The Philippine Lemon Law (Republic Act 10642)

SEC. 7. Availment of Lemon Law Rights. – Subsequent to filing the notice of availment referred to
in the preceding section, the consumer shall bring the vehicle to the manufacturer, distributor,
authorized dealer or retailer from where the vehicle was purchased for a final attempt to address
the complaint of the consumer to his or her satisfaction.

It shall be the duty of the manufacturer, distributor, authorized dealer or retailer, upon receipt of
the motor vehicle and the notice of nonconformity required under Section 6 hereof, to attend to
the complaints of the consumer including, as may be necessary, making the repairs and
undertaking such actions to make the vehicle conform to the standards or specifications of the
manufacturer, distributor, authorized dealer or retailer for such vehicle.

In case the nonconformity issue remains unresolved despite the manufacturer, distributor,
authorized dealer or retailer’s efforts to repair the vehicle, pursuant to the consumer’s availment
of his or her Lemon Law rights, the consumer may file a complaint before the DTI as provided for
under this Act: Provided, however, That if the vehicle is not returned for repair, based on the same
complaint, within thirty (30) calendar days from the date of notice of release of the motor vehicle
to the consumer following this repair attempt within the Lemon Law rights period, the repair is
deemedsuccessful: Provided, finally, That, in the event that the nonconformity issue still exists or
persists after the thirty (30)-day period but still within the Lemon Law rights period, the consumer
may be allowed to avail of the same remedies under Sections 5 and 6 hereof.

To compensate for the non-usage of the vehicle while under repair and during the period of
availment of the Lemon Law rights, the consumer shall be provided a reasonable daily
transportation allowance, an amount which covers the transportation of the consumer from his or
her residence to his or her regular workplace or destination and vice versa, equivalent to air-
conditioned taxi fare, as evidenced by official receipt, or in such amount to be agreed upon by the
parties, or a service vehicle at the option of the manufacturer, distributor, authorized dealer or
retailer. Any disagreement on this matter shall be resolved by the DTI.

Nothing herein shall be construed to limit or impair the rights and remedies of a consumer under
any other law.
It only covers motor vehicles. A motor vehicle refers to any self-propelled, four (4) wheeled
road vehicle designed to carry passengers, including, but not limited to, sedans, coupes, station
wagons, convertibles, pick-ups, vans, sports utility vehicles (SUVs) and Asian Utility Vehicles
(AUVs).

It covers only brand new motor vehicles purchased in the Philippines reported by a consumer
to be in nonconformity with the vehicle’s manufacturer or distributor’s standards or
specifications within the Lemon Law rights period. It obviously doesn’t apply to second-hand
vehicles and to brand-new vehicles purchased abroad.

A motor vehicle is “brand new” if it satisfies ALL of the following criteria: (1) it is constructed
entirely from new parts; (2) it is covered, at the time of purchase, by a manufacturer’s express
warranty that it has never been sold or registered with the Department of Transportation and
Communications (DOTC) or an appropriate agency or authority, and has never been operated on
any highway of the Philippines, or in any foreign state or country.

What is the “Lemon Law rights period”?

It is the period ending 12 months after the date of the original delivery of a brand new motor
vehicle to a consumer or the first 20,000 kilometers of operation after such delivery, whichever
comes first. This is the period during which the consumer can report any nonconformity and pursue
any right as provided under the Philippine Lemon Law.

Nonconformity refers to any defect or condition that substantially impairs the use, value or safety
of a brand new motor vehicle which prevents it from conforming to the manufacturer’s or
distributor’s standards or specifications, which cannot be repaired.
Does the Lemon Law cover every nonconformity?

No. Any defect or condition resulting from the following causes are excluded:

1. Noncompliance by the consumer of the obligations under the warranty;

2. Modifications not authorized by the manufacturer, distributor, authorized dealer or retailer;

3. Abuse or neglect of the brand new motor vehicle; and

4. Damage to the vehicle due to accident or force majeure.

When can a consumer invoke his/her rights under the Lemon Law?

Consumers cannot immediately invoke his/her rights. Yes, the consumer can (and must) invoke
the rights at any time within the “Lemon Law rights period,” but there must be AT LEAST four
(4) separate repair attempts. You’ve heard it right — only when the nonconformity issue remains
unresolved after four SEPARATE repair attempts can the consumer invoke his/her rights. And the
repairs must be made by the SAME manufacturer, distributor, authorized dealer or retailer for the
SAME complaint. [See also Steps in Availing of Consumer Rights under the Philippine Lemon
Law

After 4 repairs, can the consumer already complain with the DTI?

Not yet. The consumer must give the manufacturer, distributor, authorized dealer or retailer a
Notice of Availment of Lemon Law Rights. The written notice must contain the unresolved
complaint and the consumer’s intention to invoke his/her rights under the Lemon Law.
After the written notice, can the consumer already complain with the DTI?

Not so fast. The consumer must bring the vehicle to the manufacturer, distributor, authorized dealer
or retailer from where the vehicle was purchased for a final attempt to address the complaint of
the consumer to his or her satisfaction. The consumer can proceed to the DTI if the nonconformity
issue remains unresolved despite the manufacturer, distributor, authorized dealer or retailer’s
efforts to repair the vehicle.

There’s an interesting provision regarding the scenario when the consumer does not return the
vehicle for repair, based on the same complaint, within thirty (30) calendar days from the date
of notice of release of the motor vehicle to the consumer following this repair attempt within the
Lemon Law rights period. The effect? The repair is deemed successful. The next sentence,
however, provides that in the event that the nonconformity issue still exists or persists after the
thirty (30)-day period but still within the Lemon Law rights period, the consumer may be allowed
to avail of the same remedies.

This could mean a number of things. It could mean that if the vehicle is not brought for repairs
within 30 days, there is a PRESUMPTION that the repair was successful. All presumptions,
however, may be overturned by proof to the contrary. In other words, the consumer may still prove
that the repair was not successful, or the vehicle is defective, even beyond the 30-day period. Does
this mean that there is a shifting of the burden of proof? Or does the burden of proof is always
with the consumer (he who alleges must prove)? It would be interesting to see how the IRR spells
out the implications of the 30-day period.

Take note, however, that before availing of the Lemon Law rights mentioned in the preceding
paragraph, the manufacturer, distributor, authorized dealer or retailer is given four (4) separate
opportunities to repair the motor vehicle for each complaint. (Sec. 5, Id.) Thus, the consumer
must first return the vehicle for repair at least four (4) times before invoking his Lemon Law
right. In order to constitute one repair attempt, the vehicle must be returned again for repair for
the same complaint within 15 days from release. This directive is in line with implementing
rules, which state that if the vehicle is not returned within fifteen (15) days after release
following a repair attempt, the repair is deemed accepted (Sec. 2, DTI DAO No. 14-3, S. 2014).

Can the consumer go to courts?

For disputes arising from the provisions of the Lemon Law, exclusive and original jurisdiction is
exercised by the DTI. Regular courts have no jurisdiction, which means that Lemon Law disputes,
if filed in regular courts, will be dismissed.
What are the remedies to consumers?

In case of nonconformity, and there is a finding to such effect by the DTI, the manufacturer,
distributor, authorized dealer or retailer shall be given the following options:

1. Replacement. The motor vehicle shall be replaced with a similar or comparable motor vehicle
in terms of specifications and values, subject to availability. Comparable motor vehicle refers to a
motor vehicle that is identical or reasonably equivalent to the motor vehicle to be replaced, in terms
of specifications and values, subject to availability, as the motor vehicle existed at the time of
purchase.

2. Repurchase. The manufacturer, distributor, authorized dealer or retailer shall accept the return
of the motor vehicle and pay the consumer the purchase price plus the collateral charges. Collateral
charges refer to the fees paid’ to the Land Transportation Office (LTO) for the registration of a
brand new motor vehicle and other incidental expenses such as, but not limited to, the cost of
insurance pertaining to the vehicle, chattel mortgage fees and interest expenses if applicable.