51-07-16. Definitions. As used in sections 51-07-16 through 51-07-22, and unless the context otherwise requires:
1. “Consumer” means the purchaser or lessee, other than for purposes of resale or lease, of a passenger motor vehicle normally used for personal, family, or household purposes. The term includes any person to whom the passenger motor vehicle is transferred for the same purposes during the duration of an express warranty applicable to that passenger motor vehicle, and any other person entitled by the terms of the warranty to enforce the obligations of the warranty.
2. “Passenger motor vehicle” means a passenger motor vehicle as defined in section 39-01-01 or a truck with registered gross weight of ten thousand pounds [4536 kilograms] or less which is sold or leased in this state. The term does not include a house car, as defined in section 39-01-01. 51-07-17. Duty of manufacturer to repair defective passenger motor vehicles. If a new passenger motor vehicle does not conform to all applicable express warranties, and the consumer reports the nonconformity to the manufacturer, its agent, or its authorized dealer during the term of the express warranties or during the period of one year following the date of original delivery of the passenger motor vehicle to a consumer, whichever is the earlier date, the manufacturer, its agent, or its authorized dealer shall make the repairs necessary to conform the passenger motor vehicle to the express warranties, notwithstanding the fact that the repairs might be made after the expiration of the warranty or one-year period.
51-07-18. Duty to replace defective passenger motor vehicle or refund price -Prerequisite of using available informal dispute settlement process.
1. If the manufacturer, its agent, or its authorized dealer is unable to make the passenger motor vehicle conform to any applicable express warranty by repairing or correcting any defect or condition that substantially impairs the use and market value of the passenger motor vehicle, after a reasonable number of attempts, the manufacturer shall replace that passenger motor vehicle with a comparable passenger motor vehicle or accept return of the passenger motor vehicle from the consumer, and refund to the consumer the full purchase price, including all collateral charges, less a reasonable allowance for the consumer’s use of the vehicle not exceeding ten cents per mile [1.61 kilometers] driven or ten percent of the purchase price, whichever is less. Refunds must be made to the consumer, the lessor, and the lienholder, if any, as their interests may appear. A reasonable allowance for use is the amount directly attributable to use by the consumer before the consumer’s first report of the nonconformity to the manufacturer, agent, or dealer, and during any subsequent period when the vehicle is not out of service for repair.
2. It is an affirmative defense to any claim under sections 51-07-16 through 51-07-22:
- a. That an alleged nonconformity does not substantially impair the use and market value of the passenger motor vehicle; or
- b. That a nonconformity is the result of abuse, neglect, or unauthorized modifications or alterations of the passenger motor vehicle by a consumer.
3. If a manufacturer has established or participates in an informal dispute settlement procedure that substantially complies with the substantive rules of the federal trade commission, 16 CFR 703, or if the manufacturer participates in a consumer and industry appeals, arbitration, or mediation appeals board whose decisions are binding on the manufacturer, the remedy under subsection 1 is not available to a consumer who has not first resorted to that procedure. If the consumer requests an oral presentation before the board or dispute settlement mechanism, the hearing must take place in the state in which the consumer resides. The attorney general shall, on application, issue a determination of whether an informal dispute resolution mechanism qualifies under this subsection.
51-07-18.1. Refunds for leased passenger motor vehicles. In any case in which a refund is tendered by a manufacturer for a leased motor vehicle under section 51-07-18, the refund and rights of the motor vehicle lessor, lessee, and manufacturer are as follows:
1. The manufacturer shall provide to the lessee the sum of all payments previously paid to the motor vehicle lessor by the lessee less a reasonable allowance for the consumer’s use of the vehicle. Payments include all cash payments, security deposits, and trade-in allowance, if any, tendered by the lessee to the motor vehicle lessor under the lease agreement.
2. The manufacturer shall provide to the motor vehicle lessor the sum of the following:
- a. The lessor’s actual purchase cost, less payments made by the lessee;
- b. The freight cost, if applicable;
- c. The cost for dealer or manufacturer installed accessories, if applicable; and
- d. An amount equal to five percent of the lessor’s actual purchase cost as provided in subdivision a. The amount in this subdivision is in lieu of any early termination costs or penalties described in the lease agreement.
3. Upon return of the passenger motor vehicle, the consumer’s lease agreement with the lessor is terminated and no penalty for early termination may be assessed.
4. Any refund to be paid to the motor vehicle lessor must be made to the lessor and lienholder, if any, as their interests may appear.
1. It is presumed that a reasonable number of attempts have been undertaken to make a passenger motor vehicle conform to the applicable express warranties, if:
- a. The same nonconformity has continued to exist, despite having been subject to repair more than three times by the manufacturer, its agent, or its authorized dealer, within the express warranty term or within one year of the date of original delivery of the passenger motor vehicle to a consumer, whichever is the earlier date.
- b. The passenger motor vehicle is out of service for repair for a cumulative total of at least thirty business days during the warranty term or in a year, whichever is less.
2. The term of an express warranty, the one-year period, and the thirty-day period, are extended by any period during which repair services are not available to the consumer because of war, invasion, strike, fire, flood, or other natural disaster.
3. The presumption does not apply against a manufacturer unless the manufacturer has received prior direct notification from or on behalf of the consumer and an opportunity to cure the alleged defect.
51-07-20. Exclusive remedy.
A consumer who elects to proceed under sections 51-07-16 through 51-07-22 is foreclosed from pursuing any other remedy arising out of the facts and circumstances which gave rise to the claim under sections 51-07-16 through 51-07-22. 51-07-21. Limitation of actions. An action brought under sections 51-07-16 through 51-07-22 must be commenced within six months after the earlier of: 1. Expiration of the express warranty term; or 2. Eighteen months after the date of original delivery of the passenger motor vehicle to a consumer.
51-07-22. Resale of returned passenger motor vehicles – Penalty.
1. A person may not sell or lease in this state a passenger motor vehicle that was returned to the manufacturer in accordance with sections 51-07-16 through 51-07-22, unless the manufacturer provides:
- a. The same express warranty it provided to the original purchaser, except the term of the warranty must be for at least twelve thousand miles or twelve months after the date of resale, whichever is earlier; and
- b. The purchaser a statement on a separate document that must be signed by the manufacturer and the purchaser and must be in ten point, capitalized type, in substantially the following form: “IMPORTANT: THIS VEHICLE WAS RETURNED TO THE MANUFACTURER BECAUSE DEFECTS COVERED BY THE MANUFACTURER’S EXPRESSED WARRANTY WERE NOT REPAIRED WITHIN A REASONABLE TIME AS PROVIDED BY NORTH DAKOTA LAW”.
2. A person may not ship or deliver for resale or lease in another state a passenger motor vehicle returned to the manufacturer in accordance with sections 51-07-16 through 51-07-22 unless full disclosure of the reasons for return is made to any prospective buyer.
3. Violation of this section is a class B misdemeanor.
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 purchased goods.
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 are non-conforming.
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 the defect.
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 remedied.
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