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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