You asked what approaches other states have taken to create a Lemon Law for personal computers and software.

SUMMARY

We could not find any laws establishing a lemon law for personal computers or personal computer software. Lemon laws give consumers the right to a repair, refund, or replacement if product defects are detected during a specified period after purchase and the manufacturer cannot or does not repair them within a certain time.

We found two states, Pennsylvania and Illinois, with nearly identical bills establishing computer lemon laws during the 2000 and 2001 biennium. The bills (1) require manufacturers to repair computers within five days, (2) inform purchasers of their lemon law rights at the time of purchase, and (3) establish a consumer's right to repair, replacement, or refund and the right to sue for damages.

Both bills are stalled in their respective legislatures. In both states, they were re-introduced after they failed to pass in earlier sessions. We have attached copies. In Illinois, the legislature made a small change. The amendment is also attached.

PENNSYLVANIA AND ILLINOIS LEMON LAW PROPOSALS

The bills protect individuals and businesses with fewer than 30 computer workstations that leased, bought, or received a computer as a gift. They apply to the central processing unit, monitors, printers, connective devices, modems, scanners and other devices, as well as to any programming for a computer, whether pre-installed or purchased separately (Illinois HB 1046 and Pennsylvania HB 1052).

Consumer Rights

The bills require anyone who purchases a computer to receive a statement of his lemon law rights at the time of sale. The amended Illinois bill states that the statement must be provided by the manufacturer. Both bills require a computer manufacturer to obtain a signed acknowledgment from each purchaser indicating that he had seen and understood his rights. Unless a manufacturer secures a signed acknowledgement, the time limits to file a claim are tolled. A manufacturer is also required to disclose to consumers at the time of sale the names of all software likely to cause operating problems and has the burden of proving it has made such disclosures in any claim brought under the bill.

Right to Repair

The bills entitle consumers to free repair of any nonconformity occurring within 24 months after the manufacturer obtained the consumer's signed acknowledgement of his rights. A "nonconformity" is defined as any defect, condition, or malfunction that impairs the use of a computer device or causes it to operate in an unintended way. If the manufacturer has issued a warranty or service contract, the coverage period must be the greater of 24 months or the term specified in the warranty or service contract.

The bills require a manufacturer to repair and return any computer to the buyer within five business days, plus a reasonable time for shipping, which cannot be more than three days. Free repairs must be made on-site if provided for in the warranty. Repairs made by the consumer at the manufacturer's direction are considered to be conducted by the manufacturer. If repairs are not made on-site, the manufacturer must arrange and pay for shipping. Repairs are guaranteed for two years.

If the first repair is ineffective, the bills give manufacturers a second chance to repair on-site. The repair must be completed within three business days. The bill prohibits manufacturers from requiring the consumer to ship the computer back to the manufacturer for its final opportunity to repair.

Right to Refund or Replacement

If the second repair is either ineffective or not timely, the bills give a purchaser the right to either a full refund or a new computer of equal or greater value.

If more than one problem with the original computer has been subject to repair under the bill, a purchaser is entitled to a refund or a new computer after only one repair attempt.

Return of the Computer

If a manufacturer replaces a computer or refunds its purchase price, the bills authorize it to ask the consumer to return the original computer at cost.

Prohibition against Reselling a Lemon Personal Computer

No computer returned to the manufacturer may be resold in the respective states. If this provision is violated, a person who buys the resold computer is entitled to the remedies available of the state's unfair trade practices act and to damages equal to triple the purchase price.

Records

The bills require a manufacturer to keep records of all contacts and communications between itself and a consumer and to keep a list, arranged by serial number, of all refunds and replacements made under the bill. Copies must be provided to a consumer on demand, regardless of whether a manufacturer uses a third party to manage consumer claims.

Civil Actions

In both states, a violation is an unfair trade practice.

In addition to a refund or replacement, the bills allow a consumer to sue for damages equal to three times the purchase price if a manufacturer fails to honor warranty terms or fails to keep records of all consumer contacts and provide copies on request.

Under both bills, a prevailing purchaser may receive up to $ 6,000 in damages from the trial court. In Pennsylvania, small claims and other courts may award lesser amounts in damages.

The bills require a manufacturer to produce a corporate witness who is aware of the facts and circumstances of the case at every court proceeding and allow manufacturers to assert relevant defenses. A nonconformity caused by software is not allowed as a defense if the software was pre-installed by the manufacturer except if (1) the manufacturer produces an expert who states the cause of the problem and a way to fix it, and (2) the manufacturer had strictly complied with the bill's software notice provisions.

Under both bills, consumers may not be required to produce experts. If a purchaser prevails, the manufacturer must pay reasonable attorney's fees and costs, as well as any expert expenses.

DD: ro