available pursuant to law, nor shall the amount of the
bond be relevant in determining the amount of recovery to which the
consumer shall be entitled. If a final decision resulting in a
refund to the consumer is upheld by the court, recovery by the
consumer shall include reimbursement for actual expenses incurred by
the consumer for the rental of a motor vehicle equivalent to the
consumer's motor vehicle and limited to the period of time after
which the consumer's motor vehicle was offered to the manufacturer
for return under this act, except in those cases in which the
manufacturer made a comparable vehicle available to the consumer
free of charge during that period. If the court finds that the
manufacturer had no reasonable basis for its appeal or that the
appeal was frivolous, the court shall award treble damages to the
consumer. Failure of the Office of Administrative Law to render a
written decision within 20 days of the conclusion of the summary
hearing as required by subsection b. of this section shall not be a
basis for appeal.
e. The Attorney General
shall monitor the implementation and effectiveness of this act and
report to the Legislature after three years of operation, at which
time a recommendation shall be made either to continue under the
procedures set forth in this act or to make such modifications as
may be necessary to effectuate the purposes of this act.
56:12-38 Statistics.
a. The Division of Consumer
Affairs shall maintain an index of all motor vehicle disputes by
make and model. The division shall, at six-month intervals, compile
and maintain statistics indicating the record of manufacturer
compliance with any settlement procedure decisions. The statistics
shall be public record.
b. A manufacturer shall
provide to the division all information on private arbitration or
private buy-back programs maintained or instituted by the
manufacturer. The information shall include the type and number of
vehicles to which these programs apply and the reasons for
establishing and maintaining the programs. The manufacturer shall
provide the division with updated information at six month
intervals.
56:12-39 Decision binding.
A consumer shall not be required to
participate in a manufacturer's informal dispute settlement
procedure or the division's summary hearing procedure before filing
an action in the Superior Court. However, a decision rendered in a
proceeding brought pursuant to the division's summary hearing
procedure shall be binding on the consumer and the manufacturer,
subject to the right of appeal as set forth in subsection d. of
section 9 of this act, and shall preclude the institution of any
other action in the Superior Court under this act.
56:12-40 Affirmative defense.
It shall be an affirmative defense
to a claim under this act that the alleged nonconformity does not
substantially impair the use, value, or safety of the new motor
vehicle or that the nonconformity is the result of abuse, neglect,
or unauthorized modifications or alterations of the motor vehicle by
anyone other than the manufacturer or its dealer.
56:12-41 Pleading.
Any party to an action in the
Superior Court of this State asserting a claim, counterclaim or
defense based upon violations of this act shall mail a copy of the
initial or responsive pleading containing the claim, counterclaim or
defense to the Attorney General within 10 days after filing the
pleading with the court. Upon application to the court in which the
matter is pending, the Attorney General may intervene or appear in
any status appropriate to this matter.
56:12-42 Attorney, expert fees;
costs.
In any action by a consumer against
a manufacturer brought in Superior Court or in the division pursuant
to the provisions of this act, a prevailing consumer shall be
awarded reasonable attorney's fees, fees for expert witnesses and
costs.
56:12-43 Use of funds.
All fees, penalties and costs
collected by the division pursuant to this act shall be appropriated
for purposes of offsetting costs associated with the handling and
resolution of consumer automotive complaints.
56:12-44 Inherent design defect.
A manufacturer shall certify to the
division, within one year of discovery, the existence of any
inherent design defect common to all motor vehicles of a particular
model or make. Failure to comply with this constitutes an unlawful
practice pursuant to section 2 of P.L. 1960, c. 39 (C. 56:8-2).
56:12-45 Proceedings.
The director may institute
proceedings against any manufacturer who fails to comply with any of
the provisions of this act.
56:12-46 No liability, cause of
action.
Nothing in this act shall be
construed as imposing any liability on a dealer, or creating a cause
of action by a manufacturer against a dealer, and nothing shall be
construed as imposing any liability on a dealer, or creating a cause
of action by a consumer against a dealer under section 4 of this
act.
56:12-47 No limitation on
rights.
Nothing in this act shall in any
way limit the rights or remedies which are otherwise available to a
consumer under any other law.
56:12-48 Agreements void.
Any agreement entered into by a
consumer for the purchase or lease of a new motor vehicle which
waives, limits or disclaims the rights set forth in this act shall
be void as contrary to public policy.
56:12-49 Rules, regulations.
Within 120 days following
enactment, the director shall, subject to approval by the Attorney
General and pursuant to the provisions of the "Administrative
Procedure Act," P.L. 1968, c. 410 (C. 52:14B-1 et seq.), adopt
rules and regulations necessary to effectuate the purposes of this
act.
