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.

North Dakota Lemon Law 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.

North Dakota Lemon Law 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. At is an affirmative defense to any claim under sections 51-07-16 through 51-07-22:
    1. That an alleged nonconformity does not substantially impair the use and market value of the passenger motor vehicle; or
    2. 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.
North Dakota Lemon Law 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:


    1. The lessor’s actual purchase cost, less payments made by the lessee;
    2. The freight cost, if applicable;
    3. The cost for dealer or manufacturer installed accessories, if applicable; and
    4. 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.
North Dakota Lemon Law 51-07-19. Presumptions.
  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:

    1. 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.
    2. 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.
North Dakota Lemon Law 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.
North Dakota Lemon Law 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.
North Dakota Lemon Law 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:

    1. 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
    2. 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
  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
  3. Violation of this section is a class B misdemeanor.

The Magnuson-Moss Warranty Act

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.

Your car is a major investment, rationalized by the peace of mind that flows from its expected dependability and safety.
Accordingly, you are entitled to expect an automobile properly constructed and regulated to provide reasonably safe, trouble-free,
and dependable transportation – regardless of the exact make and model you bought. Unfortunately, sometimes these principles
do not hold true and defects arise in automobiles. Although one defect is not actionable, repeated defects are as there
exists a generally accepted rule that unsuccessful repair efforts render the warrantor liable. Simply put, there comes
a time when “enough is enough” – when after having to take your car into the shop for repairs an inordinate number of times
and experiencing all of the attendant inconvenience, you are entitled to say, ‘That’s all,’ and revoke, notwithstanding
the seller’s repeated good faith efforts to fix the car. The rationale behind these basic principles is clear: once your
faith in the vehicle is shaken, the vehicle loses its real value to you and becomes an instrument whose integrity is impaired
and whose operation is fraught with apprehension. The question thus becomes when is “enough”?

As you know, enough is never enough from your warrantor’s point of view and you should simply continue to have your defective
vehicle repaired – time and time again. However, you are not required to allow a warrantor to tinker with your vehicle
indefinitely in the hope that it may eventually be fixed. Rather, you are entitled to expect your vehicle to be repaired
within a reasonable opportunity. To this end, both the federal Moss Warranty Act, and the various state “lemon laws,” require
repairs to your vehicle be performed within a reasonable opportunity.

Under the Magnuson-Moss Warranty Act, a warrantor should perform adequate repairs in at least two, and possibly three, attempts
to correct a particular defect. Further, the Magnuson-Moss Warranty Act’s reasonableness requirement applies to your vehicle
as a whole rather than to each individual defect that arises. Although most of the Lemon Laws vary from state to state,
each individual law usually require a warrantor to cure a specific defect within four to five attempts or the automobile
as a whole within thirty days. If the warrantor fails to meet this obligation, most of the lemon laws provide for a full
refund or new replacement vehicle. Further, this reasonable number of attempts/reasonable opportunity standard, whether
it be that of the Magnuson-Moss Warranty Act or that of the Lemon Laws, is akin to strict liability – once this threshold
has been met, the continued existence of a defect is irrelevant and you are still entitled to relief.

One of the most important parts of the Magnuson-Moss Warranty Act is its fee shifting provision. This provision provides
that you may recover the attorney fees incurred in the prosecution of your case if you are successful – independent of
how much you actually win. That rational behind this fee shifting provision is to twofold: (1) to ensure you will be able
to vindicate your rights without having to expend large sums on attorney’s fees and (2) because automobile manufacturers
are able to write off all expenses of defense as a legitimate business expense, whereas you, the average consumer, obviously
does not have that kind of economic staying power. Most of the Lemon Laws contain similar fee shifting provisions.

You may also derive additional warranty rights from the Uniform Commercial Code; however, the Code does not allow you in
most states to recover your attorney fees and is also not as consumer friendly as the Magnuson-Moss Warranty Act or the
various state lemon laws.

The narrative information on Magnuson-Moss, UCC and North Carolina lemon laws on these pages is provided by Marshall Meyers,

Uniform Commercial Code Summary

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 Section2-601 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 then 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 to inspect 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.

The following is an example of a case of rejection: Mr. Zabriskie purchase a new 1966 Chevrolet Biscayne. After picking
up the car on Friday evening, while en route to his home 2.5 miles away, and within 7/10ths of a mile from the dealership,
the car stalled and stalled again within 15 feet. Thereafter, the car would only drive in low gear. The buyer rejected
the vehicle and stopped payment on his check. The dealer contended that the buyer could not reject the car because he had
driven it around the block and that was his reasonable opportunity to inspect. The New Jersey Court said;

To the layman, the complicated mechanisms of today’s automobile are a complete mystery. To have the automobile inspected
by someone with sufficient expertise to disassemble the vehicle in order the discover latent defects before the contract
is signed, is assuredly impossible and highly impractical. Consequently, the first few miles of driving become even more
significant to the excited new car buyer. This is the buyer’s first reasonable opportunity to enjoy his new vehicle to
see if it conforms to what it was represented to be and whether he is getting what he bargained for. How long the buyer
may drive the new car under the guise of inspection of new goods is not an issue in the present case because 7/10th of
a mile is clearly within the ambit of a reasonable opportunity to inspect. Zabriskie Chevrolet, Inc. v. Smith, 240 A.
2d 195(1968)

It is suggested that Courts will tend to excuse use by consumers if possible.

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 nonconformity 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 always is assured that any noncomformities he does discover
will be remedied.

What is a noncomformity substantially impairing the value of the vehicle?

  1. A noncomformity may include a number of relatively minor defects whose cumulative total adds up to a substantial impairment.
    This is the “Shake Faith” Doctrine first stated in the Zabrisikie case. “For a majority of people the purchase of a new
    car is a major investment, rationalized by the peace of mind that flows from its dependability and safety. Once their
    faith is shaken, the vehicle loses not only its real value in their eyes, but becomes an instrument whose integrity is
    substantially impaired and whose operation is fraught with apprehension”.
  2. A substantial noncomformity may include a failure or refusal to repair the goods under the warranty. In Durfee V. Rod Baxter
    Imports, the Minnesota Court held that the Saab owner that was plagued by a series of of annoying minor defects and stalling,
    which were never repaired after a number of attempts, could revoke, “if repairs are not successfully undertaken within
    a reasonable time”, the consumer may elect to revoke.
  3. Substantial Non Conformity and Lemon Laws often define what may be considered a substantial impairment. These definitions
    have been successfully used to flesh out the substantial impairment in the UCC.

Additional narrative information on Magnusson-Moss, UCC and North Carolina lemon laws on these pages is provided by T.
Michael Flinn, attorney.

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