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 lemon laws on these pages is provided by T. Michael Flinn, attorney.

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 lemon laws on these pages is provided by Marshall Meyers, attorney.

Wisconsin Lemon Law Statutes

Chapter 218.015

1. 218.015(1) (intro.) In this section:
   
   
   1. 218.015(1)(a) "Collateral costs" means expenses incurred by a consumer in connection with the repair of a nonconformity, including the costs of obtaining alternative transportation.
      
      
   2. 218.015(1)(b) (intro.) "Consumer" means any of the following:
      
      
      1. 218.015(1)(b)1. The purchaser of a new motor vehicle, if the motor vehicle was purchased from a motor vehicle dealer for purposes other than resale.
         
         
      2. 218.015(1)(b)2. A person to whom the motor vehicle is transferred for purposes other than resale, if the transfer occurs before the expiration of an express warranty applicable to the motor vehicle.
         
         
      3. 218.015(1)(b)3. A person who may enforce the warranty.
         
         
      4. 218.015(1)(b)4. A person who leases a motor vehicle from a motor vehicle lessor under a written lease.
      
      218.015(1)(bd) (bd) "Demonstrator" means used primarily for the purpose of demonstration to the public.
      
      218.015(1)(bg) (bg) "Early termination cost" means any expense or obligation a motor vehicle lessor incurs as a result of both the termination of a written lease before the termination date set forth in that lease and the return of a motor vehicle to a manufacturer under sub. (2) (b) 3. "Early termination cost" includes a penalty for prepayment under a finance arrangement.
      
      218.015(1)(bj) (bj) "Early termination savings" means any expense or obligation a motor vehicle lessor avoids as a result of both the termination of a written lease before the termination date set forth in that lease and the return of a motor vehicle to a manufacturer under sub. (2) (b) 3. "Early termination savings" includes an interest charge the motor vehicle lessor would have paid to finance the motor vehicle or, if the motor vehicle lessor does not finance the motor vehicle, the difference between the total amount for which the lease obligates the consumer during the period of the lease term remaining after the early termination and the present value of that amount at the date of the early termination.
      
      218.015(1)(bp) (bp) "Executive" means used primarily by an executive of a licensed manufacturer, distributor or dealer, and not used for demonstration to the public.
      
      
   3. 218.015(1)(c)"Manufacturer" means a manufacturer as defined in s. 218.01 (1) (L) and agents of the manufacturer, including an importer, a distributor, factory branch, distributor branch and any warrantors of the manufacturer's motor vehicles, but not including a motor vehicle dealer.
      
      
   4. 218.015(1)(d) "Motor vehicle" means any motor driven vehicle required to be registered under ch. 341 or exempt from registration under s. 341.05 (2), including a demonstrator or executive vehicle not titled or titled by a manufacturer or a motor vehicle dealer, which a consumer purchases or accepts transfer of in this state. "Motor vehicle" does not mean a moped, semitrailer or trailer designed for use in combination with a truck or truck tractor.
      
      
   5. 218.015(1)(e) "Motor vehicle dealer" has the meaning given under s. 218.01 (1) (n).
      
      218.015(1)(em) (em) "Motor vehicle lessor" means a person who holds title to a motor vehicle leased to a lessee, or who holds the lessor's rights, under a written lease.
      
      
   6. 218.015(1)(f) "Nonconformity" means a condition or defect which substantially impairs the use, value or safety of a motor vehicle, and is covered by an express warranty applicable to the motor vehicle or to a component of the motor vehicle, but does not include a condition or defect which is the result of abuse, neglect or unauthorized modification or alteration of the motor vehicle by a consumer.
      
      
   8. 218.015(1)(h) (intro.) "Reasonable attempt to repair" means any of the following occurring within the term of an express warranty applicable to a new motor vehicle or within one year after first delivery of the motor vehicle to a consumer, whichever is sooner:
      
      
      1. 218.015(1)(h)1. The same nonconformity with the warranty is subject to repair by the manufacturer, motor vehicle lessor or any of the manufacturer's authorized motor vehicle dealers at least 4 times and the nonconformity continues.
         
         
      2. 218.015(1)(h)2. The motor vehicle is out of service for an aggregate of at least 30 days because of warranty nonconformities.
   
   
   
2. 218.015(2)
   
   
   1. 218.015(2)(a) If a new motor vehicle does not conform to an applicable express warranty and the consumer reports the nonconformity to the manufacturer, the motor vehicle lessor or any of the manufacturer's authorized motor vehicle dealers and makes the motor vehicle available for repair before the expiration of the warranty or one year after first delivery of the motor vehicle to a consumer, whichever is sooner, the nonconformity shall be repaired.
      
      
   2. 218.015(2)(b)
      
      
      1. 218.015(2)(b)1. If after a reasonable attempt to repair the nonconformity is not repaired, the manufacturer shall carry out the requirement under subd. 2. or 3., whichever is appropriate.
         
         
      2. 218.015(2)(b)2. (intro.) At the direction of a consumer described under sub. (1) (b) 1., 2. or 3., do one of the following:
         
         
         1. 218.015(2)(b)2.a. Accept return of the motor vehicle and replace the motor vehicle with a comparable new motor vehicle and refund any collateral costs.
            
            
         2. 218.015(2)(b)2.b. Accept return of the motor vehicle and refund to the consumer and to any holder of a perfected security interest in the consumer's motor vehicle, as their interest may appear, the full purchase price plus any sales tax, finance charge, amount paid by the consumer at the point of sale and collateral costs, less a reasonable allowance for use. Under this subdivision, a reasonable allowance for use may not exceed the amount obtained by multiplying the full purchase price of the motor vehicle by a fraction, the denominator of which is 100,000 or, for a motorcycle, 20,000, and the numerator of which is the number of miles the motor vehicle was driven before the consumer first reported the nonconformity to the motor vehicle dealer.
         
         
         
      3. 218.015(2)(b)3.
         
         
         1. 218.015(2)(b)3.a. With respect to a consumer described in sub. (1) (b) 4., accept return of the motor vehicle, refund to the motor vehicle lessor and to any holder of a perfected security interest in the motor vehicle, as their interest may appear, the current value of the written lease and refund to the consumer the amount the consumer paid under the written lease plus any sales tax and collateral costs, less a reasonable allowance for use.
            
            
         2. 218.015(2)(b)3.b. Under this subdivision, the current value of the written lease equals the total amount for which that lease obligates the consumer during the period of the lease remaining after its early termination, plus the motor vehicle dealer's early termination costs and the value of the motor vehicle at the lease expiration date if the lease sets forth that value, less the motor vehicle lessor's early termination savings.

Wisconsin Attorneys

Name : Antikainen, Michael
Email Address : mantikainen@consumerlawcenter.com
Licensed to Practice in : Illinois, Wisconsin
View/Hide Attorney Description Mr. Antikainen joined Krohn & Moss, Ltd., in September of 2005, concentrating his practice in the areas of consumer protection and breach of warranty litigation, handling consumer complaints throughout Wisconsin and Illinois. At Krohn & Moss, Ltd., Mr. Antikainen is responsible for all aspects of litigation including, but not limited to, the arbitration, mediation and/or trial of cases. Mr. Antikainen earned his undergraduate degree from the University of Minnesota at Duluth and then went on to earn his Juris Doctor Degree from Marquette University Law School in May of 2005. While in law school, he was Survey Editor for the Marquette Sports Law Review. Mr. Antikainen was admitted to the Wisconsin Bar in May 2005 and to the Illinois Bar in November 2005.

Name : Moss, Gregory H.
Email Address : gmoss@consumerlawcenter.com
Licensed to Practice in : Illinois, Wisconsin
View/Hide Attorney Description Gregory H. Moss is a founding partner of Krohn & Moss, Ltd. Mr. Moss is a graduate of the University of Wisconsin-Madison, with a Bachelor of Arts degree in Political Science and holds a Juris Doctor Degree from the John Marshall Law School in Chicago, Illinois. Mr. Moss is a member of the Illinois State Bar Association, The Chicago Bar Association, the American Bar Association, the Federal Trial Bar and has been admitted to practice before the United State Court of Appeals-Seventh Circuit. Mr. Moss has is licensed in Wisconsin as well as Illinois and has handled thousands of warranty law cases. He has successfully litigated jury trials for numerous consumers, at both the State and Federal Court level. He is devoted to protecting consumer's rights.

Manufacturer Arbitration Programs

Arbitration is an informal way to resolve your complaint without going to court. Arbitrators - often volunteers from the community - decide your case based on information you and the manufacturer provide. If your manufacturer has an arbitration program certified by WisDOT, you must use it before suing under the Lemon Law. If it is not certified, you do not have to use it. In either case, arbitration is free, you don't need a lawyer, and you don't have to accept a decision you don't like. Please call the toll-free number for the program's current procedures.

Certified by the State of Wisconsin:

BBB Auto Line
Better Business Bureau Auto Line
4200 Wilson Blvd.
Arlington, VA 22203-1838
(800) 955-5100

(Certified for: Audi, General Motors, Hyundai, Isuzu, Kia, Saturn, Volkswagen)
(Non-certified for: Acura, AM General, Geo, Honda, Infiniti, Lexus, Nissan, Subaru, Ford, Lincoln, Mercury, Merkur)

National Center for Dispute Settlement
2777 Stemmons Freeway, Ste 1452
Dallas, TX 75207
(866) 767-7244

(Certified for: Porsche)
(Non-certified for: Toyota, Mitsubishi)

Consumer Arbitration Program for Recreation Vehicles (CAP-RV)
DeMars & Associates Ltd.
P.O. Box 1424
Waukesha, WI 53187-1424
(800) 279-5343

(Certified for: Coachmen)

If you have questions:

• E-mail: dealers.dmv@dot.state.wi.us
• Call: (608) 266-1425
• FAX: (608) 267-0323
• Write to the address below:

Wisconsin Department of Transportation
Dealer & Agent Section
4802 Sheboygan Avenue, Room 201
P.O. Box 7909
Madison, WI 53707-7909

What should a lemon owner do?

• Get a repair order for every repair visit, even if the shop doesn't diagnose the problem or attempt a repair. A repair order should show the problem you report, and the dates your car is in the shop.
• Keep purchase contracts, warranties, and repair orders to prove you have a lemon. Don't keep repair orders in your car where they may get lost.
• We strongly urge you to use the Wisconsin Department of Transportation's (WisDOT) Motor Vehicle Lemon Law Notice form to ask the manufacturer for a refund or replacement vehicle. The Lemon Law Notice includes important language required under the lemon law. Send the form to the manufacturer at the address in your owners manual. The manufacturer has 30 days to respond. Your refund should include the full purchase price, sales tax, any finance charge, and collateral costs (for example, repairs, towing, alternative transportation), minus the mileage deduction allowed by law. If you get a replacement vehicle, the manufacturer should refund your collateral costs and charge nothing for mileage.
• If you return to the manufacturer a vehicle that has missing equipment or unrepaired damage beyond normal wear and tear, a manufacturer may want to negotiate a damage deduction. You should not be responsible for paying for normal wear and tear, such as minor dents, scratches, pitted glass, soiled carpets, minor stains or tears. Feel free to have the damage appraised at a location you choose, or to have it repaired rather than paying a deduction.
• If you don't get a refund or replacement by writing the manufacturer, consider using your manufacturer's arbitration program. If your manufacturer has a program certified by WisDOT, you must use it before you can sue under the Lemon Law. If your manufacturer's program is not certified, you do not have to use it. However, if you do use it, you might get a decision you like. You can reject any decision you don't like. See the list of arbitration programs listed below.
• Talk to an attorney if the manufacturer doesn't help you. A court may need to decide if your vehicle is a lemon and what settlement you deserve. If you sue the manufacturer and win, you could get double the vehicle purchase price, plus other costs and attorney fees. To find an attorney who handles Lemon Law cases, contact the State Bar of Wisconsin Attorney Referral Service toll-free at (800) 362-9082, or at (608) 257-4666 or WisBar Lawyer Referral and Information Service.

Who can you call for help?

WisDOT's Dealer & Agent Section licenses and regulates dealers and manufacturers and helps resolve disputes about vehicle sales and warranties. Contact the Dealer & Agent Section if you have a complaint against a dealer or manufacturer.

The Dealer & Agent Section won't resolve your Lemon Law complaint for you, but it will give you more information about exercising your rights under the Lemon Law.

U.S. DOT auto safety hotline

If you own a car or truck that you feel has a safety defect you should report the problem to the Hotline at the National Highway Traffic Safety Administration (NHTSA) of the U.S. Department of Transportation (DOT).

The U.S. DOT Auto Safety Hotline specializes in gathering information about safety problems in motor vehicles and equipment and is your chance to help identify these problems which sometimes lead to recalls. The Hotline can be dialed toll free at (888) DASH-2-DOT or (888) 327-4236 or you can now file your vehicle safety defect report online.

Need a speaker?

WisDOT's Dealer & Agent Section (608) 266-1425 or dealers.dmv@dot.state.wi.us has speakers for your class or meeting. It's free! Please give us four weeks' notice.

Topics include:

• The lemon law
• Wise car buying

Wisconsin's lemon law

If the motor vehicle you buy or lease turns out to be a "lemon," the manufacturer has to replace it free or refund the price (minus a reasonable amount for mileage).

What is a "lemon"?

A new vehicle - no more than a year old and still under warranty - is a "lemon" if

• It has a serious defect the dealer can't fix in four tries, or
• It has one or many defects that prevent you from using it for 30 days or more (the 30 days need not be consecutive)

What is a defect?

A defect covered by the Lemon Law must seriously affect the use, value or safety of your vehicle and must be covered by the warranty. An irritating rattle may not be "serious" enough to make your car a lemon. Stalling probably is.

What vehicles are covered?

The law covers any new car, truck, motorcycle or motor home you buy or lease, even if you register the vehicle in another state. It also covers a demonstrator or executive vehicle.

How long are you covered?

The lemon law includes no deadline for filing a lemon law suit; a court would decide if your case were too old.

Is your vehicle a lemon?

Your vehicle is a lemon if all of the following statements are true:

• You bought or leased a new vehicle.
• The vehicle is a car, truck, motorcycle or motor home.
• The vehicle developed a defect or defects during its first year and before the warranty expired.
• The defect seriously harms the vehicle's use, value or safety.
• One of the following happened during the vehicle's first year and before the warranty expired:
  • The dealer failed four times to fix the same defect; OR
  • The vehicle was out of service for 30 days or more due to defects

Introducing Of Lemon Law

Lemon laws are U.S. state laws that offer remedies to consumers for products such as boats, cars, computers, motorcycles, refrigerators, RVs, etc. That frequently fail to meet the set standards of quality and performance. These products are commonly referred to as “lemons”. There are both state and federal lemon laws that protect the interests of consumers. The rights afforded to consumers by lemon laws may exceed any warranties expressed in purchase contracts.

The Federal Lemon Law is also referred to as The Magnuson Moss Warranty Act in legal terms. Most of the states also have independent laws and acts that govern lemons. These laws are named differently in each state and vary considerably from state to state.

The first lemon laws were passed in 1982 in the state of California and Connecticut and were designed to protect consumers from recurring problems with their new products. Since then it has been extended to other consumer products. A “lemon” is generally regarded as a product which has defects that substantially impairs its use, value, or safety. Generally, if the product has been repaired a number of times for the same defect within the Warranty Period, the product qualifies as a Lemon.

Lemon laws establish a standard on when the product should be repurchased or replaced by the manufacturer. A lemon law contains eligibility requirements, notice requirements, and also set out specific remedies that a consumer may have in a legal action against the manufacturer if a product cannot be fixed to conform to the warranty after a reasonable number of repair attempts. It is important for you to know your rights and responsibilities under the lemon law.
Research your State's Lemon Law or get Lemon Law Consultation from the Krohn & Moss Consumer Law Center®

The Krohn & Moss Consumer Law Center® wants to help you understand your rights and responsibilities under the Lemon Law, and equip you with the information and expertise needed to obtain a fair resolution.

Some state specific lemon laws may apply only to consumer products owned by individuals and used primarily for personal, family, or household use. You may still qualify for relief under various federal and state laws, even if you have a product that is used for commercial purpose.

To qualify for protection under a Lemon Law:

• The consumer must have a defective product that has not been fixed within a reasonable number of repair attempts as defined by your state
• The product has undergone repairs for the same problem or has been out of service by reason of repair for more than a reasonable number of days during the warranty period.
• Any problem that substantially impairs the use and market value of the product and the warrantor is unable to make the product free from defects within a reasonable number of attempts.

If you qualify under the lemon law for your product, you may be entitled to receive a refund or a replacement product, plus sales taxes, licensing and title fees, registration fees, rental product costs and towing charges in case of automobiles, as well as any finance or interest charges and attorney fees. Generally, the choice of refund or replacement product is that of the consumer and not the manufacturer.

At the Krohn & Moss Consumer Law Center®, if your claim is proven to be successful, the manufacturer is responsible for paying our fees and costs. If the claim is not successful, the manufacturer is not required to pay our fees. However, you will still NOT OWE US anything. By representing you we are indicating that we believe strongly in the merits of your claim.