The ‘Lemon Law’ or Republic Act 10642 protect consumers who buy brand new cars that are non-conforming [defective]. The word ‘lemon’ has been used since 1909 to describe defective products or item that has lower value than meets the eye. In 1923, due to its unpleasant taste, lemon became associated with defective cars. Under Section 3 [h], the buyer can demand repair or part replacement of ‘lemon car’ within 12 months or 20,000 kilometers of operation from delivery, whichever comes first. This is known as the ‘lemon law rights period’. Non-conformity is defined in Section 3 [k] as any defect or condition that substantially impairs the use, value or safety of a brand new motor car that cannot be repaired. Section 7 entitles the consumer to daily transportation allowance of air-conditioned taxi fare while the car is under repair.
While Section 5 of R.A. 10642 gives the manufacturer or dealer four [4] separate repair attempts to resolve the non-conformity issue before the consumer may invoke the lemon rights, yet Article 100 of Republic Act No. 7394 or the Consumer Act, provides that “if imperfection of the product cannot be corrected within 30 days, the consumer may alternatively demand for the replacement of the unit or immediate reimbursement of the amount paid, without prejudice to any losses and damages. The different periods provided in the two laws give rise to questions on which law shall prevail; will the exercise of one remedy bar the other remedies [making it exclusive]; or two remedies can be exercised [alternate] and are the two laws conflicting?
Our Honorable Supreme Court ruled the issues in Department of Trade and Industry [DTI] v. Toyota Balintawak, Inc. [TBI] and Toyota Motor Philippines Corp. [TMPC] in G.R. 254978-79 that was uploaded on September 25, 2024. In this case, Marilou Tan bought a Toyota Fortuner in 2016. While driving home after the purchase, a jerky movement was noticed whenever the transmission changed gears. After mechanical inspection, the transmission assembly needs to be replaced and the Engine Control Unit reprogrammed at no extra cost. Marilou refused, demanding the car replacement or refund of her payment under the Consumer Act. Toyota argued that under Lemon Law, it is allowed to make up to four repair attempts before replacing the vehicle. An administrative suit was filed at the DTI that ruled in favor of Marilou. It ordered Toyota to replace the car or to reimburse the consumer and to pay a fine of P240,000. Toyota went to the Court of Appeals. It reversed the DTI for having acted with grave abuse of discretion. It held that there is a conflict between the two laws. The Lemon Law governs new cars while Consumer Law applies to consumer products. The DTI brought the issue to the Supreme Court.
While acknowledging that the case had been resolved due to the repair of the vehicle, the Court took the opportunity to settle the issue to guide future disputes. It held that the Lemon Law is not an exclusive remedy. There is nothing that prevents a consumer from availing of the remedies under RA 7394 [Consumer Act] or any other law for that matter even if the subject of the complaint is a brand new vehicle. RA 10642 [Lemon Law] is an alternative remedy granted to the consumer and the consumer is free to choose to enforce his or her rights under RA 7394 or any other law. A reading of the foregoing laws reveals that both provide for consumer remedies should they purchase defective goods or services [RA 7394] or brand-new motor vehicles [RA 10642]. The CA opined that the laws are repugnant with one another since RA. 7394 gives the supplier 30 days to correct the imperfection of the goods before the consumer can invoke his rights under the same act, while RA 10642 gives the manufacturer, distributor,
authorized dealer or retailer at least four separate repair attempts to resolve the non-conformity.
Our Supreme Court ruled that the CA opinion is wrong. There is no irreconcilable conflict since the last paragraph of Section 7 of RA 10642 is clear that nothing herein shall be construed to limit or impair the rights and remedies of a consumer under any other law. There is nothing that prevents a consumer from availing the remedies under RA 7394 or any other law for that matter, even if the subject of the complaint is a brand new vehicle.
Thus, the Court agrees with the position taken by the DTI Secretary, wherein RA 10642 is an alternative remedy granted to the consumer, who is free to choose to enforce his rights under RA 7394 or any other law. In effect, the remedies given to consumers by different laws is not exclusive, but rather cumulative.
