Title 6, Subtitle II, Chapter 50, Sections 5001 - 5009
Commerce And Trade
As used in this chapter:
(1) "Consumer" means the purchaser, other than for purposes
of resale, of an automobile; a person to whom an automobile is
transferred during the duration of an express warranty applicable
to the automobile; or any other person entitled by the terms of
the warranty to enforce the obligations of the warranty.
(2) "Dealer" means a person actively engaged in the business
of buying, selling or exchanging automobiles at retail and who
has an established place of business.
(3) "Manufacturer" means a person engaged in the business
of manufacturing, assembling or distributing automobiles, who
will, under normal business conditions during the year, manufacture,
assemble or distribute to dealers at least 10 new automobiles.
(4) "Manufacturer's express warranty" or "warranty" means
the written warranty of the manufacturer of a new automobile of
its condition and fitness for use, including any terms or conditions
precedent to the enforcement of obligations under that warranty.
(5) "Automobile" means any passenger motor vehicle, except
motorcycles, which is leased or bought in Delaware or registered
by the Division of Motor Vehicles in the Department of Public
Safety except the living facilities of motor homes.
(6) "Nonconformity" means a defect or condition which
substantially impairs the use, value or safety of an automobile.
(7) "Lien" means a security interest in an automobile.
(8) "lien holder" means a person with a security interest
in an automobile pursuant to a lien.
5002 Duty to repair nonconforming automobiles.
If a new automobile does not conform to the manufacturer's express
warranty, and the consumer reports the nonconformity to the manufacturer
or its agent or dealer during the term of the warranty or during
the period of 1 year following the date of original delivery of
an automobile to the consumer, whichever is earlier, the manufacturer
shall make, or arrange with its dealer or agent to make, within
a reasonable period of time, all repairs necessary to conform the
new automobile to the warranty, notwithstanding that the repairs
or corrections are made after the expiration of the term of the
warranty or the 1-year period.
5003 Remedies upon failure to repair.
(a) If the manufacturer, its agent or its authorized dealer
does not conform the automobile to any applicable express warranty
by repairing or correcting any nonconformity after a reasonable
number of attempts, the manufacturer shall either replace the
automobile with a comparable new automobile acceptable to the
consumer or repurchase the automobile from the consumer and refund
to the consumer the full purchase, including all credits and allowances
for any trade-in vehicle; provided, however, that the consumer
shall have the unqualified right to decline a replacement automobile
and to demand instead a repurchase.
(b) In instances in which an automobile is replaced by
a manufacturer under this section, said manufacturer shall accept
return of the automobile and reimburse the consumer for any incidental
costs, including dealer preparation fees, fees for transfer of
registration, sales taxes or other charges or fees incurred by
the consumer as a result of such replacement. In instances in
which an automobile which was financed by the manufacturer or
its subsidiary or agent is replaced under this section, said manufacturer,
subsidiary or agent shall not require the consumer to enter into
any refinancing agreement for a replacement automobile which would
create any financial obligations upon such consumer beyond those
created by the original financing agreement.
(c) In instances in which a refund is tendered under this
section, the manufacturer shall accept return of the automobile
from the consumer and shall reimburse the consumer for related
purchase costs, including sales taxes, registration fees and dealer
preparation fees, less:
(1) A reasonable allowance for the consumer's use of
the automobile, not to exceed the full purchase price of the
automobile multiplied by a fraction which consists of the number
of miles driven before the consumer first reported the nonconformity
to the manufacturer, its agent or dealer divided by 100,000
(2) A reasonable allowance for damage not attributable
to normal wear and tear, but not to include damage resulting
from a nonconformity.
(d) Refunds shall be made to the consumer, and lien holder,
if any, as their interests may appear.
(e) No authorized dealer shall be held liable by the manufacturer
for any refunds or automobile replacements in the absence of evidence
indicating that dealership repairs have been carried out in a
manner inconsistent with the manufacturer's instructions.
(a) It shall be presumed that a reasonable number of attempts
have been undertaken to conform a new automobile to the manufacturer's
express warranty if, within the warranty term or during the period
of 1 year following the date of original delivery of the motor
vehicle to a consumer, whichever is the earlier date:
(1) Substantially the same nonconformity has been subject
to repair or correction 4 or more times by the manufacturer,
its agents or its dealers and the nonconformity continues to
(2) The automobile is out of service by reason of repair
or correction of a nonconformity by the manufacturer, its agents
or its dealers for a cumulative total of more than 30 calendar
days since the original delivery of the motor vehicle to the
consumer. This 30-day limit shall commence with the first day
on which the consumer presents the automobile to the manufacturer,
its agent or dealer for service of the nonconformity and a written
document describing the nonconformity is prepared by the manufacturer,
its agent or dealer. The 30-day limit shall be extended only
if repairs cannot be performed due to conditions beyond the
control of the manufacturer, its agents or its dealers, including
war, invasion, strike, fire, flood or other natural disaster.
(b) The presumption provided in this section shall not
apply against a manufacturer unless the manufacturer has received
prior direct written notification from or on behalf of the consumer
and has had an opportunity to repair or correct the nonconformity;
provided, however, that if the manufacturer does not directly
attempt or arrange with its dealer or agent to repair or correct
the nonconformity, the manufacturer may not defend a claim by
a consumer under this chapter on the ground that the agent or
dealer failed to properly repair or correct the nonconformity
or that the repairs or corrections made by the agent or dealer
caused or contributed to the nonconformity.
5005 Costs and attorney's fees in breach of warranty actions.
In any court action brought under this chapter by a consumer against
the manufacturer of an automobile, or the manufacturer's agent or
authorized dealer, based upon the alleged breach of an express warranty
made in connection with the sale of such automobile, the court,
in its discretion, may award to the plaintiff his costs and reasonable
attorney's fees or, if the court determines that the action is brought
in bad faith or is frivolous in nature, may award reasonable attorney's
fees to the defendant.
5006 Affirmative defense to claim.
It shall be an affirmative defense to a claim under this chapter
that the alleged nonconformity does not substantially impair the
use, value or safety of the new automobile or that the nonconformity
is the result of abuse or neglect or of unauthorized modifications
or alterations of the new automobile by anyone other than the manufacturer,
its agent or dealer.
5007 Informal dispute settlement procedure.
(a) If a manufacturer has established an informal settlement
procedure that has a certificate of approval by the Division of
Consumer Protection, the remedies provided by this chapter shall
not be available to any consumer who has not first resorted to
such procedure.In the event a manufacturer's informal dispute
settlement procedure does not have a certificate of approval from
the Division of Consumer Protection, a consumer may immediately
and directly seek the remedies provided by this chapter.
(b) The Division of Consumer Protection shall annually
evaluate the operation of informal dispute settlement procedures
established by manufacturers and shall issue an annual certificate
of approval to those manufacturers whose procedures comply with
Title 16, Code of Federal Regulations, Part 703 and with subsections
(c), (d) and (e) of this section. The Division of Consumer Protection
shall suspend the certification of, or decertify, any informal
dispute settlement which no longer complies with said provisions.
(c) Any manufacturer who has established an informal settlement
procedure shall file with the Division of Consumer Protection
a copy of each decision of the informal dispute settlement procedure
within 30 days after the decision is rendered.
(d) In order to obtain the certification of the Division
of Consumer Protection, a manufacturer's informal dispute settlement
procedure shall not convene any informal dispute settlement hearing
or meeting outside the State and shall refrain from any practices
(1) Delay a decision in any dispute beyond 65 days after
the date on which the consumer initially resorts to the informal
dispute settlement procedure by written notification that a
dispute exists; or
(2) Delay performance of remedies awarded in a settlement
beyond 30 days after receipt of notice of the consumer's acceptance
of the decision; provided, however, that such time limits shall
not include periods of time when the consumer or the consumer's
car is unavailable for the remedies specified in the settlement;
(3) Require the consumer to make the automobile available
more than once for inspection by a manufacturer's representative
or more than once for repair of the same nonconformity; or
(4) Fail to consider in decisions any remedies provided
by this chapter, such remedies to include:
a. Repair, replacement and refund;
b. Reimbursement for related purchase costs; or
(5) Require the consumer to take any action or assume
any obligation not specifically authorized under the provisions
of Title 16, Code of Federal Regulations, Part 703.
(e) A manufacturer desiring annual certification of an
informal dispute settlement procedure shall make application to
the Division of Consumer Protection on forms developed by, and
shall provide such information as required by, the Division of
5008 Remedies cumulative.
Nothing in this chapter shall in any way limit the rights or remedies
available to a consumer under Subtitle I of this title.
In addition to any remedies the consumer may have at law or in
equity, a violation of this chapter shall be an unlawful practice
as defined in 2513 of this title. The Division of Consumer Protection
shall promulgate rules and regulations in order to implement the
purposes of this chapter.
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