Missouri’s Lemon Law: Protecting Drivers From Sour Warranty Deals

What is the purpose of Missouri’s Lemon Law and who does it protect?

The Missouri New Vehicles Warranty Law, more commonly known as the “Lemon Law,” protects buyers of new vehicles by enforcing the manufacturer’s express warranty. Missouri’s Lemon Law does not apply to used cars, motorcycles, mo-peds, and off-road vehicles. Rather, the law covers all new vehicles sold or leased with warranty provisions.

Consumers who are protected under Missouri’s Lemon Law include: (1) the purchaser of a new motor vehicle primarily used for personal or household purposes; (2) any person to whom the new motor vehicle is transferred for the same purposes during the duration of an express warranty applicable to the new motor vehicle; and (3) any other person entitled by the terms of the warranty to enforce its obligations. For more information, click here.

I am covered by Missouri’s Lemon Law and my new vehicle has a defect. What is my next step?

Report it to the manufacturer as soon as possible! Under Missouri’s Lemon Law, owners of new vehicles are responsible for reporting problems or defects in writing to the manufacturer. Following the complaint, the manufacturer must be given a “reasonable” number of attempts to correct the problem. Missouri’s Lemon Law states this requirement is met if (1) the vehicle has been in the repair shop for the same problem four or more times and the problem still exists, or (2) the vehicle has been out of service because of a problem covered by warranty for 30 or more working days since the delivery of the vehicle.

I’ve reported the defect, but the manufacturer is unable to fix my car. How will I be reimbursed?

If the reported problem cannot be fixed in a reasonable number of repair attempts the manufacturer has the option to either offer the consumer a cash refund or a vehicle of comparable value. Under the Lemon Law in Missouri, manufacturers are permitted to deduct a “reasonable allowance for the consumer’s use of the vehicle” from the refund. Missouri law also requires that a replacement vehicle must be acceptable to the consumer. Additionally, Missouri law provides that the warranty of a new vehicle with reported problems may be extended if the manufacturer has not repaired the new vehicle by the expiration of the applicable time period. For additional information, click here.

After several attempts to fix my vehicle’s defect, the manufacturer and I disagree about whether my car conforms to warranty and whether I should receive a refund. What options do I have to resolve this dispute?

If the manufacturer provides a reasonable number of attempts and indicates that it doesn’t believe the consumer is owed a refund, but the consumer still believes the vehicle does not conform to warranty, the consumer must submit a complaint to the manufacturer. Most auto manufacturers in Missouri have appeals procedures, often with arbitration boards, to resolve problems consumers have with the manufacturer or car dealership. Throughout the dispute procedure, the manufacturer is permitted to make a settlement offer, which the consumer may accept or reject. If a consumer resorts to an informal dispute settlement procedure, an action must be commenced within 90 days following the procedure’s final action.

If the consumer rejects the settlement offer, he may commence a court action against the manufacturer or dealer (1) within the earlier of six months following expiration of the express warranty, or (2) 18 months following the date of the vehicle’s original delivery to the consumer. The consumer is allowed to recover a sum equal to the aggregate amount of costs and expenses incurred, including attorney’s fees, if he prevails.

On the other hand, if the court determines that the claim was filed in bad faith or solely for the purpose of harassment, then the consumer will be liable for all costs and reasonable attorney’s fees incurred by the manufacturer. Missouri’s Lemon Law allows several affirmative defenses for the dealers and manufacturers of new vehicles including: (1) an alleged nonconformity does not substantially impair the use, market value, or safety of a motor vehicle; (2) a nonconformity is the result of abuse, neglect, or unauthorized modifications or alterations of a motor vehicle; (3) a claim by a consumer was not made in good faith; and (4) any other affirmative defense allowed by law.

Consumer Tips Regarding Missouri’s Lemon Law:

  1. If you suspect your new vehicle has a defect, report it to the manufacturer as soon as possible!
  2. If a defect in your new car has been “fixed” but you believe problems still exist, do not hesitate to report the defect to the car’s manufacturer again.
  3. Do not settle for less than what you are guaranteed in your warranty! There are appeals processes if you and the car manufacturer disagree about a defect. Know your rights as the owner of a new vehicle!

Center for Dispute Resolution at University of Missouri

Campus Free Speech Issues and Dispute Resolution 

Although the free exchange of ideas is fundamental to every university’s mission, events on many of our nation’s campuses in recent years vividly demonstrate that preserving and promoting this principle in a university community presents enormous challenges. Members of the CSDR at the University of Missouri have had to deal with this type of conflict at a different level. In 2015, we were touched closely by events such as the shooting of Michael Brown by a police officer in Ferguson, Mo., a number of racially motivated incidents on our own campus, and the protests by students following those incidents, which, in turn, resulted in the resignations of high-profile campus leaders.

While perhaps Missouri played the role of the proverbial “canary in the coal mine,” confrontations like the one we experienced in 2015 soon emerged in other campuses across the U.S. Opposing narratives developed describing these events. One narrative portrays today’s students as hypersensitive and intolerant as they seek protections against offensive words and ideas, which results in the sacrifice of both intellectual rigor and First Amendment values. A counter-narrative posits that the rise in verbal abuse and violence against historically persecuted groups requires the prohibition or limitation of hateful, intolerant, or threatening speech on our campuses, as learning becomes impossible in an environment where members of the community feel unsafe.

Motivated by those experiences, Prof. Robert Jerry, who served as the dean of the law schools at the University of Florida and the University of Kansas for a combined total of 16 years, and who teaches and writes in dispute resolution among other subjects, and Prof. Chris Wells, who is one of the leading First Amendment scholars in the country and teaches in the dispute resolution area, have organized the 2017 CSDR/Journal of Dispute Resolution Symposium along this topic. The symposium, which is titled “The First Amendment on Campus: Identifying Principles for Best Practices for Managing and Resolving Disputes,” will explore the complex intersection between free expression and conflict at universities.

In what is likely a first-of-its-kind-effort, the program will bring together free speech scholars, dispute resolution experts, and university leaders with experience with free expression conflict, with the goal of advancing our understanding of how university leaders can remain true to both the mission of the university and the values of the First Amendment.

The timing of the symposium is particularly propitious for us, as it coincides with the arrival of our new Dean Lyrissa Lidsky, who is also an expert in First Amendment Law and has written on the topic of campus speech issues.


Expanding Access to Justice through ODR 

At one time, transactions between merchants and consumers were often sealed with a handshake. This handshake was more than a kind gesture—it helped reassure both parties that the other was committed to the deal and would correct any problems. As more transactions occur online, finding fair and efficient resolution of problems that arise can be challenging. In her new book with Colin Rule of Tyler Technologies, Prof. Amy J. Schmitz argues that using technology to enhance access to remedies is in the best interest of both retailers and consumers. In their book, The New Handshake: Online Dispute Resolution and the Future of Consumer Protection, Schmitz and Rule propose a design for this using Online Dispute Resolution (ODR) to establish a new virtual handshake for the online world. Their proposed process uses a single platform that merchants and consumers would access to resolve disputes. The platform would have a single set of guidelines, would abide by agreed due process standards, and would include means for alerting regulators regarding suspected fraud or unsafe products. It would utilize forward thinking encryption and coding to ensure privacy and coordinate with other consumer remedy processes throughout the world. Indeed, the EU has established its own ODR platform, UNCITRAL has pursued global ODR, and new ODR programs continually emerge in the wake access to justice movements.

The proposal is a collaboration between Schmitz, a consumer advocate and founder of MyConsumertips.info; and Rule, a high-tech entrepreneur who had directed ODR for eBay. In this way, the project aims to create a win-win for consumers and businesses. “Our goal is to rebuild trust in the business-to-consumer marketplace and provide a blueprint for the future of online consumer protection.” More information can be found at Newhandshake.org and Prof. Schmitz’s interview on the book can be heard here. A few comments on the book include: Corporate Counsel; ODR.INFO; Oxford Business Law Blog; Business Conflict Management LLC.


Making Stone Soup 

The Stone Soup Dispute Resolution Knowledge Project is designed to promote collaboration by faculty, students, scholars, practitioners, educational institutions, and professional associations to produce, disseminate, and use valuable qualitative data about actual dispute resolution practice.

Professors John Lande and Rafael Gely are the co-directors of the project, which grew out of the Center’s 2016 symposium, Moving Negotiation Theory from the Tower of Babel Toward a World of Mutual Understanding. Several symposium speakers criticized the current state of negotiation theory and argued that more empirical research about actual negotiations is needed to advance negotiation theory.

Faculty have multiple ways to participate in the project. For example, they may use their courses to generate knowledge about dispute resolution. As part of their course requirements, students may interview professionals and/or laypeople about actual cases. Some faculty may conduct “focus group classes” in which they systematically ask selected guest speakers about actual cases. Faculty may use these assignments and activities in a wide variety of courses including those that do not specifically or exclusively focus on dispute resolution.

The project encourages schools to take advantage of practitioners’ perspectives by conducting general debriefing of student competitions. Faculty may also take advantage of talks at continuing education programs to obtain data from practitioners. For more information, see law.missouri.edu/drle/stone-soup.

In this inaugural year of the project, it should engage at least 800 students in 48 classes covering 17 subjects, taught by 29 faculty from 24 schools in three countries.


Dispute Resolution Empirical Research 

Empirical research has long been a mainstay of dispute resolution scholarship, and the members of the CSDR continue to generate ground-breaking and influential work. Some recent work in this field was conducted by Prof. S.I. Strong in her article “Realizing Rationality: An Empirical Assessment of International Commercial Mediation,” 73 Washington and Lee Law Review 1973 (2016), which included the first-ever large-scale international study of international commercial mediation. Preliminary findings from that project were provided to the United Nations Commission on International Trade Law (UNCITRAL) to support efforts to adopt a new international instrument relating to the enforcement of settlement agreements arising out of commercial mediation.

Prof. Strong, with Prof. Rafael Gely, CSDR director, is currently working on a new project funded by a $25,000 grant from the American Arbitration Association-International Center for Dispute Resolution (AAA-ICDR) Foundation. The project seeks to expand the understanding of arbitrator reasoning in international commercial disputes by conducting a multi-phased empirical study. The first prong of the research involves a series of semi-structured interviews with leading arbitrators working in the area of national and international commercial arbitration so as to identify the goals arbitrators that are seeking to achieve when writing reasoned awards and how arbitrators believe they are fulfilling those aims. The second prong of the study involves an international survey of commercial arbitrators and judges. This material will seek to confirm information gleaned during the interviews and to identify additional supplemental material. The third prong is doctrinal in nature and involves an empirical analysis of publicly available arbitral awards gleaned from enforcement proceedings in court or published in arbitral reports and judicial decisions gleaned from case reports in the United States and elsewhere. After identifying the relevant awards and decisions, the materials will be coded for various attributes and analyze the data to determine whether there are any differences between national and international commercial awards on the one hand fully reasoned arbitral awards and judicial decisions on the other.

Prof. Gely is also undertaking a separate strand of empirical research looking at how is the arbitration process portrayed in the mainstream media. Motivated through a partnership with the National Academy of Arbitrators, Prof. Gely and his collaborators, and drawing from the work of scholars in communications and journalism, the research project is seeking to collect and analyze data taken from news reports about arbitration. The goal of the project is to better understand how the media is reporting about arbitration. A preliminary article discussing the research project (“What and How Journalists are Reporting About Arbitration”) was published in Proceedings of the Sixty-Ninth Annual Meeting of the National Academy of Arbitrators, Arbitration 2016: Arbitration in Practice.


More News 

Mizzou Law – CSDR • 206 Hulston Hall, Columbia, MO 65211

CFPB Rules

The CFPB is finally issuing its arbitration rule! I have not yet fully read the rule, but the substance seems to say the same as the proposed rule. It doesn’t make arbitration clauses unenforceable, just the use of arbitration clauses to preclude class actions.  Essentially, the press release read in part:


“Today’s rule prohibits banks and other consumer financial companies from including mandatory arbitration clauses that block group lawsuits in any new contracts after the compliance date. The rule does not bar arbitration clauses outright. For these new contracts, however, these clauses have to say explicitly that they cannot be used to stop consumers from banding together to pursue relief as a group. The rule includes the specific language that financial companies must use. By restoring the ability of consumers to file or join group lawsuits, the rule gives companies more incentive to comply with the law. And the deterrent effect of such cases can more broadly influence the business practices of other companies as well.

Our new rule also requires companies to submit their claims, awards, and other information about the arbitration of individual disputes to the Bureau. This will help us better monitor arbitrations to make sure the process is fair for individual consumers. The companies are required to scrub these materials of personal information, and starting in July 2019, we will also post them on our website. This will promote transparency and give consumers, providers, and other regulators more insight into how arbitration works. “


We do not know where this will lead but it is a new step in arbitration law.  Also, I again caution that the full rule is at:  http://files.consumerfinance.gov/f/documents/201707_cfpb_Arbitration-Agreements-Rule.pdf.


Congratulations to Professor Gely

This is not a usual “consumer tips” posting, but I wanted to share this good news about someone making a difference for workers and consumers!

My colleague at the University of Missouri, Rafael Gely, just received the David Petersen Award from the National Academy of Arbitrators.  Rafael directs our Center for the Study of Dispute Resolution and is a fabulous colleague and leader.  Here’s the announcement of the award, which is extremely well deserved:

The National Academy of Arbitrators conferred upon Rafael Gely the David Petersen Award at its annual meeting in Chicago, Illinois. The David Petersen Award recognizes and honors individuals who have given invaluable service to the Academy.


The Academy conferred the Petersen Award because of Professor Gely’s instrumental role in the startup and continual maintenance of arbitrationinfo.com, the neutral website which is a joint venture of the National Academy of Arbitrators and the University of Missouri School of Law.  Through Professor Gely’s work as an editor of the site, he has written content on a regular basis, designed and updated the site, supervised student assistants, and crucially connected with journals both before and after articles are written.  The Academy notes the creation of the website provided a source of information and education regarding arbitration for journalists, professionals, and the public. The Academy believes that the website has immeasurably improved the discourse and understanding of labor and employment arbitration in both United States and Canada.

The Newhandshake: Online Dispute Resolution and the Future of Consumer Protection

We used to buy goods and services in person.  We’d introduce ourselves, look each other in the eye, and negotiate the terms of the transaction.  If we thought it was a good deal, we’d seal it with a handshake.  That handshake was more than a kind gesture – it signaled that if any problem arose, both sides were committed to getting it resolved quickly and fairly.  That handshake was our personal trustmark.

Nowadays, it’s harder to close deals with a handshake.  We can buy items from all over the world with just a few swipes on our iPhones, but when problems arise (as they inevitably do) the next step is often unclear.  On the internet it is difficult, if not impossible, to tell the good merchants from the bad merchants, and the processes for resolving disputes are often confusing or hard to find.  Customer service can feel like a runaround (e.g. long hold times, unfair refund policies) and formal redress mechanisms that work in the face-to-face world, like the courts, are generally impractical for online purchases — especially when purchases are low value and cross several legal jurisdictions.

The New Handshake: Online Dispute Resolution and the Future of Consumer Protection focuses on this lack of trust and access to remedies for online transactions.  This groundbreaking book proposes a design for a “New Handshake” for the online world.  This New Handshake uses Online Dispute Resolution (ODR) to provide fast and fair resolutions for low-dollar claims, such as those in most B2C (Business-to-Consumer) contexts.  This revolutionary system is designed to operate independently of the courts, thereby eliminating procedural complexities and choice of law concerns.  Furthermore, it can be integrated directly into the websites where transactions take place. It would provide consumers with free access to remedies, while saving businesses from costs and complexities of court.  The New Handshake aims to rebuild trust in the B2C marketplace, and provide a blueprint for the future of online consumer protection.

This is not your typical “law” or “business” book.  Instead, is a collaborative effort of a business leader and a law professor.   The result is essential reading for:
Online merchants
Payment providers
Customer services
Law and business students
Consumer advocates
Policy makers
ODR systems designers
The New Handshake can be purchased on the ABA website here:

Pay to Play in Consumer Arbitration

Some companies that include predispute arbitration clauses in their contracts have refused to pay these arbitration costs as a defendant in consumer cases.  In the case of the AAA,  nonpayment of fees will result in the AAA refusing to administer the arbitration.  Additionally, consumer claimants in such cases can then raise the same dispute in court, arguing that the arbitration requirement no longer applies because of the defendant’s material breach.

Roach v. BM Motoring, LLC, 2017 WL 931430 (N.J. Mar. 9, 2017), provides an example of what happens when a defendant refuses to pay arbitration costs.  In that case, the New Jersey Supreme Court joined other courts that find the defendant’s refusal to pay arbitration costs waives the arbitration requirement by materially breaching the agreement. See e.g. Pre-Paid Legal Services, Inc. v. Cahill, 786 F.3d 1287 (10th Cir. 2015).  The defendant car dealership included an arbitration provision in its consumer contracts that required arbitration in accordance with AAA rules, but did not explicitly require arbitration before the AAA. Nonetheless, the defendant failed to pay the AAA’s filing fees and arbitrator compensation deposit when a consumer filed a complaint against the dealership with the AAA.   Indeed, the defendant ignored the AAA’s notices — leading the AAA to send  the parties a letter stating that because of this failure it would not administer the arbitration or any other consumer disputes involving the dealership.  The consumers then filed their claims in state court and the dealership moved to compel arbitration. The New Jersey Supreme Court concluded on appeal that the dealership was precluded from enforcing the arbitration agreement.

Confirmation of Pay to Play

The Roach court confirmed basic contract law:  when a party breaches a material term of an agreement, the non-breaching party is relieved of its obligations under the agreement. The court then concluded that the arbitration terms (by requiring use of AAA rules) permitted arbitration before the AAA, even if the AAA was not stated as the exclusive forum for the arbitration.  Accordingly,  the court would not disturb the consumers’ choice to arbitrate with the AAA. The dealership materially breached the agreement where the consumer paid the consumer’s filing fee and the dealer did not pay its fees.  Therefore, the consumers were then free to litigate their claims in court.