Newsletter
MOEA announced the amendment of "Mandatory and Prohibitory Provisions of Standard Contracts for Sales of Mobile Vehicles"
On January 28, the Ministry of Economic Affairs announced the amendment of the "Mandatory and Prohibitory Provisions of Standard Contracts for Sales of Mobile Vehicles" ("Amendment"). The Amendment shall become effective from July 1, 2021. The Amendment brings the spirit of America Lemon Law into the Standard Contract and sets forth that if a new vehicle has any material defect within at least 180 days upon the delivery or at least 12 thousand kilometers of driving (whichever occurs first), the consumer should be entitled to a replacement of the same model of vehicle (or vehicle with the same value) or rescind the agreement.
According to the Amendment, a material defect includes:
1) burning while driving;
2) sudden unintended acceleration, which cannot be fixed after 2 repair attempts;
3) brake failure, which cannot be fixed after 2 repair attempts;
4) car flameout while driving, which cannot be fixed after 2 repair attempts;
5) engine temperature rising to extreme, which cannot be fixed after 2 repair attempts; and
6) defects that might jeopardize health or safety, which cannot be fixed after 2 repair attempts.
In addition, a consumer can also request a replacement of the same model of vehicle (or vehicle with the same value) or rescind the agreement if a new vehicle has defects which cannot be fixed after certain repair attempts, including: 1) within at least 180 days upon the delivery or at least 12 thousand kilometers of driving a vehicle (whichever occurs first), such vehicle's normal function cannot be restored due to the same defect after 4 repair attempts by the vehicle maintenance plant as designated in the user manual; 2) within at least 180 days upon the delivery of a vehicle, and after the repair attempts by the vehicle maintenance plant as designated in the user manual, the accumulative time that such vehicle cannot be used normally reached 30 days or more due to functional defects. The accumulative time should exclude the period the consumer fails to collect the car after receiving notification. If a courtesy car or appropriate subsidy has been provided to the consumer for a period of time, such time should be excluded when calculating the accumulative time as well.
While the amendment enhances the protection of the consumers' right, it certainly impacts car manufacturers and distributors as well. The car industry should make proper arrangements to accommodate the amendment in order to mitigate any potential consumer disputes in the future.