California Lemon Law
Glossary

Read the definitions of common California lemon law terms. If you have repeated problems with your car, it may be time to talk to a lemon law attorney.


Arbitration

If you have read “third party dispute resolution process” anywhere in the text of the California Lemon Law, the term refers to arbitration.

It is an informal legal process in which a third party, called the “arbitrator,” decides whether the consumer’s vehicle is a defective vehicle (known as a “lemon”). Representation by an attorney is not required in arbitration, but automakers will likely have attorneys guiding them through the process.

The California Lemon Law does not require arbitration. However, the Tanner Act presumptions only apply to those who have gone through arbitration and received an unfavorable outcome.


Automotive Consumer Notification Act

Found in CA Civil Code § 1793.23, this law prevents manufacturers from selling lemon buybacks (or repurchased defective vehicles) to the public without informing consumers.

If an auto manufacturer buys back a lemon vehicle in the United States, then the automaker must ask the Department of Motor Vehicles to put “Lemon Law Buyback” on the ownership certificate. This must be done before the vehicle can be resold in California or transferred it to another state.

Essentially, automakers must inform consumers of the vehicle’s status as a “lemon law buyback” before selling it.


Cash Compensation

If the problems in your vehicle are not substantial enough for it to be considered a “lemon,” you may still receive some cash compensation in exchange for a dismissal of the lawsuit. In this case, you may not get as much money as you would have for a full vehicle refund, and the manufacturer will not take back the vehicle.


Certified Pre-Owned

A certified pre-owned vehicle is a used vehicle that has undergone a thorough inspection from the auto manufacturer before being resold. Typically, these vehicles are not very old, have relatively low mileage, and come with additional warranties.


Civil Penalty

If a manufacturer has been proven to have willfully made and sold a defective vehicle, the manufacturer may have to pay a civil penalty. This penalty can be up to twice the amount of “actual damages,” which is the amount paid to the consumer.

Actual damages include the monies paid towards the cash price of the vehicle, including incidental and consequential damages, less the mileage offset.


Consequential Damages

Determined by costs incurred directly due to the defect (for example, repairs for faulty parts), consequential damages are part of the actual damages paid to a consumer.


Contingency Basis

If an attorney provides a service on a “contingency basis,” it means that you pay no out-of-pocket costs to be represented. The attorney only gets paid if you get paid. If you win, the manufacturer has to pay the attorney’s fees and costs. If you lose, the attorney does not get paid for your case.


Defect

In the context of the California Lemon Law, a defect refers to a “nonconformity” that substantially impairs the use, value or safety of the vehicle. If a vehicle does not “conform to warranty,” it means it does not have the functionality guaranteed by that warranty.


Lease

Under the California Lemon Law, a lease means a contract for lease or bailment of a consumer good for personal, family or household use. The lease must last longer than four months.


Lessee

If you sign a contract to lease a vehicle or some other consumer good, you are considered a “lessee.” Like owners, lessees of vehicles with considerable defects are entitled to certain rewards under the California Lemon Law.


Lemon Laws

Lemon laws are a collection of federal and state consumer protection laws that allow owners of defective vehicles some recourse against auto manufacturers. The federal lemon law exists to ensure basic protections to consumers and enforce state lemon laws (all of which differ in what they provide consumers).

Some state lemon laws are stronger than others, with different time limits and conditions that consumers must fit to seek recourse for defective vehicles, which are called “lemons.”


Lemon Law Buyback

A lemon law buyback is a vehicle that was repurchased by the auto manufacturer because it was found to be a lemon.

If your vehicle is found to be a lemon, and you are offered a “lemon law buyback” or “vehicle repurchase,” this means you are being offered a refund on your vehicle, minus a portion called a “mileage offset.”

If a vehicle being sold at a dealership has the label “Lemon Law Buyback,” that means the auto manufacturer repurchased it after it was found to be defective.


Magnuson-Moss Warranty Act

The Magnuson-Moss Warranty Act is a federal lemon law that defines implied warranty and sets standards for what written or express warranties must provide. It was drafted to prevent auto manufacturers from writing confusing and misleading warranties.

This federal lemon law sets the minimum standard for consumer protection across the country. State lemon laws bolster those protections for consumers with defective vehicles, but each state lemon law is different.


Member of Armed Forces

Under the Song Beverly Consumer Warranty Act, this is a person on full time active duty in the Army, Navy, Marine Corps, Air Force, National Guard, or Coast Guard, or a person doing active military service at a military service school designated by law or the Adjutant General of the Military Department. (CA Civil Code § 1971.t)

Members of Armed Forces are entitled to special protections under the California Lemon Law. For example, such members stationed in California can pursue lemon law cases for vehicles bought elsewhere in the United States, and members who bought or leased vehicles in California can file cases even if stationed elsewhere in the U.S.


Mileage Offset / Mileage Deduction

When a consumer wins a lemon law case and receives a refund for the vehicle, a portion is deducted from that refund before the consumer receives it. That portion is called a “mileage offset.”

The number of “good miles” the consumer got out of the vehicle before the defect appeared determines the amount taken off the refund owed to the consumer. The higher number of “good miles” you had, the less the automaker has to pay you.


Monroney Sticker

The Monroney sticker is also known as the window sticker.

Named after Senator Mike Monroney (D-Oklahoma), the Monroney sticker is a window label required by federal law to be displayed on new vehicles sold to the public. The Monroney sticker includes the manufacturer’s suggested retail price (MSRP), equipment specifications, warranty information, optional add-ons, fuel economy ratings and crash test ratings.


Motor Vehicle

The types of vehicles listed as “motor vehicles” protected under the California Lemon Law vary on a case-by-case basis. However, here is a summary of the vehicles that, as long as they were sold with applicable warranties, benefit from lemon law protections.

– A motor vehicle used primarily for personal, household or family use.

– A motor vehicle that is used for business, has a curb weight under 10,000 pounds and is among the maximum of five vehicles registered to the business in California.

Typically, vehicles include cars, trucks, vans and SUVs, but it can also include the chassis, chassis cab and portion of a motor home dedicated to propulsion. It also includes dealer-owned vehicles or “demonstrators”, as long as they were sold with warranties.


Presumption

In the context of a court case, a presumption is a fact assumed true by the court until there is evidence proving that the fact is false.

If you are filing a lemon law case, and your situation is among those outlined in the Tanner Consumer Protection Act, “this vehicle is a lemon” is assumed to be true by the court until the manufacturer proves it false.


Reasonable Number of Repair Attempts

Though this is a precondition to a vehicle being considered “defective” under the California Lemon Law, the number considered “reasonable” depends on the circumstances of the case. In many cases, it can be fewer attempts than the threshold required for lemon law “presumption.”


Replacement Vehicle

If a consumer’s vehicle is found to be a lemon, a manufacturer may have to offer a replacement vehicle, if that is the consumer’s preference.

The California Lemon Law requires that the replacement vehicle be “substantially identical” to the vehicle being replaced (minus the defect). This typically means that the vehicle should be the same make and model as the original. The replacement vehicle should also have the same implied and express warranties that the original vehicle had.

The manufacturer has to pay fees associated with a vehicle purchase, such as registration, sales tax and license fees, and pay the consumer incidental damages. Consumers do not have to accept a replacement vehicle if they prefer to receive money back instead.


Settlement

A settlement can come after winning a lemon law case in court, during which the money owed to you is determined. Alternatively, if your vehicle has repeated problems but is not considered defective, a cash settlement may result in the manufacturer giving you some cash compensation in exchange for dismissal of the lawsuit.


Statute of Limitations

Found in California Code of Civil Procedure 337, the statute of limitations refers to a time limit in which you can file a case. The statute of limitations for filing a case under the California Lemon Law is four years after you first discover the defect in your vehicle.


Song-Beverly Consumer Warranty Act

Found in CA Civil Code § 1790-1795.8 and commonly known as the California Lemon Law, this protects all consumer goods that come with an implied warranty, an express warranty, or both. Though it protects all consumer goods, it’s mostly known for its protection of consumers who bought or leased defective motor vehicles.

However, those motor vehicles have to have come with a warranty.

Protected motor vehicles have to have been bought or leased by a California resident from an authorized dealership in California. For the most part, these vehicles have to be for personal, family or household use. However, vehicles used for business may also qualify if their curb weight is less than 10,000 pounds and they are registered to a business with no more than five vehicles registered in California. Members of the military may also benefit from the California lemon law if they 1) bought or leased a vehicle in California before being stationed elsewhere, or 2) bought or leased a vehicle elsewhere in the United States before being stationed in California.


Tanner Consumer Protection Act

Found in CA Civ. Code, § 1793.22, this part of the California Lemon Law lists situations in which the burden of proof shifts onto the auto manufacturer in a lemon law case.

In a typical case, it is on the vehicle owner and their lemon law attorneys to prove that the vehicle is, in fact, defective. However, if your vehicle fits these qualifications, the manufacturer has to prove that your vehicle is not defective.

The presumptions kick in if it fit one of the following conditions before 18 months or 18,000 miles, whichever deadline comes first:

– If your vehicle has a potentially deadly defect, and a dealership or authorized repair facility tried to repair the vehicle at least twice.

– If your vehicle has a defect that negatively affects its use, safety or value, and a dealership or authorized repair facility tried to repair the vehicle at least four times.

– If your vehicle was in the repair shop for the defect for more than a cumulative total of 30 days.

In addition, you have to have gone through arbitration and received an unfavorable outcome.


Warranty

A warranty is a guarantee from the seller of a good that the consumer good is fit for the purpose in which it’s used, and if the consumer good fails in some way, the seller can repair the good so that it “conforms to warranty.” An implied warranty is an unwritten guarantee. An express warranty is a written statement of this guarantee.

To benefit from the protections of the California Lemon Law, the vehicle’s warranty must be from the auto manufacturer. “extended warranties” (which are “service contracts” rather than true warranties) sold by dealerships or other third parties will not ensure that your vehicle has lemon law protections.

Express Warranty

An express warranty is a written statement that describes the manufacturer’s obligation to make the consumer good conform to warranty.

In the context of a motor vehicle purchase, an express warranty will describe the types of repairs that a manufacturer will offer free of charge so that a new vehicle works as intended. The express warranty will also state any time or mileage limits that the manufacturer places on these repairs.

Extended Warranty

An extended warranty is a service contract that provides coverage to some vehicle parts after the previous warranty period expires. While it may be advertised as a “warranty,” this service contract is not considered a warranty under state or federal lemon laws.

Implied Warranty

Unless a consumer good is labeled “as is” or “with all faults,” a consumer good will be sold with an “implied warranty,” or an unwritten guarantee that a consumer good should work for its intended purpose.

Implied Warranty of Merchantability

The California Lemon Law defines “implied warranty of merchantability” as an assurance that consumer goods 1) pass without objection in the trade under the contract description; 2) are fit for the ordinary purposes for which such goods are used; 3) are adequately contained, packaged, and labeled and 4) conform to the promises or affirmations of fact made on the container or label.

In the context of motor vehicles, this means that the vehicles can provide safe, reliable transportation.

Implied Warranty of Fitness

The California Lemon Law states that “that when the retailer, distributor, or manufacturer has reason to know any particular purpose for which the consumer goods are required, and further, that the buyer is relying on the skill and judgment of the seller to select and furnish suitable goods, then there is an implied warranty that the goods shall be fit for such purpose.”

Essentially, implied warranty of fitness is an unwritten expectation that the consumer good should be fit to be used as intended.