§ 4-90-402. Legislative determinations and intent.
The Arkansas General Assembly recognizes that a motor vehicle is
a major consumer acquisition and that a defective motor vehicle
undoubtedly creates a hardship for the consumer. The Arkansas General
Assembly further recognizes that a duly franchised motor vehicle
dealer is an authorized service agent of the manufacturer. It is
the intent of the Arkansas General Assembly that a good faith motor
vehicle warranty complaint by a consumer be resolved by the manufacturer
within a specified period of time. It is further the intent of the
Arkansas General Assembly to provide the statutory procedures whereby
a consumer may receive a replacement motor vehicle, or a full refund,
for a motor vehicle which cannot be brought into conformity with
the warranty provided for in this subchapter. However, nothing in
this subchapter shall in any way limit the rights or remedies which
are otherwise available to a consumer under any other law.
§ 4-90-403. Definitions.
As used in this subchapter, unless the context otherwise requires:
(1) "Calendar day" means any day of the week other than a legal
holiday;
(2) "Collateral charges" means those additional charges to a
consumer wholly incurred as a result of the acquisition of the
motor vehicle. For the purposes of this subchapter, collateral
charges include, but are not limited to, manufacturer-installed
or agent-installed items, earned finance charges, sales taxes,
title charges, and charges for extended warranties provided by
the manufacturer, its subsidiary, or agent;
(3) "Condition" means a general problem that may be attributable
to a defect in more than one (1) part;
(4) "Consumer" means the purchaser or lessee, other than for
the purposes of lease or resale, of a new or previously untitled
motor vehicle, or any other person entitled by the terms of the
warranty to enforce the obligations of the warranty during the
duration of the motor vehicle quality assurance period, provided
the purchaser has titled and registered the motor vehicle as prescribed
by law;
(5) "Incidental charges" means those reasonable costs incurred
by the consumer, including, but not limited to, towing charges
and the costs of obtaining alternative transportation which are
directly caused by the nonconformity or nonconformities which
are the subject of the claim, but shall not include loss of use,
loss of income, or personal injury claims;
(6)"Lease price" means the aggregate of:
(A) The lessor's actual purchase costs;
(B) Collateral charges, if applicable;
(C) Any fee paid to another person to obtain the lease;
(D) Any insurance or other costs expended by the lessor for
the benefit of the lease;
(E) An amount equal to state and local sales taxes, not otherwise
included as collateral charges, paid by the lessor when the
vehicle was initially purchased; and
(F) An amount equal to five percent (5%) of the lessor's actual
purchase price;
(7) "Lessee" means any consumer who leases a motor vehicle for
one (1) year or more pursuant to a written lease agreement which
provides that the lessee is responsible for repairs to such motor
vehicle;
(8) "Lessee cost" means the aggregate deposit and rental payments
previously paid to the lessor for the leased vehicle;
(9) "Lessor" means a person who holds title to a motor vehicle
leased to a lessee under the written lease agreement or who holds
the lessor's rights under such agreement;
(10) "Manufacturer" means:
(A) Any person who is engaged in the business of constructing
or assembling new motor vehicles or installing, on previously
assembled vehicle chassis, special bodies or equipment which,
when installed, form an integral part of the new motor vehicle;
or
(B) In the case of motor vehicles not manufactured in the United
States, any person who is engaged in the business of importing
new motor vehicles into the United States for the purpose of
selling or distributing new motor vehicles to new motor vehicle
dealers;
(11) "Motor vehicle" or "vehicle" means any self-propelled vehicle
licensed, purchased, or leased in this state and primarily designed
for the transportation of persons or property over the public
streets and highways, but does not include mopeds, motorcycles,
the living facilities of a motor home, or vehicles over ten thousand
pounds (10,000 lbs.) gross vehicle weight rating. For purposes
of this definition, the limit of ten thousand pounds (10,000 lbs.)
gross vehicle weight rating does not apply to motor homes;
(12) "Motor vehicle quality assurance period" means a period
of time that:
(A) Begins:
(i) On the date of original delivery of a motor vehicle;
or
(ii) In the case of a replacement vehicle provided by a manufacturer
to a consumer under this subchapter, on the date of delivery
of the replacement vehicle to the consumer; and
(B) Ends twenty-four (24) months after the date of the original
delivery of the motor vehicle to a consumer, or the first twenty-four
thousand (24,000) miles of operation attributable to the consumer,
whichever is later;
(13) "Nonconformity" means any specific or generic defect or
condition or any concurrent combination of defects or conditions
that:
(A) Substantially impairs the use, market value, or safety
of a motor vehicle; or
(B) Renders the motor vehicle nonconforming to the terms of
an applicable manufacturer's express warranty or implied warranty
of merchantability;
(14) "Person" means any natural person, partnership, firm, corporation,
association, joint venture, trust, or other legal entity;
(15) "Purchase price" means the cash price paid for the motor
vehicle appearing in the sales agreement or contract, including
any net allowance for a trade-in vehicle;
(16) "Replacement motor vehicle" means a motor vehicle which
is identical or reasonably equivalent to the motor vehicle to
be replaced, as the motor vehicle replaced existed at the time
of the original acquisition; and
(17) "Warranty" means any written warranty issued by the manufacturer,
or any affirmation of fact or promise made by the manufacturer,
excluding statements made by the dealer, in connection with the
sale or lease of a motor vehicle to a consumer which relates to
the nature of the material or workmanship and affirms or promises
that such material or workmanship is free of defects or will meet
a specified level of performance.
§ 4-90-404. Notice by consumer - Disclosure by manufacturer,
agent, or dealer.
(a)
(1) A consumer must notify the manufacturer of a claim under
this subchapter if the manufacturer has made the disclosure
required by subsection (b) of this section.
(2) However, if the manufacturer has not made the required
disclosure, the consumer is not required to notify the manufacturer
of a claim under this subchapter.
(b)
(1) At the time of the consumer's purchase or lease of the
vehicle, the manufacturer, its agent, or an authorized dealer
shall provide to the consumer a written statement that explains
the consumer's rights and obligations under this subchapter.
(2) The written statement shall be prepared by the Consumer
Protection Division of the Office of the Attorney General and
shall include the telephone number of the Consumer Protection
Division that the consumer can contact to obtain information
regarding his or her rights and obligations under this subchapter.
(3) For each failure of the manufacturer, its agent, or an
authorized dealer to provide to a consumer the written statement
required under this section, the manufacturer shall be liable
to the State of Arkansas for a civil penalty of not less than
twenty-five dollars ($25.00) nor more than one thousand dollars
($1,000).
(c)
(1) The manufacturer shall clearly and conspicuously disclose
to the consumer, in the warranty or owner's manual, that written
notice of the nonconformity is required before the buyer may
be eligible for a refund or replacement of the vehicle.
(2) The manufacturer shall provide the consumer with conspicuous
notice of the address and phone number for its zone, district,
or regional office for this state at the time of vehicle acquisition,
to which the buyer must send notification.
§ 4-90-405. Required warranty repairs.
If a motor vehicle does not conform to the warranty and the consumer
reports the nonconformity to the manufacturer, its agent, or authorized
dealer during the motor vehicle quality assurance period, the manufacturer,
its agent, or authorized dealer shall make such repairs as are necessary
to correct the nonconformity, even if the repairs are made after
the expiration of the term of protection.
(1) After three (3) attempts have been made to repair the
same nonconformity that substantially impairs the motor vehicle,
or after one (1) attempt to repair a nonconformity that is likely
to cause death or serious bodily injury, the consumer shall
give written notification, by certified or registered mail,
to the manufacturer of the need to repair the nonconformity
in order to allow the manufacturer a final attempt to cure the
nonconformity.
(2) The manufacturer shall, within ten (10) days after receipt
of the notification, notify and provide the consumer with the
opportunity to have the vehicle repaired at a reasonably accessible
repair facility, and, after delivery of the vehicle to the designated
repair facility by the consumer, the manufacturer shall, within
ten (10) days, conform the motor vehicle to the warranty.
(3) If the manufacturer fails to notify and provide the consumer
with the opportunity to have the vehicle repaired at a reasonably
accessible repair facility or fails to perform the repairs within
the time periods prescribed in this subsection, the requirement
that the manufacturer be given a final attempt to cure the nonconformity
does not apply and a nonrebuttable presumption of a reasonable
number of attempts to repair arises.
(b)
(1)
(A) If the manufacturer, its agent, or authorized dealer
has not conformed the motor vehicle to the warranty by repairing
or correcting one (1) or more nonconformities that substantially
impair the motor vehicle after a reasonable number of attempts,
the manufacturer, within forty (40) days, shall:
(i) At the time of its receipt of payment of a reasonable
offset for use by the consumer, replace the motor vehicle
with a replacement motor vehicle acceptable to the consumer;
or
(ii) Repurchase the motor vehicle from the consumer or
lessor and refund to the consumer or lessor the full purchase
price or lease price, less a reasonable offset for use and
less a reasonable offset for physical damage sustained to
the vehicle while under the ownership of the consumer.
(B) The replacement or refund shall include payment of all
collateral and reasonably incurred incidental charges.
(2)
(A) The consumer shall have an unconditional right to choose
a refund rather than a replacement.
(B) At the time of such refund or replacement, the consumer,
lienholder, or lessor shall furnish to the manufacturer clear
title to and possession of the motor vehicle.
(3) The amount of reasonable offset for use by the consumer
shall be determined by multiplying the actual price of the new
motor vehicle paid or payable by the consumer, including any
charges for transportation and manufacturer-installed or agent-installed
options, by a fraction having as its denominator one hundred
twenty thousand (120,000) and having as its numerator the number
of miles traveled by the new motor vehicle prior to the time
the buyer first delivered the vehicle to the manufacturer, its
agent, or authorized dealer for correction of the problem that
gave rise to the nonconformity.
(1) Refunds shall be made to the consumer and lienholder of
record, if any, as their interests may appear.
(2) If applicable, refunds shall be made to the lessor and
lessee as follows:
(A) The lessee shall receive the lessee cost less a reasonable
offset for use; and
(B) The lessor shall receive the lease price less the aggregate
deposit and rental payments previously paid to the lessor
for the leased vehicle.
(b) If the manufacturer makes a refund to the lessor or lessee
pursuant to this subchapter, the consumer's lease agreement with
the lessor shall be terminated upon payment of the refund and
no penalty for early termination shall be assessed.
(c) If a replaced vehicle was financed by the manufacturer,
its subsidiary, or agent, the manufacturer, subsidiary, or agent
may not require the buyer to enter into any refinancing agreement
concerning a replacement vehicle that would create any financial
obligations upon the buyer beyond those of the original financing
agreement.
§ 4-90-408. Reimbursement of towing and rental costs.
Whenever a vehicle is replaced or refunded under this subchapter,
the manufacturer shall reimburse the consumer for necessary towing
and rental costs actually incurred as a direct result of the nonconformity.
§ 4-90-409. Option to retain use of vehicle.
A consumer has the option of retaining the use of any vehicle returned
under this subchapter until the time that the consumer has been
tendered a full refund or a replacement vehicle of comparable value.
§ 4-90-410. Presumption of reasonable attempts to repair
- Extension of time to repair in case of war, invasion, strike,
fire, flood, or natural disaster.
(a) A rebuttable presumption of a reasonable number of attempts
to repair is considered to have been undertaken to correct a nonconformity
if:
(1) The nonconformity has been subject to repair as provided
in § 4-90-406(a), but the nonconformity continues to exist;
(2) The vehicle is out of service by reason of repair, or
attempt to repair, any nonconformity for a cumulative total
of thirty (30) calendar days; or
(3) There have been five (5) or more attempts, on separate
occasions, to repair any nonconformities that together substantially
impair the use and value of the motor vehicle to the consumer.
(b)
(1) The thirty (30) calendar days in subdivision (a)(2) of
this section shall be extended by any period of time during
which repair services are not available as a direct result of
war, invasion, strike, fire, flood, or natural disaster.
(2) The manufacturer, its agent, or authorized dealer shall
provide or make provisions for the free use of a vehicle to
any consumer whose vehicle is out of service beyond thirty (30)
days by reason of delayed repair as a direct result of war,
invasion, strike, fire, flood, or natural disaster.
(c) The burden is on the manufacturer to show that the reason
for an extension under subsection (b) of this section was the
direct cause for the failure of the manufacturer, its agent, or
authorized dealer to cure any nonconformity during the time of
the event.
(a) A manufacturer, its agent, or authorized dealer may not
refuse to diagnose or repair any vehicle for the purpose of avoiding
liability under this subchapter.
(b)
(1) A manufacturer, its agent, or authorized dealer shall
provide a consumer with a written repair order each time the
consumer's vehicle is brought in for examination or repair.
(2) The repair order must indicate all work performed on the
vehicle, including examination of the vehicle, parts, and labor.
§ 4-90-412. Resale of returned nonconforming vehicle.
If a motor vehicle has been replaced or repurchased by a manufacturer
as the result of a court judgment, an arbitration award, or any
voluntary agreement entered into between a manufacturer and a consumer
that occurs after a consumer complaint has been investigated and
evaluated pursuant to this subchapter or a similar law of another
state, the motor vehicle may not be resold in Arkansas unless:
(1) The manufacturer provides the same express warranty the
manufacturer provided to the original purchaser, except that the
term of the warranty need only last for twelve thousand (12,000)
miles or twelve (12) months after the date of resale, whichever
occurs first; and
(2) The manufacturer provides a written disclosure, signed by
the consumer, indicating that the vehicle was returned to the
manufacturer because of a nonconformity not cured within a reasonable
time as provided by Arkansas law.
§ 4-90-413. Affirmative defenses.
It is an affirmative defense to any claim under this subchapter
that:
(1) The nonconformity, defect, or condition does not substantially
impair the use, value, or safety of the motor vehicle;
(2) The nonconformity, defect, or condition is the result of
an accident, abuse, neglect,or unauthorized modification or alteration
of the motor vehicle by persons other than the manufacturer, its
agent, or authorized dealer;
(3) The claim by the consumer was not filed in good faith; or
(4) Any other defense allowed by law that may be raised against
the claim.
(1) Any manufacturer doing business in this state, entering
into franchise agreements for the sale of its motor vehicles
in this state, or offering express warranties on its motor vehicles
sold or distributed for sale in this state, shall operate, or
participate in, an informal dispute settlement proceeding located
in the State of Arkansas which complies with the requirements
of this section.
(2) The provisions of § 4-90-406(b)(1) and (2) concerning
refunds or replacement do not apply to a consumer who has not
first used this informal proceeding before commencing a civil
action, unless the manufacturer allows a consumer to commence
an action without first using this informal procedure.
(3)
(A) The consumer shall receive adequate written notice from
the manufacturer of the existence of the procedure.
(B) Adequate written notice may include the incorporation
of the informal dispute settlement procedure into the terms
of the written warranty to which the motor vehicle does not
conform.
(b) The informal dispute procedure must be certified by the
Consumer Protection Division of the Office of the Attorney General
as meeting the following criteria:
(1) The informal dispute procedure must comply with the minimum
requirements of the Federal Trade Commission for informal dispute
settlement procedures as set forth in 16 C.F.R. § 703.1
et seq., as in effect on the date of adoption of this subchapter,
unless any provision of 16 C.F.R. § 703.1 et seq. is in
conflict with this subchapter, in which case the provisions
of this subchapter shall govern;
(2) The informal dispute procedure must prescribe a reasonable
time, not to exceed thirty (30) days after the decision is accepted
by the buyer, within which the manufacturer or its agent must
fulfill the terms of its decisions;
(3)
(A) No documents shall be received by any informal dispute
procedure unless those documents have been provided to each
of the parties in the dispute at or prior to the proceeding,
with an opportunity for the parties to comment on the documents
either in writing or orally.
(B) If a consumer is present during the informal dispute proceeding,
the consumer may request postponement of the proceeding meeting
to allow sufficient time to review any documents presented
at the time of the meeting which had not been presented to
the consumer prior to the time of the meeting;
(4)
(A) The informal dispute procedure shall allow each party
to appear and make an oral presentation within the State of
Arkansas unless the consumer agrees to submit the dispute
for decision on the basis of documents alone or by telephone,
or unless the party fails to appear for an oral presentation
after reasonable prior written notice.
(B) If the consumer agrees to submit the dispute for decision
on the basis of documents alone, then the manufacturer or
dealer representatives may not participate in the discussion
or decision of the dispute;
(5) Consumers shall be given an adequate opportunity to contest
a manufacturer's assertion that a nonconformity falls within
intended specifications for the vehicle by having the basis
of the manufacturer's claim appraised by a technical expert
selected and paid for by the consumer prior to the informal
dispute settlement hearing;
(6) A consumer may not be charged with a fee to participate
in an informal dispute procedure; and
(7) Any party to the dispute has the right to be represented
by an attorney in an informal dispute proceeding.
(c)
(1)
(A) The informal dispute procedure shall annually submit
a pool of not less than six (6) members who are appointed
with the advice and consent of the Consumer Protection Division
of the Office of the Attorney General.
(B) Selected strictly by rotation, one (1) member shall hear
disputes scheduled for a particular session unless the consumer
requests a panel of three (3) members, in which case three
(3) members shall hear disputes scheduled for a particular
three-member session.
(C) If the informal dispute procedure deems it appropriate
to require the services of an independent investigator, such
investigator shall be selected from a pool of not less than
four (4) members who are appointed annually with the advice
and consent of the Consumer Protection Division of the Office
of the Attorney General and from which the particular investigator
shall be selected strictly by rotation.
(2) Upon notification to the administrator of any informal
dispute procedure that a determination has been made by the
Consumer Protection Division of the Office of the Attorney General
that a member of any pool is not conforming to standards of
fairness and impartiality, that member shall be immediately
removed from the pool.
§ 4-90-415. Enforcement - Exclusivity - Costs and expenses.
(a) A consumer may bring a civil action to enforce this subchapter
in a court of competent jurisdiction.
(b) This subchapter does not limit the rights and remedies that
are otherwise available to a consumer under any applicable provisions
of law.
(c) A consumer who prevails in any legal proceeding under this
subchapter is entitled to recover as part of the judgment a sum
equal to the aggregate amount of costs and expenses, including
attorney's fees based upon actual time expended by the attorney,
determined by the court to have been reasonably incurred by the
consumer for or in connection with the commencement and prosecution
of the action.
§ 4-90-416. Time limitation for commencement of action.
(a) An action brought under this subchapter must be commenced
within two (2) years following the date the buyer first reports
the nonconformity to the manufacturer, its agent, or authorized
dealer.
(b) When the buyer has commenced an informal dispute settlement
procedure described in § 4-90-414, the two-year period specified
in subsection (a) of this section begins to run at the time the
informal dispute settlement procedure is being commenced.
§ 4-90-417. Deceptive trade practices.
A violation of any of the provisions of this subchapter shall be
deemed a deceptive trade practice under § 4-88-101 et seq.
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