Federal Lemon Law

15 USC Sec. 2301

For the purposes of this chapter:

(1) The term “consumer product” means any tangible personal

property which is distributed in commerce and which is normally

used for personal, family, or household purposes (including any

such property intended to be attached to or installed in any real

property without regard to whether it is so attached or

installed).

(2) The term “Commission” means the Federal Trade Commission.

(3) The term “consumer” means a buyer (other than for purposes

of resale) of any consumer product, any person to whom such

product is transferred during the duration of an implied or

written warranty (or service contract) applicable to the product,

and any other person who is entitled by the terms of such

warranty (or service contract) or under applicable State law to

enforce against the warrantor (or service contractor) the

obligations of the warranty (or service contract).

(4) The term “supplier” means any person engaged in the

business of making a consumer product directly or indirectly

available to consumers.

(5) The term “warrantor” means any supplier or other person who

gives or offers to give a written warranty or who is or may be

obligated under an implied warranty.

(6) The term “written warranty” means –

(A) any written affirmation of fact or written promise made

in connection with the sale of a consumer product by a supplier

to a buyer which relates to the nature of the material or

workmanship and affirms or promises that such material or

workmanship is defect free or will meet a specified level of

performance over a specified period of time, or

(B) any undertaking in writing in connection with the sale by

a supplier of a consumer product to refund, repair, replace, or

take other remedial action with respect to such product in the

event that such product fails to meet the specifications set

forth in the undertaking,

which written affirmation, promise, or undertaking becomes part

of the basis of the bargain between a supplier and a buyer for

purposes other than resale of such product.

(7) The term “implied warranty” means an implied warranty

arising under State law (as modified by sections 2308 and 2304(a)

of this title) in connection with the sale by a supplier of a

consumer product.

(8) The term “service contract” means a contract in writing to

perform, over a fixed period of time or for a specified duration,

services relating to the maintenance or repair (or both) of a

consumer product.

(9) The term “reasonable and necessary maintenance” consists of

those operations (A) which the consumer reasonably can be

expected to perform or have performed and (B) which are necessary

to keep any consumer product performing its intended function and

operating at a reasonable level of performance.

(10) The term “remedy” means whichever of the following actions

the warrantor elects:

(A) repair,

(B) replacement, or

(C) refund;

except that the warrantor may not elect refund unless (i) the

warrantor is unable to provide replacement and repair is not

commercially practicable or cannot be timely made, or (ii) the

consumer is willing to accept such refund.

(11) The term “replacement” means furnishing a new consumer

product which is identical or reasonably equivalent to the

warranted consumer product.

(12) The term “refund” means refunding the actual purchase

price (less reasonable depreciation based on actual use where

permitted by rules of the Commission).

(13) The term “distributed in commerce” means sold in commerce,

introduced or delivered for introduction into commerce, or held

for sale or distribution after introduction into commerce.

(14) The term “commerce” means trade, traffic, commerce, or

transportation –

(A) between a place in a State and any place outside thereof,

or

(B) which affects trade, traffic, commerce, or transportation

described in subparagraph (A).

(15) The term “State” means a State, the District of Columbia,

the Commonwealth of Puerto Rico, the Virgin Islands, Guam, the

Canal Zone, or American Samoa. The term “State law” includes a

law of the United States applicable only to the District of

Columbia or only to a territory or possession of the United

States; and the term “Federal law” excludes any State law.

15 USC Sec. 2302

(a) Full and conspicuous disclosure of terms and conditions;

additional requirements for contents

In order to improve the adequacy of information available to

consumers, prevent deception, and improve competition in the

marketing of consumer products, any warrantor warranting a consumer

product to a consumer by means of a written warranty shall, to the

extent required by rules of the Commission, fully and conspicuously

disclose in simple and readily understood language the terms and

conditions of such warranty. Such rules may require inclusion in

the written warranty of any of the following items among others:

(1) The clear identification of the names and addresses of the

warrantors.

(2) The identity of the party or parties to whom the warranty

is extended.

(3) The products or parts covered.

(4) A statement of what the warrantor will do in the event of a

defect, malfunction, or failure to conform with such written

warranty – at whose expense – and for what period of time.

(5) A statement of what the consumer must do and expenses he

must bear.

(6) Exceptions and exclusions from the terms of the warranty.

(7) The step-by-step procedure which the consumer should take

in order to obtain performance of any obligation under the

warranty, including the identification of any person or class of

persons authorized to perform the obligations set forth in the

warranty.

(8) Information respecting the availability of any informal

dispute settlement procedure offered by the warrantor and a

recital, where the warranty so provides, that the purchaser may

be required to resort to such procedure before pursuing any legal

remedies in the courts.

(9) A brief, general description of the legal remedies

available to the consumer.

(10) The time at which the warrantor will perform any

obligations under the warranty.

(11) The period of time within which, after notice of a defect,

malfunction, or failure to conform with the warranty, the

warrantor will perform any obligations under the warranty.

(12) The characteristics or properties of the products, or

parts thereof, that are not covered by the warranty.

(13) The elements of the warranty in words or phrases which

would not mislead a reasonable, average consumer as to the nature

or scope of the warranty.

(b) Availability of terms to consumer; manner and form for

presentation and display of information; duration; extension of

period for written warranty or service contract

(1)(A) The Commission shall prescribe rules requiring that the

terms of any written warranty on a consumer product be made

available to the consumer (or prospective consumer) prior to the

sale of the product to him.

(B) The Commission may prescribe rules for determining the manner

and form in which information with respect to any written warranty

of a consumer product shall be clearly and conspicuously presented

or displayed so as not to mislead the reasonable, average consumer,

when such information is contained in advertising, labeling, point-

of-sale material, or other representations in writing.

(2) Nothing in this chapter (other than paragraph (3) of this

subsection) shall be deemed to authorize the Commission to

prescribe the duration of written warranties given or to require

that a consumer product or any of its components be warranted.

(3) The Commission may prescribe rules for extending the period

of time a written warranty or service contract is in effect to

correspond with any period of time in excess of a reasonable period

(not less than 10 days) during which the consumer is deprived of

the use of such consumer product by reason of failure of the

product to conform with the written warranty or by reason of the

failure of the warrantor (or service contractor) to carry out such

warranty (or service contract) within the period specified in the

warranty (or service contract).

(c) Prohibition on conditions for written or implied warranty;

waiver by Commission

No warrantor of a consumer product may condition his written or

implied warranty of such product on the consumer’s using, in

connection with such product, any article or service (other than

article or service provided without charge under the terms of the

warranty) which is identified by brand, trade, or corporate name;

except that the prohibition of this subsection may be waived by the

Commission if –

(1) the warrantor satisfies the Commission that the warranted

product will function properly only if the article or service so

identified is used in connection with the warranted product, and

(2) the Commission finds that such a waiver is in the public

interest.

The Commission shall identify in the Federal Register, and permit

public comment on, all applications for waiver of the prohibition

of this subsection, and shall publish in the Federal Register its

disposition of any such application, including the reasons

therefor.

(d) Incorporation by reference of detailed substantive warranty

provisions

The Commission may by rule devise detailed substantive warranty

provisions which warrantors may incorporate by reference in their

warranties.

(e) Applicability to consumer products costing more than $5

The provisions of this section apply only to warranties which

pertain to consumer products actually costing the consumer more

than $5.

15 USC Sec. 2303

(a) Full (statement of duration) or limited warranty

Any warrantor warranting a consumer product by means of a written

warranty shall clearly and conspicuously designate such warranty in

the following manner, unless exempted from doing so by the

Commission pursuant to subsection (c) of this section:

(1) If the written warranty meets the Federal minimum standards

for warranty set forth in section 2304 of this title, then it

shall be conspicuously designated a “full (statement of duration)

warranty”.

(2) If the written warranty does not meet the Federal minimum

standards for warranty set forth in section 2304 of this title,

then it shall be conspicuously designated a “limited warranty”.

(b) Applicability of requirements, standards, etc., to

representations or statements of customer satisfaction

This section and sections 2302 and 2304 of this title shall not

apply to statements or representations which are similar to

expressions of general policy concerning customer satisfaction and

which are not subject to any specific limitations.

(c) Exemptions by Commission

In addition to exercising the authority pertaining to disclosure

granted in section 2302 of this title, the Commission may by rule

determine when a written warranty does not have to be designated

either “full (statement of duration)” or “limited” in accordance

with this section.

(d) Applicability to consumer products costing more than $10 and

not designated as full warranties

The provisions of subsections (a) and (c) of this section apply

only to warranties which pertain to consumer products actually

costing the consumer more than $10 and which are not designated

“full (statement of duration) warranties”.

15 USC Sec. 2304

(a) Remedies under written warranty; duration of implied warranty;

exclusion or limitation on consequential damages for breach of

written or implied warranty; election of refund or replacement

In order for a warrantor warranting a consumer product by means

of a written warranty to meet the Federal minimum standards for

warranty –

(1) such warrantor must as a minimum remedy such consumer

product within a reasonable time and without charge, in the case

of a defect, malfunction, or failure to conform with such written

warranty;

(2) notwithstanding section 2308(b) of this title, such

warrantor may not impose any limitation on the duration of any

implied warranty on the product;

(3) such warrantor may not exclude or limit consequential

damages for breach of any written or implied warranty on such

product, unless such exclusion or limitation conspicuously

appears on the face of the warranty; and

(4) if the product (or a component part thereof) contains a

defect or malfunction after a reasonable number of attempts by

the warrantor to remedy defects or malfunctions in such product,

such warrantor must permit the consumer to elect either a refund

for, or replacement without charge of, such product or part (as

the case may be). The Commission may by rule specify for purposes

of this paragraph, what constitutes a reasonable number of

attempts to remedy particular kinds of defects or malfunctions

under different circumstances. If the warrantor replaces a

component part of a consumer product, such replacement shall

include installing the part in the product without charge.

(b) Duties and conditions imposed on consumer by warrantor

(1) In fulfilling the duties under subsection (a) of this section

respecting a written warranty, the warrantor shall not impose any

duty other than notification upon any consumer as a condition of

securing remedy of any consumer product which malfunctions, is

defective, or does not conform to the written warranty, unless the

warrantor has demonstrated in a rulemaking proceeding, or can

demonstrate in an administrative or judicial enforcement proceeding

(including private enforcement), or in an informal dispute

settlement proceeding, that such a duty is reasonable.

(2) Notwithstanding paragraph (1), a warrantor may require, as a

condition to replacement of, or refund for, any consumer product

under subsection (a) of this section, that such consumer product

shall be made available to the warrantor free and clear of liens

and other encumbrances, except as otherwise provided by rule or

order of the Commission in cases in which such a requirement would

not be practicable.

(3) The Commission may, by rule define in detail the duties set

forth in subsection (a) of this section and the applicability of

such duties to warrantors of different categories of consumer

products with “full (statement of duration)” warranties.

(4) The duties under subsection (a) of this section extend from

the warrantor to each person who is a consumer with respect to the

consumer product.

(c) Waiver of standards

The performance of the duties under subsection (a) of this

section shall not be required of the warrantor if he can show that

the defect, malfunction, or failure of any warranted consumer

product to conform with a written warranty, was caused by damage

(not resulting from defect or malfunction) while in the possession

of the consumer, or unreasonable use (including failure to provide

reasonable and necessary maintenance).

(d) Remedy without charge

For purposes of this section and of section 2302(c) of this

title, the term “without charge” means that the warrantor may not

assess the consumer for any costs the warrantor or his

representatives incur in connection with the required remedy of a

warranted consumer product. An obligation under subsection

(a)(1)(A) of this section to remedy without charge does not

necessarily require the warrantor to compensate the consumer for

incidental expenses; however, if any incidental expenses are

incurred because the remedy is not made within a reasonable time or

because the warrantor imposed an unreasonable duty upon the

consumer as a condition of securing remedy, then the consumer shall

be entitled to recover reasonable incidental expenses which are so

incurred in any action against the warrantor.

(e) Incorporation of standards to products designated with full

warranty for purposes of judicial actions

If a supplier designates a warranty applicable to a consumer

product as a “full (statement of duration)” warranty, then the

warranty on such product shall, for purposes of any action under

section 2310(d) of this title or under any State law, be deemed to

incorporate at least the minimum requirements of this section and

rules prescribed under this section.

15 USC Sec. 2305

Nothing in this chapter shall prohibit the selling of a consumer

product which has both full and limited warranties if such

warranties are clearly and conspicuously differentiated.

15 USC Sec. 2306

(a) The Commission may prescribe by rule the manner and form in

which the terms and conditions of service contracts shall be fully,

clearly, and conspicuously disclosed.

(b) Nothing in this chapter shall be construed to prevent a

supplier or warrantor from entering into a service contract with

the consumer in addition to or in lieu of a written warranty if

such contract fully, clearly, and conspicuously discloses its terms

and conditions in simple and readily understood language.

15 USC Sec. 2307

Nothing in this chapter shall be construed to prevent any

warrantor from designating representatives to perform duties under

the written or implied warranty: Provided, That such warrantor

shall make reasonable arrangements for compensation of such

designated representatives, but no such designation shall relieve

the warrantor of his direct responsibilities to the consumer or

make the representative a cowarrantor.

15 USC Sec. 2308

(a) Restrictions on disclaimers or modifications

No supplier may disclaim or modify (except as provided in

subsection (b) of this section) any implied warranty to a consumer

with respect to such consumer product if (1) such supplier makes

any written warranty to the consumer with respect to such consumer

Product, or (2) at the time of sale, or within 90 days thereafter,

such supplier enters into a service contract with the consumer

which applies to such consumer product.

(b) Limitation on duration

For purposes of this chapter (other than section 2304(a)(2) of

this title), implied warranties may be limited in duration to the

duration of a written warranty of reasonable duration, if such

limitation is conscionable and is set forth in clear and

unmistakable language and prominently displayed on the face of the

warranty.

(c) Effectiveness of disclaimers, modifications, or limitations

A disclaimer, modification, or limitation made in violation of

this section shall be ineffective for purposes of this chapter and

State law.

15 USC Sec. 2309

(a) Oral presentation

Any rule prescribed under this chapter shall be prescribed in

accordance with section 553 of title 5; except that the Commission

shall give interested persons an opportunity for oral presentations

of data, views, and arguments, in addition to written submissions.

A transcript shall be kept of any oral presentation. Any such rule

shall be subject to judicial review under section 57a(e) of this

title in the same manner as rules prescribed under section

57a(a)(1)(B) of this title, except that section 57a(e)(3)(B) of

this title shall not apply.

(b) Warranties and warranty practices involved in sale of used

motor vehicles

The Commission shall initiate within one year after January 4,

1975, a rulemaking proceeding dealing with warranties and warranty

practices in connection with the sale of used motor vehicles; and,

to the extent necessary to supplement the protections offered the

consumer by this chapter, shall prescribe rules dealing with such

warranties and practices. In prescribing rules under this

subsection, the Commission may exercise any authority it may have

under this chapter, or other law, and in addition it may require

disclosure that a used motor vehicle is sold without any warranty

and specify the form and content of such disclosure.

15 USC Sec. 2310

(a) Informal dispute settlement procedures; establishment; rules

setting forth minimum requirements; effect of compliance by

warrantor; review of informal procedures or implementation by

Commission; application to existing informal procedures

(1) Congress hereby declares it to be its policy to encourage

warrantors to establish procedures whereby consumer disputes are

fairly and expeditiously settled through informal dispute

settlement mechanisms.

(2) The Commission shall prescribe rules setting forth minimum

requirements for any informal dispute settlement procedure which is

incorporated into the terms of a written warranty to which any

provision of this chapter applies. Such rules shall provide for

participation in such procedure by independent or governmental

entities.

(3) One or more warrantors may establish an informal dispute

settlement procedure which meets the requirements of the

Commission’s rules under paragraph (2). If –

(A) a warrantor establishes such a procedure,

(B) such procedure, and its implementation, meets the

requirements of such rules, and

(C) he incorporates in a written warranty a requirement that

the consumer resort to such procedure before pursuing any legal

remedy under this section respecting such warranty,

then (i) the consumer may not commence a civil action (other than a

class action) under subsection (d) of this section unless he

initially resorts to such procedure; and (ii) a class of consumers

may not proceed in a class action under subsection (d) of this

section except to the extent the court determines necessary to

establish the representative capacity of the named plaintiffs,

unless the named plaintiffs (upon notifying the defendant that they

are named plaintiffs in a class action with respect to a warranty

obligation) initially resort to such procedure. In the case of such

a class action which is brought in a district court of the United

States, the representative capacity of the named plaintiffs shall

be established in the application of rule 23 of the Federal Rules

of Civil Procedure. In any civil action arising out of a warranty

obligation and relating to a matter considered in such a procedure,

any decision in such procedure shall be admissible in evidence.

(4) The Commission on its own initiative may, or upon written

complaint filed by any interested person shall, review the bona

fide operation of any dispute settlement procedure resort to which

is stated in a written warranty to be a prerequisite to pursuing a

legal remedy under this section. If the Commission finds that such

procedure or its implementation fails to comply with the

requirements of the rules under paragraph (2), the Commission may

take appropriate remedial action under any authority it may have

under this chapter or any other provision of law.

(5) Until rules under paragraph (2) take effect, this subsection

shall not affect the validity of any informal dispute settlement

procedure respecting consumer warranties, but in any action under

subsection (d) of this section, the court may invalidate any such

procedure if it finds that such procedure is unfair.

(b) Prohibited acts

It shall be a violation of section 45(a)(1) of this title for any

person to fail to comply with any requirement imposed on such

person by this chapter (or a rule thereunder) or to violate any

prohibition contained in this chapter (or a rule thereunder).

(c) Injunction proceedings by Attorney General or Commission for

deceptive warranty, noncompliance with requirements, or violating

prohibitions; procedures; definitions

(1) The district courts of the United States shall have

jurisdiction of any action brought by the Attorney General (in his

capacity as such), or by the Commission by any of its attorneys

designated by it for such purpose, to restrain (A) any warrantor

from making a deceptive warranty with respect to a consumer

product, or (B) any person from failing to comply with any

requirement imposed on such person by or pursuant to this chapter

or from violating any prohibition contained in this chapter. Upon

proper showing that, weighing the equities and considering the

Commission’s or Attorney General’s likelihood of ultimate success,

such action would be in the public interest and after notice to the

defendant, a temporary restraining order or preliminary injunction

may be granted without bond. In the case of an action brought by

the Commission, if a complaint under section 45 of this title is

not filed within such period (not exceeding 10 days) as may be

specified by the court after the issuance of the temporary

restraining order or preliminary injunction, the order or

injunction shall be dissolved by the court and be of no further

force and effect. Any suit shall be brought in the district in

which such person resides or transacts business. Whenever it

appears to the court that the ends of justice require that other

persons should be parties in the action, the court may cause them

to be summoned whether or not they reside in the district in which

the court is held, and to that end process may be served in any

district.

(2) For the purposes of this subsection, the term “deceptive

warranty” means (A) a written warranty which (i) contains an

affirmation, promise, description, or representation which is

either false or fraudulent, or which, in light of all of the

circumstances, would mislead a reasonable individual exercising due

care; or (ii) fails to contain information which is necessary in

light of all of the circumstances, to make the warranty not

misleading to a reasonable individual exercising due care; or (B) a

written warranty created by the use of such terms as “guaranty” or

“warranty”, if the terms and conditions of such warranty so limit

its scope and application as to deceive a reasonable individual.

(d) Civil action by consumer for damages, etc.; jurisdiction;

recovery of costs and expenses; cognizable claims

(1) Subject to subsections (a)(3) and (e) of this section, a

consumer who is damaged by the failure of a supplier, warrantor, or

service contractor to comply with any obligation under this

chapter, or under a written warranty, implied warranty, or service

contract, may bring suit for damages and other legal and equitable

relief –

(A) in any court of competent jurisdiction in any State or the

District of Columbia; or

(B) in an appropriate district court of the United States,

subject to paragraph (3) of this subsection.

(2) If a consumer finally prevails in any action brought under

paragraph (1) of this subsection, he may be allowed by the court to

recover as part of the judgment a sum equal to the aggregate amount

of cost and expenses (including attorneys’ fees based on actual

time expended) determined by the court to have been reasonably

incurred by the plaintiff for or in connection with the

commencement and prosecution of such action, unless the court in

its discretion shall determine that such an award of attorneys’

fees would be inappropriate.

(3) No claim shall be cognizable in a suit brought under

paragraph (1)(B) of this subsection –

(A) if the amount in controversy of any individual claim is

less than the sum or value of $25;

(B) if the amount in controversy is less than the sum or value

of $50,000 (exclusive of interests and costs) computed on the

basis of all claims to be determined in this suit; or

(C) if the action is brought as a class action, and the number

of named plaintiffs is less than one hundred.

(e) Class actions; conditions; procedures applicable

No action (other than a class action or an action respecting a

warranty to which subsection (a)(3) of this section applies) may be

brought under subsection (d) of this section for failure to comply

with any obligation under any written or implied warranty or

service contract, and a class of consumers may not proceed in a

class action under such subsection with respect to such a failure

except to the extent the court determines necessary to establish

the representative capacity of the named plaintiffs, unless the

person obligated under the warranty or service contract is afforded

a reasonable opportunity to cure such failure to comply. In the

case of such a class action (other than a class action respecting a

warranty to which subsection (a)(3) of this section applies)

brought under subsection (d) of this section for breach of any

written or implied warranty or service contract, such reasonable

opportunity will be afforded by the named plaintiffs and they shall

at that time notify the defendant that they are acting on behalf of

the class. In the case of such a class action which is brought in a

district court of the United States, the representative capacity of

the named plaintiffs shall be established in the application of

rule 23 of the Federal Rules of Civil Procedure.

(f) Warrantors subject to enforcement of remedies

For purposes of this section, only the warrantor actually making

a written affirmation of fact, promise, or undertaking shall be

deemed to have created a written warranty, and any rights arising

thereunder may be enforced under this section only against such

warrantor and no other person.

15 USC Sec. 2311

(a) Federal Trade Commission Act and Federal Seed Act

(1) Nothing contained in this chapter shall be construed to

repeal, invalidate, or supersede the Federal Trade Commission Act

[15 U.S.C. 41 et seq.] or any statute defined therein as an

Antitrust Act.

(2) Nothing in this chapter shall be construed to repeal,

invalidate, or supersede the Federal Seed Act [7 U.S.C. 1551 et

seq.] and nothing in this chapter shall apply to seed for planting.

(b) Rights, remedies, and liabilities

(1) Nothing in this chapter shall invalidate or restrict any

right or remedy of any consumer under State law or any other

Federal law.

(2) Nothing in this chapter (other than sections 2308 and

2304(a)(2) and (4) of this title) shall (A) affect the liability

of, or impose liability on, any person for personal injury, or (B)

supersede any provision of State law regarding consequential

damages for injury to the person or other injury.

(c) State warranty laws

(1) Except as provided in subsection (b) of this section and in

paragraph (2) of this subsection, a State requirement –

(A) which relates to labeling or disclosure with respect to

written warranties or performance thereunder;

(B) which is within the scope of an applicable requirement of

sections 2302, 2303, and 2304 of this title (and rules

implementing such sections), and

(C) which is not identical to a requirement of section 2302,

2303, or 2304 of this title (or a rule thereunder),

shall not be applicable to written warranties complying with such

sections (or rules thereunder).

(2) If, upon application of an appropriate State agency, the

Commission determines (pursuant to rules issued in accordance with

section 2309 of this title) that any requirement of such State

covering any transaction to which this chapter applies (A) affords

protection to consumers greater than the requirements of this

chapter and (B) does not unduly burden interstate commerce, then

such State requirement shall be applicable (notwithstanding the

provisions of paragraph (1) of this subsection) to the extent

specified in such determination for so long as the State

administers and enforces effectively any such greater requirement.

(d) Other Federal warranty laws

This chapter (other than section 2302(c) of this title) shall be

inapplicable to any written warranty the making or content of which

is otherwise governed by Federal law. If only a portion of a

written warranty is so governed by Federal law, the remaining

portion shall be subject to this chapter.

15 USC Sec. 2312

(a) Effective date of chapter

Except as provided in subsection (b) of this section, this

chapter shall take effect 6 months after January 4, 1975, but shall

not apply to consumer products manufactured prior to such date.

(b) Effective date of section 2302(a)

Section 2302(a) of this title shall take effect 6 months after

the final publication of rules respecting such section; except that

the Commission, for good cause shown, may postpone the

applicability of such sections until one year after such final

publication in order to permit any designated classes of suppliers

to bring their written warranties into compliance with rules

promulgated pursuant to this chapter.

(c) Promulgation of rules

The Commission shall promulgate rules for initial implementation

of this chapter as soon as possible after January 4, 1975, but in

no event later than one year after such date.

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