Buyers Beware— Lemon Laws May Not Fully Protect
- On August 6, 2019
Finding a Resolution through Arbitration
When shopping for a new car, many consumers depend on “Lemon Laws”— the laws and regulations put in place to protect individuals purchasing motor vehicles—as a safeguard. However, there are certain situations in which individuals cannot seek help from the courts to settle motor vehicle purchase disputes. For instance, some motor vehicle purchase agreements expressly prohibit buyers from taking their arguments to court. Thus, consumers must seek arbitration for a resolution.
In arbitration, a dispute is brought before a third party, who will render the “Arbitration Award” that is legally binding in court. Therefore, before signing a purchase agreement, consumers should be aware of what arbitration provisions have been written into the contract. Otherwise, individuals may unknowingly sign away their rights to a lawsuit, counterclaim, jury trial and/or other actions in court.
Such was the case in Goffe v. Foulke Management Corporation. The buyers claimed misrepresentations had been made about the vehicle, which should invalidate the purchase agreement. However, the Supreme Court ruled under the Federal Arbitration Act that Goffe could not pursue a lawsuit and instead had to arbitrate the claim.
Buyers must be aware of their rights and obligations when entering into a purchase agreement. In case of a later dispute, always seek counsel to review agreements before signing. Attorneys can answer questions, address hesitations, and help consumers make informed decisions to help mitigate future risks.
Author: Douglas Widman, Esq. Mr. Widman has 40 years experience mediating and arbitrating commercial and injury disputes as an attorney in New Jersey. He is a certified mediator for the federal courts of NJ and arbitrator and mediator for the state courts, as well as for private parties.