KENTUCKY LEMON LAW:
Kentucky Lemon Law
Statutes 367.840 KRS to 367.846 & 367.860 to 367.870
367.840 KRS 347.841 to 367.844 to be construed liberally -- Purposes.
KRS 367.841 to 367.844 shall be liberally construed and applied to promote the
underlying purposes of KRS 367.841 to 367.844, which purposes are:
(1) To protect consumers who buy or lease new motor vehicles that do not conform
to applicable warranties by holding manufacturers accountable for certain
nonconformities;
(2) To limit the number of attempts and the amount of times that a manufacturer
or its agents shall have to cure such nonconformities; and
(3) To require manufacturers to provide, in as expeditious a manner as possible,
a refund, not to exceed the amount in KRS 367.842, or replacement vehicle that
is acceptable to the aggrieved consumer when the manufacturer or its agents fail
to cure any nonconformity within the specified limits.
Effective: July 15, 1998
History: Amended 1998 Ky. Acts ch. 54, sec. 1, effective July 15, 1998. --
Created 1986 Ky. Acts ch. 387, sec. 1, effective July 15, 1986.
367.841 Definitions.
(1) "Buyer" means any resident person who buys, contracts to buy, or leases a
new motor vehicle in the Commonwealth of Kentucky. In the case of the lease of a
new motor vehicle, "buyer" shall mean the lessor, lessee, or both.
(2) "Manufacturer" means any person or corporation, resident or nonresident, who
manufactures or assembles new motor vehicles, including new conversion van
manufacturers, which are sold in the Commonwealth of Kentucky.
(3) "Motor vehicle" means every vehicle which is self-propelled, and which is
intended primarily for use and operation on the public highways and required to
be registered or licensed in the Commonwealth prior to such use or operation;
however, "motor vehicle" shall not include:
(a) Any vehicle substantially altered after its initial sale from a dealer to an
individual;
(b) Motor homes;
(c) Motorcycles;
(d) Mopeds;
(e) Farm tractors and other machines used in the production, harvesting, and
care of farm products; or
(f) Vehicles which have more than two (2) axles.
(4) "New motor vehicle" means a motor vehicle which has been finally and
completely assembled and is in the possession of a manufacturer, factory branch,
distributor, wholesaler, or an authorized motor vehicle dealer operating under a
valid sales and service agreement, franchise, or contract for the sale of such
vehicle granted by the manufacturer, factory branch, distributor, or wholesaler
which is, in fact, new and on which the original title has never been issued.
(5) "Express warranty" or "warranty" means the written warranty, so labeled, of
the manufacturer of a new automobile, including any terms or conditions
precedent to the enforcement of obligations under the warranty.
(6) "Nonconformity" means a failure to conform with an express warranty in a
manner which substantially impairs the use, value, or safety of the motor
vehicle.
(7) "Reasonable allowance for use" means the amount directly attributable to a
consumer's use of the vehicle other than those time periods when the vehicle is
out of service due to the nonconformity.
Effective: July 15, 1998
History: Amended 1998 Ky. Acts ch. 54, sec. 2, effective July 15, 1998; and ch.
96, sec. 1, effective July 15, 1998. -- Created 1986 Ky. Acts ch. 387, sec. 2,
effective July 15, 1986. Legislative Research Commission Note (7/15/98). This
section was amended by 1998 KY. Acts chs. 54 and 96 which do not appear to be in
conflict and have been codified together.
367.842 Options of buyer if manufacturer unable to repair nonconformity in new
motor vehicle -- Rights of lienholder -- Resolution of disputes -- Dealer not
liable.
(1) If, after a reasonable number of attempts, the manufacturer or its agents
are unable to repair the nonconformity in the motor vehicle to the express
warranty during the first twelve thousand (12,000) miles of operation or during
the first twelve (12) months following the date of delivery to the buyer,
whichever is the earlier date, that buyer shall report the nonconformity, in
writing, to the manufacturer.
(2) If, within the period specified in subsection (1) of this section, the
manufacturer or its agents, are unable to repair or correct any nonconformity or
defect that substantially impairs the use, value, or safety of the motor
vehicle, after a reasonable number of attempts, the manufacturer, at the option
of the buyer, shall replace the motor vehicle with a comparable motor vehicle,
or accept return of the vehicle from the buyer and refund to the buyer the full
purchase price. The full purchase price shall include the amount paid for the
motor vehicle, finance charge, all sales tax, license fee, registration fee, and
any similar governmental charges plus all collateral charges, less a reasonable
allowance for the buyer's use of the vehicle. Refunds shall be made to the buyer
and lienholder, if any, as their interests may appear on the records of
ownership kept by the Department of Vehicle Regulation. The provisions of this
section shall not affect the interests of a lienholder, unless the lienholder
consents to the replacement of the lien with a corresponding lien on the
automobile accepted by the consumer in exchange for the automobile having a
nonconformity, the lienholder shall be paid in full the amount due on the lien,
including finance charges and other charges, before an exchange of automobiles
or a refund to the consumer is made. It shall be an affirmative defense to any
claim under this section that:
(a) The nonconformity, defect, or condition does not substantially impair the
use, value, or safety of the motor vehicle; or
(b) The nonconformity, defect, or condition is the result of abuse, neglect, or
unauthorized modification or alteration of the motor vehicle by the buyer.
(3) It shall be presumed that a reasonable number of attempts have been
undertaken to conform a motor vehicle to the applicable express warranty if,
within the first twelve thousand (12,000) miles of operation or during the
period of, twelve (12) months following the date of original delivery of the
motor vehicle to the buyer, whichever is the earlier date:
(a) The same nonconformity, defect, or condition has been subject to repair four
(4) or more times by the manufacturer, but such nonconformity, defect, or
condition continues to exist; or
(b) The vehicle is out of service/use by reason of repair of the same
nonconformity, defect, or condition for a cumulative total of at least thirty
(30) calendar days.
(4) Disputes arising under subsection (2) of this section concerning refund or
replacement shall be resolved through the dispute resolution system established
under either KRS 367.860 to 367.870, or 16 C.F.R. part 703. Such remedy shall be
pursued prior to seeking any judicial relief under KRS 367.843.
(5) Nothing in this chapter may be construed as imposing any liability on a
dealer or creating a cause of action by a consumer against a dealer.
(6) Nothing in this section shall in any way limit the rights or remedies which
are otherwise available to a buyer under any other law.
(7) Any agreement entered into by a buyer for the purchase of a new motor
vehicle which waives, limits, or disclaims the rights set forth in this section
shall be void as contrary to public policy.
(8) Any action brought pursuant to this section shall be commenced within two
(2) years after the date of original delivery of the new motor vehicle to the
buyer.
(9) A court may award reasonable attorney's fees to a prevailing plaintiff.
Effective: July 15, 1986
History: Created 1986 Ky. Acts ch. 387, sec. 3, effective July 15, 1986.
367.843 Action for relief by purchaser.
Any person who purchases a motor vehicle and thereby suffers any ascertainable
loss of money or property, real or personal, as a result of a violation of KRS
367.842, may bring an action under the provisions of KRS 367.220 for relief.
Effective: July 15, 1986
History: Created 1986 Ky. Acts ch. 387, sec. 4, effective July 15, 1986.
367.844 Manufacturer prohibited from exposing franchised dealer to liability.
No manufacturer shall, directly or indirectly, by any means or methods, expose
or attempt to expose any franchised dealer to liability as forbidden in KRS
367.842(4) and (5). Any violation of this section shall be subject to all
applicable provisions of the law, including but not limited to the provisions of
KRS 190.062(2).
Effective: July 15, 1986
History: Created 1986 Ky. Acts ch. 387, sec. 5, effective July 15, 1986.
367.845 Enforcement of provisions of KRS 367.842 to 367.844 by Attorney General.
Noncompliance with the provisions of KRS 367.842 to 367.844 by a manufacturer
shall be unlawful. The Attorney General shall have authority to enforce KRS
367.842 to 367.844 in accordance with powers provided by KRS 367.190 and
367.230, pertaining to acts declared unlawful by KRS 367.170. Any expenses
accruing to the Attorney General from the provisions of KRS 367.842 to 367.844
shall be assessed by his office upon the motor vehicle manufacturer involved in
any action cited in the provisions herein.
Effective: July 15, 1986
History: Created 1986 Ky. Acts ch. 387, sec. 6, effective July 15, 1986.
367.846 Application of KRS 367.840 to 367.845.
KRS 367.840 to 367.845 shall apply to new motor vehicles purchased after July
15, 1986, and to motor vehicles leased after July 15, 1998.
Effective: July 15, 1998
History: Amended 1998 Ky. Acts ch. 54, sec. 3, effective July 15, 1998. --
Created 1986 Ky. Acts ch. 387, sec. 7, effective July 15, 1986.
Informal Dispute Resolution System
367.860 DEFINITIONS FOR KRS 367.865
As used in KRS 367.865 unless the context requires otherwise:
(1) "Buyer" means any resident person who buys or contracts to buy a new motor
vehicle in the Commonwealth of Kentucky.
(2) "Manufacturer" means any person, resident or nonresident, who manufactures
or assembles new motor vehicles which are sold in the Commonwealth of Kentucky.
(3) "Motor vehicle" means any two (2) axle, motor-driven vehicle with at least
four (4) wheels which is required to be registered or licensed in the
Commonwealth of Kentucky before being operated upon the highways and is used or
bought for use primarily for personal, family, or household purposes.
(4) "New motor vehicle" means a motor vehicle which, after its final assembly,
is either in the possession of the manufacturer, factory branch or distributor,
or an authorized dealer operating under a franchise with the manufacturer,
factory branch or distributor, and the legal or equitable title to which has
never been the subject of a sale or transfer other than to another dealer
operating under a similar franchise with the same manufacturer, factory branch
or distributor.
(5) "System" means an informal dispute resolution procedure adopted by each
manufacturer to resolve questions of law and fact relating to disputes between
the buyer and the manufacturer arising within the first two (2) years or
twenty-five thousand (25,000) miles of the buyer's ownership, whichever occurs
first, including but not limited to unsatisfactory warranty repairs of the
buyer's motor vehicle, mechanical malfunctions of the buyer's motor vehicle, or
other problems relating to the performance of the buyer's motor vehicle.
Effective: July 15, 1982
History: Created 1982 Ky. Acts ch. 193, sec. 1, effective July 15, 1982.
367.865 INFORMAL DISPUTE RESOLUTION SYSTEM
(1) Effective January 1, 1983, each motor vehicle manufacturer shall offer to
the buyer a comprehensive informal dispute resolution system. By transacting
business in the Commonwealth of Kentucky, each manufacturer is deemed to have
voluntarily consented to participate in the system. Each system shall operate
pursuant to written rules and procedures which:
(a) Ensure that the system is impartial, accessible to the buyer, and
expeditious, and shall operate at no cost to the buyer;
(b) Provide that if the buyer elects to submit the dispute to the system, the
manufacturer shall not refuse to submit the dispute to the system as long as the
subject of the dispute occurred during the first two (2) years or twenty-five
thousand (25,000) miles, whichever occurs first, of the buyer's ownership of the
motor vehicle involved in the dispute;
(c) Provide that the system shall provide for an oral hearing, unless the buyer
agrees in writing that the system shall render a decision based solely on
documents submitted to it;
(d) Shall include, but is not limited to, procedures for informing the buyer of
the existence of the system, preparing the agreement between the buyer and the
manufacturer whereby the dispute may be submitted to the system, selecting the
members of the decision-making panel, notifying the parties of the complaint,
investigating the complaint, providing for hearings, rendering a fair and
expeditious decision, and informing parties of the decision.
(2) The decision of the system shall be legally binding on the manufacturer. The
decision of the system shall not be legally binding on the buyer, unless the
manufacturer elects to have its system binding on all buyers who summit their
disputes to the system. If the system is to be binding to both parties, the
written agreement between the buyer and the manufacturer whereby the dispute is
submitted to the system shall include in conspicuous, bold-faced type the
following statement: "YOU SHOULD REMEMBER THAT BY ENTERING INTO THIS AGREEMENT
YOU ARE DECIDING TO USE THIS DISPUTE RESOLUTION SYSTEM TO SETTLE YOUR DISPUTE
INSTEAD OF GOING TO COURT. AFTER A DECISION BY AN ARBITRATOR, NORMALLY A COURT
WILL REFUSE TO HEAR THE FACTS IN A CASE IN ALL BUT THE MOST UNUSUAL SITUATIONS.
YOUR SIGNATURE IS REQUIRED IMMEDIATELY BELOW TO INDICATE THAT YOU HAVE READ THIS
DISCLOSURE.
______________________________"
SIGNATURE OF BUYER
(3) Before a dispute may be submitted to a system which is legally binding on
both parties, the buyer shall sign the disclosure statement required by
subsection (2) of this section.
(4) Each manufacturer shall take steps reasonably calculated to make the buyer
aware of the existence of the system at the time the dispute arises.
(5) Each manufacturer shall take all steps necessary to ensure that the system
is sufficiently insulated from the manufacturer so that the decisions of the
system are not influenced by the manufacturer. The system's decision-making
panel shall be composed of members at least fifty-one percent (51%) of whom have
no involvement in the manufacture, distribution or sale of motor vehicles. No
member deciding a dispute shall be a party to the dispute; nor shall any member
deciding a dispute be an employee or agent of a party to the dispute, unless
solely for the purpose of impartially deciding disputes.
(6) Nothing herein shall prohibit the manufacturer from participating in a
system sponsored or administered by an impartial third party having no direct
involvement in the manufacture, distribution, sale, or service of motor
vehicles.
(7) Each dispute resolution system shall provide to the office of the Attorney
General, upon request, the name and address of each buyer whose complaint is
resolved through its system. The Attorney General shall have the authority to
monitor each dispute resolution system as well as review the records on each
complaint, upon request. An annual report shall be prepared and published by the
office of the Attorney General evaluating the performance, effectiveness, and
benefits of the system, and shall include in this report recommendations for
continuing, modifying, or terminating the requirement of this section.
Effective: July 13, 1984
History: Amended 1984 Ky. Acts ch. 360, sec. 1, effective July 13, 1984. --
Created 1982 Ky. Acts ch. 193, sec. 2, effective July 15, 1982.
367.867 OTHER DISPUTE RESOLUTION SYSTEM SATISFIES REQUIREMENTS OF KRS 367.865
Notwithstanding the provisions of KRS 367.860 to 367.870, a dispute resolution
system which is established pursuant to and in compliance with 16 C.F.R. Part
703 satisfies the requirements of KRS 367.865, as long as the dispute resolution
system provides each party to the dispute with the right to an oral hearing.
Effective: July 13, 1984.
History: Created 1984 Ky. Acts ch. 360, sec. 2, effective July 13, 1984.
367.870 ENFORCEMENT OF INFORMAL DISPUTE RESOLUTION SYSTEM
Noncompliance with KRS 367.865 by a manufacturer shall be unlawful. The Attorney
General shall have authority to enforce KRS 367.865 in accordance with powers
provided by KRS 367.190 and 367.230 to 367.300, pertaining to acts declared
unlawful by KRS 367.170
Effective: July 15, 1982
History: Created 1982 Ky. Acts ch. 193, sec. 3, effective July 15, 1982.
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