The Texas Lemon Law
Texas State Statutes
TEXAS MOTOR VEHICLE COMMISSION CODE
(ARTICLE 4413(36) VERNON'S TEXAS CIVIL STATUTES)
(LEMON LAW STATUTES)
General Warranty Complaints
Warranty Performance Obligations
Judicial Review - Appeal
General Warranty Complaints
The owner of a motor vehicle or the owner's designated agent may make a complaint concerning defects in a motor vehicle which are covered by a manufacturer's, converter's, or distributor's warranty agreement applicable to the vehicle. Any such complaint must be made in writing to the applicable dealer, manufacturer, converter, or distributor and must specify the defects in the vehicle which are covered by the warranty. The owner may also invoke the Commission's jurisdiction by sending the Commission a copy of the complaint. A hearing may be scheduled on all complaints arising under this subsection which are not privately resolved between the owner and the dealer, manufacturer, converter, or distributor.
Warranty Performance Obligations
- In addition to the other powers and duties provided for in this Act, the Commission shall cause manufacturers, converters, and distributors to perform the obligations imposed by this section. For purposes of this section, the term "owner" means a retail purchaser, lessor, lessee other than a sublessee, or the person so designated on the certificate of title to a motor vehicle issued by the State Department of Highways and Public Transportation, or an equivalent document issued by the duly authorized agency of any other state, or any person to whom such motor vehicle is legally transferred during the duration of a manufacturer's or distributor's express warranty applicable to such motor vehicle, and any other person entitled by the terms of the manufacturer's, converter's, or distributor's express warranty to enforce the obligations thereof.
- If a new motor vehicle does not conform to all applicable manufacturer's, converter's, or distributor's express warranties, the manufacturer, converter, or distributor shall make the repairs necessary to conform the vehicle to the applicable express warranties, notwithstanding that the repairs are made after the expiration of the warranties, if:
- the owner or the owner's designated agent reported the nonconformity to the manufacturer,converter, or distributor, its agent, or its franchised dealer during the term of such express warranties; or
- a rebuttable presumption relating to the vehicle was created under Subsection (d) of this section. This section does not in any way limit the remedies available to an owner under a new motor vehicle warranty that extends beyond the provisions of this section.
- If the manufacturer, converter, or distributor is unable to conform the motor vehicle to an applicable express warranty by repairing or correcting any defect or condition which creates a serious safety hazard or substantially impairs the use or market value of the motor vehicle after a reasonable number of attempts, the manufacturer, converter, or distributor shall
- replace the motor vehicle with a comparable motor vehicle; or
- accept return of the vehicle from the owner and refund to the owner the full purchase price less a reasonable allowance for the owner's use of the vehicle and any other allowances or refunds payable to the owner.
In this section, "impairment of market value" means a substantial loss in market value caused by a defect specific to the vehicle. In addition to replacing the vehicle or refunding the purchase price, the manufacturer, converter, or distributor shall reimburse the owner for reasonable incidental costs resulting from loss of use of the motor vehicle because of the nonconformity or defect. As necessary to promote the public interest, the Commission by rule shall define the incidental costs that are eligible for reimbursement, shall specify other requirements necessary to determine an eligible cost, and may set a maximum amount that is eligible for reimbursement, either by type of eligible cost or a total for all costs. Refunds shall be made to the owner and lienholder, if any, as their interests may appear. A reasonable allowance for use shall be that amount directly attributable to use of the motor vehicle when the vehicle is not out of service for repair. An order to refund or to replace may not be issued by the Executive Director against a manufacturer, converter, or distributor unless the manufacturer, converter, or distributor has been mailed prior written notification of the alleged nonconformity or defect from or on behalf of the owner and has been given an opportunity to cure the alleged defect or nonconformity. In any hearing before the Executive Director under this section, a manufacturer, converter, or distributor may plead and prove as an affirmative defense to the remedies provided hereunder that
- the nonconformity is the result of abuse, neglect, or unauthorized modifications or alterations of the motor vehicle; or
- the nonconformity does not substantially impair the use or market value of the motor vehicle. In this section, "serious safety hazard" means a life-threatening malfunction or nonconformity that substantially impedes a person's ability to control or operate a motor vehicle for ordinary use or intended purposes or that creates a substantial risk of fire or explosion.
- There is a rebuttable presumption that a reasonable number of attempts have been undertaken to conform a motor vehicle to the applicable express warranties if
- the same nonconformity has been subject to repair four or more times by the manufacturer, converter,or distributor, its agent, or its franchised dealer and two of the repair attempts have been made within a period of 12 months following the date of original delivery to an owner, or 12,000 miles, whichever occurs first, and the other two repair attempts occur within the 12 months or 12,000 miles immediately following the date of the second repair attempt, whichever occurs first, but such nonconformity continues to exist;
- the same nonconformity creates a serious safety hazard and has caused the vehicle to have been subject to repair two or more times by the manufacturer, converter, or distributor, or an authorized agent or franchised dealer, and at least one attempt to repair the nonconformity was made in the period of 12 months or 12,000 miles, whichever occurs first, and at least one other attempt made in the period of 12 months or 12,000 miles after the first repair attempt, whichever occurs first, but the nonconformity continues to exist; or
- the vehicle is out of service for repair for a cumulative total of 30 or more days in the 24 months or 24,000 miles, whichever occurs first, and at least two repair attempts were made in the first 12 months or 12,000 miles immediately following the date of original delivery to an owner and a nonconformity still exists that substantially impairs the vehicle's use or market value. The initial 12-month period or 12,000 mile limit, the subsequent 12-month period or 12,000 mile limit, and the 30-day period shall be extended by any period of time during which repair services are not available to the owner because of a war, invasion, strike or fire, flood, or other natural disaster. During any period of time that the manufacturer or distributor lends a comparable motor vehicle to the owner during the time the vehicle is being repaired by a franchised dealer, the 30-day period provided for in this subsection is tolled.
- The Commission shall adopt rules for the enforcement and implementation of this section.
- The Executive Director shall, in accordance with rules adopted by the Commission, conduct hearings and issue final orders for the enforcement and implementation of this section. Orders issued by the Executive Director under this section are considered final orders of the Commission.
- Except as provided by Subdivision (6) of this subsection, the provisions of this section are not available to an owner in an action seeking a refund or replacement based upon the alleged nonconformity of a motor vehicle to an express warranty applicable to the motor vehicle unless the owner has first exhausted the administrative remedies provided herein.
- The provisions of this section are not available to a party in an action against a seller under Chapter 2 or Chapter 17, Business & Commerce Code, as amended.
- Except as provided by Subdivision (6) of this subsection, the provisions of this section are available in an action against a manufacturer, converter, or distributor brought under Chapter 17, Business & Commerce Code, after the owner has exhausted the administrative remedies provided by this section.
- If, after a complaint has been filed under this section, the Hearing Examiner has not issued a proposal for decision and recommended to the Executive Director a final order before the expiration of the 150th day after the date the complaint was filed, the Executive Director shall, in writing sent by certified mail, so inform the complainant and the manufacturer, converter, or distributor of the expiration of the 150-day period and of the complainant's right to file a civil action. The Commission shall extend the 150-day period if a delay is requested or is caused by the complainant.
- After receipt of the notice of the right to file a civil action, the complainant may file a civil action against one or more of the persons complained of in the complaint.
- A failure by the Commission to issue a notice of the right to file a civil action does not affect a complainant's right to bring an action under this Act.
- Any party to a proceeding under this section before the Executive Director that is affected by a final order of the Executive Director is entitled to judicial review of the order under the substantial evidence rule in a District Court of Travis County, Texas. The judicial review is subject to the Administrative Procedure and Texas Register Act (Article6252-13a, Vernon's Texas Civil Statutes) except to the extent that that Act is inconsistent with this Act.
- This section does not limit the rights or remedies otherwise available to an owner under any other law.
- In a hearing under this section, the Executive Director shall make its order with respect to responsibility for payment of the cost of any refund or replacement and no manufacturer, converter, or distributor may cause any franchised dealer to pay directly or indirectly any sum not specifically so ordered by the Executive Director. If the Executive Director orders a manufacturer, converter, or distributor to refund or replace a motor vehicle because it meets the criteria set forth in this section, the Executive Director may order the franchised dealer to reimburse the owner, lienholder, manufacturer, converter, or distributor only for items or options added to the vehicle by the franchised dealer and only to the extent that one or more of such items or options contributed to the defect that served as the basis for the Executive Director's order of refund or replacement. In a case involving a leased vehicle,the Executive Director may terminate the lease and apportion the allowance for use and other allowances or refunds between the lessee and lessor of the vehicle.
- A proceeding brought under this section shall be commenced within six months following the earlier of
- expiration of the express warranty term or
- 24 months or 24,000 miles following the date of original delivery of the motor vehicle to an owner.
- A contractual provision that excludes or modifies the remedies provided for in this section is prohibited and shall be deemed null and void as against public policy unless the exclusion or modification is done with respect to a settlement agreement between the owner and the manufacturer, converter, or distributor.
- A manufacturer, distributor, or converter that has been ordered to repurchase or replace a vehicle shall, through its franchised dealer, issue a disclosure statement stating that the vehicle was repurchased or replaced by the manufacturer, distributor, or converter under this section. The disclosure statement must accompany the vehicle through the first retail purchase. The manufacturer, distributor, or converter must restore the cause of the repurchase or replacement to factory specifications and issue a new 12-month, 12,000-mile warranty on the vehicle. The disclosure statement must include a toll-free telephone number of the Commission that will enable a purchaser of a repurchased or replaced vehicle to obtain information about the condition or defect that was the basis of the order for repurchase or replacement. The Commission shall adopt rules for the enforcement of this subdivision.
- The Commission shall provide a toll-free telephone number for providing information to persons who request information about a condition or defect that was the basis for repurchase or replacement by an order of the Executive Director. The Commission shall maintain an effective method of providing information to persons who make the requests.
- The Commission shall publish an annual report on the motor vehicles ordered repurchased or replaced under this section. The report must list the number of vehicles by brand name and model and include a brief description of the conditions or defects that caused the repurchase or replacement. The Commission shall make the report available to the public. The Commission may charge a reasonable fee to recover the cost of the report.
- Information filed with the Board under this section is not a public record and is not subject to release under the open records law, Chapter 552, Government Code, until the complaint is finally resolved by order of the Board.
Amended by Chapter 266, Acts of the 63rd Legislature, Regular Session, 1973, effective June 11, 1973; amended by Chapter 128, Acts of the 64th Legislature, Regular Session, 1975, effective May 6, 1975; amended by Chapter 357, Acts of the 65th Legislature, Regular Session, 1977, effective June 10, 1977; amended by Chapter 709, Acts of the 66th Legislature, Regular Session, 1979, effective September 1, 1979; amended by Chapter 235, Acts of the 67th Legislature, Regular Session, 1981, effective May 28, 1981; amended by Chapters 81 and 844, Acts of the 68th Legislature, Regular Session, 1983, effective June 19,1983; amended by Chapter 241, Acts of the 69th Legislature, Regular Session, 1985, effective June 4, 1985; amended by Chapter 357, Acts of the 70th Legislature, Regular Session, 1987, effective June 11, 1987; amended by Chapter 1130, Acts of the 71st Legislature, Regular Session, 1989, effective June 16, 1989; amended by House Bill 524, 72nd Legislature, Regular Session, 1991, effective June 13, 1991; amended by Chapter 61, Acts of the 73rd Legislature, Regular Session, 1993, effective April 19, 1993; amended by Chapters 345 and 357, Acts of the 74th Legislature, Regular Session, 1995, effective June 8, 1995.
- Any party to a proceeding before the Commission that is affected by a final order, rule, decision, or other final action of the Commission is entitled to judicial review of any such final Commission action, under the substantial evidence rule, in a District Court of Travis County, Texas, or in the Court of Appeals for the Third Court of Appeals District, and to the extent not in consistent herewith, pursuant to the Administrative Procedure and Texas Register Act (Article 6252-13a, Vernon's Texas Civil Statutes). Appeals initiated in the District Courts of Travis County shall be removable to the Court of Appeals upon notice of removal to any such district court by any party at any time prior to trial in the district court. Appeals initiated in or removed to the Court of Appeals shall be initiated under the Administrative Procedure and Texas Register Act as if initiated in a Travis County District Court and shall, upon the filing thereof, be thereafter governed by the Texas Rules of Appellate Procedure.
- A final action, ruling, order, or decision of the Motor Vehicle Board of the Texas Department of Transportation, or the Director of the Motor Vehicle Division of the Texas Department of Transportation, as appropriate under the terms of this Act or other law, is the final action with respect to a matter arising under this Act, and is subject to review only by judicial review as provided by this Act. The petition for judicial review must be filed within 30 days of the date on which an action, ruling, order, or decision of the Board or the director first becomes final and appealable.
- Citation must be served on the Executive Director. Citation must also be served on all other parties of record before the Commission. For appeals initiated in the Court of Appeals, the court shall cause citation to be issued.
- Appeals in which evidence outside the Commission's record is to be taken under Section 19(d)(3), Administrative Procedure and Texas Register Act (Article 6252-13a,Version's Texas Civil Statutes), or otherwise, shall be initiated in a Travis County District Court, or having been initiated in the Court of Appeals, shall be subject to remand to a Travis County District Court for proceedings in accordance with instructions from the Court of Appeals.
- Appellants shall pursue appeals with reasonable diligence. If an appellant fails to prosecute an appeal within six months after the appeal is filed, the court shall presume that the appeal has been abandoned. The court shall dismiss any such appeal on a motion for dismissal made by the Attorney General or other party unless the appellant, after receiving due notice, demonstrates good cause for the delay.
- Appeal shall not affect the enforcement of a final Commission order unless its enforcement is enjoyable under Section 65.001 et seq., Civil Practice and Remedies Code,and under principles of primary jurisdiction.
Magnuson-Moss Warranty-Federal Trade Commission
The Magnuson-Moss Warranty Act is a federal
Law that protects the buyer of any product
which costs more than $25 and comes with
an express written warranty. This law applies
to any product that you buy that does not
perform as it should.
The Magnuson-Moss Act is a federal law giving
consumers considerable rights in dealing
with manufacturers and car-dealers of lemon
automobiles. This law guarantees a car buyer
that certain minimum requirements of warranties
must be met, and provides for disclosure
of warranties before purchase.
Regarding "lemon cars", this law greatly
affects the rights of car buyers. For any
product which has a written warranty, if
any part of the product, or the product
itself is considered defective, the warrantor
must permit the buyer the choice of either
a refund or replacement of the product.
We have argued successfully to juries that
the lemon manufacturers and car-dealers
should be given three (3) attempts to fix
the defect. Continued attempts to repair
beyond the initial three (3) should not
be allowed. We call this the "three strikes
and you're out" principle.
A consumer may pursue legal action in any
court of general jurisdiction in the United
States to enforce his rights under the Magnuson-Moss
Act. Attorney's fees based on actual time
spent will be covered if the consumer prevails.
Due to this particular condition, there
is quite a bit of financial pressure on
the manufacturer to settle consumer disputes
before going to court, as this would keep
their expenses down.
TARR BABY-The Uniform Commercial Code or
UCC has been enacted in all 50 states and
some of the territories of the United States.
It is the primary source of law in all contracts
dealing with the sale of products. The “TARR”
refers to Tender, Acceptance, Rejection,
Revocation and applies to different aspects
of the consumer's "relationship" with the
TENDER-The tender provisions of the Uniform
Commercial Code contained in Section 2-601
provide that the buyer is entitled to reject
any goods that fail in any respect to conform
to the contract. Unfortunately, new cars
are often technically complex and their
innermost workings are beyond the understanding
of the average new car buyer. The buyer,
therefore, does not know whether the goods
ACCEPTANCE-The new car buyer accepts the
goods believing and expecting that the manufacturer
will repair any problem he has with the
goods under the warranty.
REJECTION-The new car buyer may discover
a problem with the vehicle within the first
few miles of his purchase. This would allow
the new car buyer to reject the goods. If
the new car buyer discovers a defect in
the car within a reasonable time of inspecting
the vehicle, he may reject the vehicle.
This period is not defined. On the one hand,
the buyer must be given a reasonable time
to inspect and that reasonable time to inspect
will be held as an acceptance of the vehicle.
The courts will decide this reasonable time
to inspect based on the knowledge and experience
of the buyer, the difficulty in discovering
the defect, and the opportunity to discover
REVOCATION- What happens when the consumer
has used the new car for a lengthy period
of time? This is the typical lemon car case.
The UCC provides that a buyer may revoke
his acceptance of goods whose non-conformity
substantially impairs the value of the goods
to him when he has accepted the goods without
discovery of a non-conformity because it
was difficult to discover or if he was assured
that non-conformities would be repaired.
Of course, the average new car buyer does
not learn of the non-conformity until hundreds
of thousands of miles later. And because
quality is job one, and manufacturers are
competing on the basis of their warranties,
the consumer is always assured that any
non-conformities he does discover will be
Note: The author
of the sections on the Magnuson-Moss Warranty
Act and the Uniform Commercial Code is T.
Michael Flynn of www.defect.com.