Implied Warranties and the Lemon Law

Over and above individual state Lemon Laws, the Uniform Commercial Code is the basis for state laws that govern what are called “implied warranties” on new and used cars. State laws hold dealers responsible if cars they sell don’t meet reasonable quality standards.

These obligations — implied warranties — are unspoken, unwritten promises from the seller to the buyer. However, dealers in most states can use the words “as is” or “with all faults” in a written notice to buyers to eliminate implied warranties. There is no specified time period for implied warranties.

Warranty of Merchantability

The most common type of implied warranty is the warranty of merchantability. The seller promises that the product offered for sale will do what it’s supposed to. That a car will run is an example of a warranty of merchantability. This promise applies to the basic functions of a car. It does not cover everything that could go wrong.

Breakdowns and other problems after the sale don’t prove the seller breached the warranty of merchantability. A breach occurs only if the buyer can prove that a defect existed at the time of sale. A problem that occurs after the sale may be the result of a defect that existed at the time of sale or not. As a result, a dealer’s liability is judged case-by-case.

Warranty of Fitness for a Particular Purpose

A warranty of fitness for a particular purpose applies when you buy a vehicle based on the dealer’s advice that it is suitable for a particular use. For example, a dealer who suggests you buy a specific vehicle for hauling a trailer in effect is promising that the vehicle will be suitable for that purpose.

If you have a written warranty that doesn’t cover your problems, you still may have coverage through implied warranties. That’s because when a dealer sells a vehicle with a written warranty or service contract, implied warranties are included automatically. The dealer can’t delete this protection. Any limit on an implied warranty’s time must be included on the written warranty.

In states that don’t allow “as is” sales of used cars, an “Implied Warranties Only” disclosure will be printed on the Federal Trade Commission Buyers Guide that is displayed in the car. The box beside this disclosure will be checked if the dealer decides to sell the car with no written warranty.

In states that do allow “as is” used car sales, the “Implied Warranties Only” disclosure will appear on the Buyers Guide if the dealer decides to sell a vehicle with implied warranties and no written warranty.

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