Exercise 11

Carlos purchased a new Cadillac from a local dealer. He bought the car for himself and his traveling sales business because he believed Cadillac’s advertisement, which claimed that "for more than nine decades Cadillac has been a leader in quality and technical innovation." Carlos expected the vehicle to be reliable and comfortable for business travel. However, in the first nine months of ownership, the car required numerous repairs and was out of service for nearly a month. Consequently, Carlos concluded his new car was a "lemon." He promptly notified the dealer of the continuing problems with the Cadillac. The dealer was given numerous opportunities to repair the reported defects, but was only partially successful. When the dealer refused to either continue repairs, replace the vehicle, or allow Carlos to return the car for a refund of the purchase price, Carlos sued the dealer claiming the Cadillac’s condition did not conform to its express warranties—even after multiple repairs—and that the dealer had violated the Motor Vehicle Quality Assurance Act.

How should the judge rule?

A. For Carlos, because the car was a lemon: The defects substantially impaired Carlos’s use of the car and its market value.

ANSWER "A" IS NOT CORRECT. Please try again.

B. For the dealer, because Carlos was not a consumer.

ANSWER "B" IS CORRECT. New Mexico’s “Lemon Law” applies only to consumers; that is, individuals who purchase a vehicle for personal, family, or household use. In this case, Carlos purchased the car for his personal use and his business travel. Because Carlos did not purchase the car for personal, family, or household use, he is not a consumer and therefore cannot recover damages under this Act. (Note, however, that Carlos may have been able to bring a successful suit under the Unfair Practices Act.)