Question & AnswerQ&A (Republic Act No. 10642)
Republic Act No. 10642 shall be known as the Philippine Lemon Law.
The policy is to promote full protection to the rights of consumers in the sale of motor vehicles against deceptive, unfair, or otherwise inimical business and trade practices.
A brand new motor vehicle refers to a vehicle constructed entirely from new parts, covered by a manufacturer's express warranty at the time of purchase, has never been sold or registered with the DOTC or an appropriate agency, and has never been operated on any highway of the Philippines or any foreign country.
It is the period ending twelve (12) months after the original delivery date of the brand new motor vehicle to the consumer or up to twenty thousand (20,000) kilometers of operation after delivery, whichever comes first. This is when the consumer can report any nonconformity and pursue rights under the Act.
The law excludes motorcycles, delivery trucks, dump trucks, buses, road rollers, trolley cars, street sweepers, sprinklers, lawn mowers, heavy equipment like bulldozers, payloaders, graders, forklifts, amphibian trucks, cranes, vehicles that run only on rails or tracks, and agricultural tractors, trailers and traction engines.
Nonconformity is any defect or condition that substantially impairs the use, value, or safety of a brand new motor vehicle, preventing it from conforming to the manufacturer or distributor's standards or specifications and cannot be repaired.
The consumer must notify the manufacturer, distributor, authorized dealer or retailer in writing of the unresolved complaint and intention to invoke Lemon Law rights, after at least four separate repair attempts for the same complaint within the Lemon Law rights period.
The consumer may either have the motor vehicle replaced with a similar or comparable vehicle or have the vehicle returned for a refund of the purchase price plus collateral charges, subject to a reasonable allowance for use deduction.
The Department of Trade and Industry (DTI) has exclusive and original jurisdiction over disputes arising from the Act.
Disputes shall be settled through mediation, arbitration (if both parties agree), or adjudication administered by the DTI if arbitration is not undertaken.
The manufacturer, distributor, authorized dealer or retailer shall pay a minimum of One hundred thousand pesos (P100,000.00) in damages to the aggrieved party.
It is twenty percent (20%) per annum deduction from the purchase price, or the product of the kilometers traveled times the purchase price divided by 100,000 kilometers, whichever is lower.
They must attend to the complaints including making repairs and taking actions to make the vehicle conform to standards or specifications of the manufacturer or distributor.
The DOTC and other agencies, political subdivisions, LGUs, and government-owned or controlled corporations shall assist the DTI as required for effective implementation.
It took effect fifteen (15) days after its publication in the Official Gazette or a newspaper of general circulation.