Lemon Law and the Applicable

¶ … lemon law and the applicable UCC code to its effectiveness. The writer uses a court case from New Jersey to outline what the UCC is and how it governs the sale of goods in general. There were three sources used to complete this paper.

Most people have heard tales of someone buying a vehicle and the vehicle stopped running almost instantly. The horror stories that follow with regard to that purchase make for dinner table fodder for months; however there is often confusion on what the buyer's rights are in such situations. Every state in the country now has enacted "Lemon Laws" that are specifically designed to handle situations where a substantial purchase is made and the goods are not as they were represented. The Lemon Laws are meant to protect consumers from being taken advantage of by savvy sellers, as well as provide clear guidelines for sellers in what they can and cannot do in the sale of a product. In addition to the Lemon Laws on the books in each state there are also UCC mandates in place to protect both the buyer and seller in a transaction.

UCC

Before one can begin to apply the UCC codes to the sale of a vehicle or other substantial purchase one should have an understanding of what the UCC is and how it governs the sale of goods on a general scale.

The Uniform Commercial Code provides government supervised mandate with regards to commercial transactions. "Article 9 of the Uniform Commercial Code (UCC), titled Secured Transactions, designates the office of the Secretary of State as the place for the filing and searching of secured transaction documents (UCC Overview (http://www.michigan.gov/sos/0,1607,7-127-1631_8851-29412 -- ,00.html)."

An example of this would be when someone wants to borrow money to make a purchase. Often the loans being requested are for substantial items including vehicles or homes. The borrower pledges what is referred to as collateral to secure the loan. Securing means that if the borrower defaults on the loan payments then that borrower loses the collateral that was pledged and the creditor can take ownership of such collateral (UCC Overview (http://www.michigan.gov/sos/0,1607,7-127-1631_8851-29412 -- ,00.html).

Financing statements are filed as a public notice of a security interest in collateral. Record searches are requested to reveal financing statements filed against an organization or individual (UCC Overview (http://www.michigan.gov/sos/0,1607,7-127-1631_8851-29412 -- ,00.html)."

The UCC statement provides a protection by providing public notice to others about the collateral and the financing request.

It also helps the creditor by providing strength in collection even in the event the borrower declares bankruptcy against the debt.

Another function of the UCC is to oversee and supervise the purchase of all products by providing the legal ability of all buyers to return products that do not live up to their product contract, which in the case of vehicles moves toward the Lemon Law provisions.

The Case

In the specific case of Zabriskie Chevrolet, Inc.v. Smith, 240 a. 2d 195(1968) there were specific UCC mandates that were applicable in the decision that was reached.

The UCC had an impact on this court case because of the general protection that the UCC provides with regard to new vehicle purchase.

The law believes that the common consumer does not have the expertise to know whether or not a vehicle they purchase complies with the contract with regard to vehicle performance and safety (Uniform Commercial Code Summary (http://autopedia.com/html/HotLinks_LemonUCC.html).Therefore the law allows an assumption on the part of the buyer to believe that the vehicle is free from defect unless that defect has been disclosed prior to purchase (Uniform Commercial Code Summary (http://autopedia.com/html/HotLinks_LemonUCC.html).

The UCC mandates with regards to Lemon Law provision allows a buyer to reject a purchased vehicle and break the financial agreement if the vehicle is found to be defective within a reasonable time period from the purchase.

The time period that is considered to be reasonable is not clearly defined by the UCC however, it provides time for the buyer to take possession of the vehicle and have it inspected for defects by another party.

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 (Uniform Commercial Code Summary (http://autopedia.com/html/HotLinks_LemonUCC.html)."

In the named case the UCC provided protection to the buyer because he had only driven a few miles before the vehicle refused to perform to the reasonable standard of a new vehicle.

The UCC also applies the Lemon Law to vehicle purchases that go beyond a few miles or days before the defects are discovered if the defects and such that immediate discovery would not be expected.

In addition the protection of the UCC is there for the buyer if the buyer was promised that any later discovered non-compliance with contract defects would be repaired at no charge (Uniform Commercial Code Summary (http://autopedia.com/html/HotLinks_LemonUCC.html).