5001. Definitions. As
used in this chapter:
"Consumer" means the purchaser, other than for
purposes of resale, of an automobile; a person to whom an
automobile is transferred during the duration of an express
warranty applicable to the automobile; or any other person
entitled by the terms of the warranty to enforce the obligations
of the warranty.
(2) "Dealer" means a person actively engaged in the
business of buying, selling or exchanging automobiles at retail
and who has an established place of business.
(3) "Manufacturer" means a person engaged in the
business of manufacturing, assembling or distributing
automobiles, who will, under normal business conditions during
the year, manufacture, assemble or distribute to dealers at
least 10 new automobiles.
(4) "Manufacturer's express warranty" or
"warranty" means the written warranty of the
manufacturer of a new automobile of its condition and fitness
for use, including any terms or conditions precedent to the
enforcement of obligations under that warranty.
(5) "Automobile" means any passenger motor vehicle,
except motorcycles, which is leased or bought in Delaware or
registered by the Division of Motor Vehicles in the Department
of Public Safety except the living facilities of motor homes.
(6) "Nonconformity" means a defect or condition which
substantially impairs the use, value or safety of an automobile.
(7) "Lien" means a security interest in an automobile.
(8) "Lien holder" means a person with a security
interest in an automobile pursuant to a lien.
5002. Duty to repair nonconforming automobiles.
a new automobile does not conform to the manufacturer's express
warranty, and the consumer reports the nonconformity to the
manufacturer or its agent or dealer during the term of the
warranty or during the period of 1 year following the date of
original delivery of an automobile to the consumer, whichever is
earlier, the manufacturer shall make, or arrange with its dealer
or agent to make, within a reasonable period of time, all
repairs necessary to conform the new automobile to the warranty,
notwithstanding that the repairs or corrections are made after
the expiration of the term of the warranty or the 1-year period.
5003. Remedies upon failure to repair.
If the manufacturer, its agent or its authorized dealer does not
conform the automobile to any applicable express warranty by
repairing or correcting any nonconformity after a reasonable
number of attempts, the manufacturer shall either replace the
automobile with a comparable new automobile acceptable to the
consumer or repurchase the automobile from the consumer and
refund to the consumer the full purchase, including all credits
and allowances for any trade-in vehicle; provided, however, that
the consumer shall have the unqualified right to decline a
replacement automobile and to demand instead a repurchase.
(b) In instances in which an automobile is replaced by a
manufacturer under this section, said manufacturer shall accept
return of the automobile and reimburse the consumer for any
incidental costs, including dealer preparation fees, fees for
transfer of registration, sales taxes or other charges or fees
incurred by the consumer as a result of such replacement. In
instances in which an automobile which was financed by the
manufacturer or its subsidiary or agent is replaced under this
section, said manufacturer, subsidiary or agent shall not
require the consumer to enter into any refinancing agreement for
a replacement automobile which would create any financial
obligations upon such consumer beyond those created by the
original financing agreement.
(c) In instances in which a refund is tendered under this
section, the manufacturer shall accept return of the automobile
from the consumer and shall reimburse the consumer for related
purchase costs, including sales taxes, registration fees and
dealer preparation fees, less:
A reasonable allowance for the consumer's use of the automobile,
not to exceed the full purchase price of the automobile
multiplied by a fraction which consists of the number of miles
driven before the consumer first reported the nonconformity to
the manufacturer, its agent or dealer divided by 100,000 miles;
(2) A reasonable allowance for damage not attributable to normal
wear and tear, but not to include damage resulting from a
Refunds shall be made to the consumer, and lien holder, if any,
as their interests may appear.
(e) No authorized dealer shall be held liable by the
manufacturer for any refunds or automobile replacements in the
absence of evidence indicating that dealership repairs have been
carried out in a manner inconsistent with the manufacturer's
It shall be presumed that a reasonable number of attempts have
been undertaken to conform a new automobile to the
manufacturer's express warranty if, within the warranty term or
during the period of 1 year following the date of original
delivery of the motor vehicle to a consumer, whichever is the
Substantially the same nonconformity has been subject to repair
or correction 4 or more times by the manufacturer, its agents or
its dealers and the nonconformity continues to exist; or
(2) The automobile is out of service by reason of repair or
correction of a nonconformity by the manufacturer, its agents or
its dealers for a cumulative total of more than 30 calendar days
since the original delivery of the motor vehicle to the
consumer. This 30-day limit shall commence with the first day on
which the consumer presents the automobile to the manufacturer,
its agent or dealer for service of the nonconformity and a
written document describing the nonconformity is prepared by the
manufacturer, its agent or dealer. The 30-day limit shall be
extended only if repairs cannot be performed due to conditions
beyond the control of the manufacturer, its agents or its
dealers, including war, invasion, strike, fire, flood or other
The presumption provided in this section shall not apply against
a manufacturer unless the manufacturer has received prior direct
written notification from or on behalf of the consumer and has
had an opportunity to repair or correct the nonconformity;
provided, however, that if the manufacturer does not directly
attempt or arrange with its dealer or agent to repair or correct
the nonconformity, the manufacturer may not defend a claim by a
consumer under this chapter on the ground that the agent or
dealer failed to properly repair or correct the nonconformity or
that the repairs or corrections made by the agent or dealer
caused or contributed to the nonconformity.
5005. Costs and attorney's fees in breach of warranty actions.
any court action brought under this chapter by a consumer
against the manufacturer of an automobile, or the manufacturer's
agent or authorized dealer, based upon the alleged breach of an
express warranty made in connection with the sale of such
automobile, the court, in its discretion, may award to the
plaintiff his costs and reasonable attorney's fees or, if the
court determines that the action is brought in bad faith or is
frivolous in nature, may award reasonable attorney's fees to the
5006. Affirmative defense to claim.
shall be an affirmative defense to a claim under this chapter
that the alleged nonconformity does not substantially impair the
use, value or safety of the new automobile or that the
nonconformity is the result of abuse or neglect or of
unauthorized modifications or alterations of the new automobile
by anyone other than the manufacturer, its agent or dealer.
5007. Informal dispute settlement procedure.
If a manufacturer has established an informal settlement
procedure that has a certificate of approval by the Division of
Consumer Protection, the remedies provided by this chapter shall
not be available to any consumer who has not first resorted to
such procedure. In the event a manufacturer's informal dispute
settlement procedure does not have a certificate of approval
from the Division of Consumer Protection, a consumer may
immediately and directly seek the remedies provided by this
(b) The Division of Consumer Protection shall annually evaluate
the operation of informal dispute settlement procedures
established by manufacturers and shall issue an annual
certificate of approval to those manufacturers whose procedures
comply with Title 16, Code of Federal Regulations, Part 703 and
with subsections (c), (d) and (e) of this section. The Division
of Consumer Protection shall suspend the certification of, or
decertify, any informal dispute settlement which no longer
complies with said provisions.
(c) Any manufacturer who has established an informal settlement
procedure shall file with the Division of Consumer Protection a
copy of each decision of the informal dispute settlement
procedure within 30 days after the decision is rendered.
(d) In order to obtain the certification of the Division of
Consumer Protection, a manufacturer's informal dispute
settlement procedure shall not convene any informal dispute
settlement hearing or meeting outside the State and shall
refrain from any practices which:
Delay a decision in any dispute beyond 65 days after the date on
which the consumer initially resorts to the informal dispute
settlement procedure by written notification that a dispute
(2) Delay performance of remedies awarded in a settlement beyond
30 days after receipt of notice of the consumer's acceptance of
the decision; provided, however, that such time limits shall not
include periods of time when the consumer or the consumer's car
is unavailable for the remedies specified in the settlement; or
(3) Require the consumer to make the automobile available more
than once for inspection by a manufacturer's representative or
more than once for repair of the same nonconformity; or
(4) Fail to consider in decisions any remedies provided by this
chapter, such remedies to include:
Repair, replacement and refund;
b. Reimbursement for related purchase costs; or
Require the consumer to take any action or assume any obligation
not specifically authorized under the provisions of Title 16,
Code of Federal Regulations, Part 703.
A manufacturer desiring annual certification of an informal
dispute settlement procedure shall make application to the
Division of Consumer Protection on forms developed by, and shall
provide such information as required by, the Division of
5008. Remedies cumulative.
in this chapter shall in any way limit the rights or remedies
available to a consumer under Subtitle I of this title.
addition to any remedies the consumer may have at law or in
equity, a violation of this chapter shall be an unlawful
practice as defined in § 2513 of this title. The Division of
Consumer Protection shall promulgate rules and regulations in
order to implement the purposes of this chapter.