These tips are intended to educate the reader about areas of the law that make up my practice. This information may be helpful to do-it-yourselfers or may simply increase the reader’s knowledge and understanding of the legal system.
The Oregon Lemon Law ORS 646A.400 – 646A.418 covers new passenger motor vehicles that are primarily used for personal, family or household purposes. This includes self-propelled motor homes. Vehicles that are purchased primarily for business purposes and used vehicles are not covered under the Lemon Law.
A new passenger motor vehicle is a lemon if it has been out of service for thirty business days or has had four or more repair attempts on the same substantial defect. Either of these circumstances must have occurred within the first year after delivery or before 12,000 miles, whichever comes first. A substantial defect is a manufacturing defect that either causes a serious safety risk or causes the vehicle to not function. Additionally, a series of smaller defects, which when combined cause serious safety risks or cause the vehicle to not function, may also constitute a substantial defect. Consumer abuse or neglect of the vehicle voids the protection of the Lemon Law.
To make a claim under Oregon’s Lemon Law a consumer must provide written notice of each defect to the vehicle’s manufacturer as well as to the manufacturer’s agent or its authorized dealer. The written notice(s) must be sent within one year from the purchase date or before the vehicle reaches 12,000 miles. This written notice must specifically state the defects. Failing to provide this written notice is one of the major stumbling blocks for consumers attempting to use the Lemon Law.
Once the manufacturer has been notified and the consumer has shown that the vehicle is a lemon, the manufacturer may either replace the vehicle with a new vehicle of equal value or accept the return of the lemon and refund the purchase price, less a reasonable usage fee. Or, the manufacturer may instead request an “informal dispute settlement” or arbitration. The arbitration decision is binding on the manufacturer only. The consumer, by contrast, may appeal and try the case in the courts. However, the consumer must use the arbitration procedure prior to litigating in the courts. If the consumer prevails, the court may also award the consumer triple damages and have the manufacturer pay the consumer’s attorney fees. If the manufacturer prevails, however, the court may order the consumer to pay the manufacturer’s attorney fees.
An alternative to the Oregon Lemon Law is a federal law known as the Magnuson-Moss Warranty Act (MMWA), 15 U.S.C. 2301 – 2312. The MMWA covers personal property that is used for personal, family, or household purposes. The MMWA is a tool for enforcing warranties, both written and implied. It gives teeth to the warranties by providing for prevailing plaintiff attorney fees. (And, there is no risk of paying the manufacturer or dealer’s attorney fees if you lose.) The MMWA allows for the consumer to file in either state or federal court. In order to file in federal court, however, the value of the consumer product needs to be $50,000 or more.Back to Tips Page
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