HB4708 100TH GENERAL ASSEMBLY

LRB100 16738 JLS 31878 b

100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB4708

Introduced , by Rep. Sue Scherer

SYNOPSIS AS INTRODUCED:

815 ILCS 505/2L

Amends the Consumer Fraud and Deceptive Business Practices Act. Provides that the prohibition against the modification or disclaimer of an implied warranty of merchantability regarding certain motor vehicle components for 15 days after the retail sale of a used vehicle to a consumer by a licensed dealer does not apply to a vehicle sold at an auction that is open to the general public if the auction company has conducted a mechanical inspection of the vehicle and given notice of any defects to prospective purchasers. Effective immediately.

A BILL FOR

AN ACT concerning business.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Consumer Fraud and Deceptive Business Practices Act is amended by changing Section 2L as follows:

(815 ILCS 505/2L)

(Text of Section before amendment by P.A. 100-512)

Sec. 2L. Used motor vehicles; modification or disclaimer of implied warranty of merchantability limited.

(a) Any retail sale of a used motor vehicle made after July 1, 2017 (the effective date of Public Act 99-768) this amendatory Act of the 99th General Assembly to a consumer by a licensed vehicle dealer within the meaning of Chapter 5 of the Illinois Vehicle Code or by an auction company at an auction that is open to the general public is made subject to this Section.

(b) This Section does not apply to any of the following:

(1) a vehicle with more than 150,000 miles at the time of sale;

(2) a vehicle with a title that has been branded "rebuilt" or "flood";

(3) a vehicle with a gross vehicle weight rating of 8,000 pounds or more; or

(4) a vehicle that is an antique vehicle, as defined in the Illinois Vehicle Code, or that is a collector motor vehicle; or .

(5) a vehicle sold at an auction that is open to the general public, provided that the auction company has conducted a mechanical inspection of the vehicle and provided notice of any defects to the vehicle to prospective purchasers.

(b-5) This Section does not apply to the sale of any vehicle for which the dealer offers an express warranty that provides coverage that is equal to or greater than the limited implied warranty of merchantability required under this Section 2L.

(c) Except as otherwise provided in this Section 2L, any sale of a used motor vehicle as described in subsection (a) may not exclude, modify, or disclaim the implied warranty of merchantability created under this Section 2L or limit the remedies for a breach of the warranty hereunder before midnight of the 15th calendar day after delivery of a used motor vehicle or until a used motor vehicle is driven 500 miles after delivery, whichever is earlier. In calculating time under this Section, a day on which the warranty is breached and all subsequent days in which the used motor vehicle fails to conform with the implied warranty of merchantability are excluded. In calculating distance under this Section, the miles driven to obtain or in connection with the repair, servicing, or testing of a used motor vehicle that fails to conform with the implied warranty of merchantability are excluded. An attempt to exclude, modify, or disclaim the implied warranty of merchantability or to limit the remedies for a breach of the warranty in violation of this Section renders a purchase agreement voidable at the option of the purchaser.

(d) An implied warranty of merchantability is met if a used motor vehicle functions for the purpose of ordinary transportation on the public highway and substantially free of a defect in a power train component. As used in this Section, "power train component" means the engine block, head, all internal engine parts, oil pan and gaskets, water pump, intake manifold, transmission, and all internal transmission parts, torque converter, drive shaft, universal joints, rear axle and all rear axle internal parts, and rear wheel bearings.

(e) The implied warranty of merchantability expires at midnight of the 15th calendar day after delivery of a used motor vehicle or when a used motor vehicle is driven 500 miles after delivery, whichever is earlier. In calculating time, a day on which the implied warranty of merchantability is breached is excluded and all subsequent days in which the used motor vehicle fails to conform with the warranty are also excluded. In calculating distance, the miles driven to or by the seller to obtain or in connection with the repair, servicing, or testing of a used motor vehicle that fails to conform with the implied warranty of merchantability are excluded. An implied warranty of merchantability does not extend to damage that occurs after the sale of the used motor vehicle that results from:

(1) off-road use;

(2) racing;

(3) towing;

(4) abuse;

(5) misuse;

(6) neglect;

(7) failure to perform regular maintenance; and

(8) failure to maintain adequate oil, coolant, and other required fluids or lubricants.

(f) If the implied warranty of merchantability described in this Section is breached, the consumer shall give reasonable notice to the seller no later than 2 business days after the end of the statutory warranty period. Before the consumer exercises another remedy pursuant to Article 2 of the Uniform Commercial Code, the seller shall have a reasonable opportunity to repair the used motor vehicle. The consumer shall pay one-half of the cost of the first 2 repairs necessary to bring the used motor vehicle into compliance with the warranty. The payments by the consumer are limited to a maximum payment of $100 for each repair; however, the consumer shall only be responsible for a maximum payment of $100 if the consumer brings in the vehicle for a second repair for the same defect. Reasonable notice as defined in this Section shall include, but not be limited to:

(1) text, provided the seller has provided the consumer with a cell phone number;

(2) phone call or message to the seller's business phone number provided on the seller's bill of sale for the purchase of the motor vehicle;

(3) in writing to the seller's address provided on the seller's bill of sale for the purchase of the motor vehicle;

(4) in person at the seller's address provided on the seller's bill of sale for the purchase of the motor vehicle.

(g) The maximum liability of a seller for repairs pursuant to this Section is limited to the purchase price paid for the used motor vehicle, to be refunded to the consumer or lender, as applicable, in exchange for return of the vehicle.

(h) An agreement for the sale of a used motor vehicle subject to this Section is voidable at the option of the consumer, unless it contains on its face or in a separate document the following conspicuous statement printed in boldface 10-point or larger type set off from the body of the agreement:

"Illinois law requires that this vehicle will be free of a defect in a power train component for 15 days or 500 miles after delivery, whichever is earlier, except with regard to particular defects disclosed on the first page of this agreement. "Power train component" means the engine block, head, all internal engine parts, oil pan and gaskets, water pump, intake manifold, transmission, and all internal transmission parts, torque converter, drive shaft, universal joints, rear axle and all rear axle internal parts, and rear wheel bearings. You (the consumer) will have to pay up to $100 for each of the first 2 repairs if the warranty is violated.".

(i) The inclusion in the agreement of the statement prescribed in subsection (h) of this Section does not create an express warranty.

(j) A consumer of a used motor vehicle may waive the implied warranty of merchantability only for a particular defect in the vehicle, including, but not limited to, a rebuilt or flood-branded title and only if all of the following conditions are satisfied:

(1) the seller subject to this Section fully and accurately discloses to the consumer that because of circumstances unusual to the business, the used motor vehicle has a particular defect;

(2) the consumer agrees to buy the used motor vehicle after disclosure of the defect; and

(3) before the sale, the consumer indicates agreement to the waiver by signing and dating the following conspicuous statement that is printed on the first page of the sales agreement or on a separate document in boldface 10-point or larger type and that is written in the language in which the presentation was made:

"Attention consumer: sign here only if the seller has told you that this vehicle has the following problem or problems and you agree to buy the vehicle on those terms:

1. ......................................................

2. ..................................................

3. ...................................................".

(k) It shall be an affirmative defense to any claim under this Section that:

(1) an alleged nonconformity does not substantially impair the use and market value of the motor vehicle;

(2) a nonconformity is the result of abuse, neglect, or unauthorized modifications or alterations of the motor vehicle;

(3) a claim by a consumer was not filed in good faith; or

(4) any other affirmative defense allowed by law.

(l) Other than the 15-day, 500-mile implied warranty of merchantability identified herein, a seller subject to this Section is not required to provide any further express or implied warranties to a purchasing consumer unless:

(1) the seller is required by federal or State law to provide a further express or implied warranty; or

(2) the seller fails to fully inform and disclose to the consumer that the vehicle is being sold without any further express or implied warranties, other than the 15 day, 500 mile implied warranty of merchantability identified in this Section.

(m) Any person who violates this Section commits an unlawful practice within the meaning of this Act.

(Source: P.A. 99-768, eff. 7-1-17; 100-4, eff. 7-1-17; revised 10-12-17.)

(Text of Section after amendment by P.A. 100-512)

Sec. 2L. Used motor vehicles; modification or disclaimer of implied warranty of merchantability limited.

(a) Any retail sale of a used motor vehicle made after July 1, 2017 (the effective date of Public Act 99-768) this amendatory Act of the 99th General Assembly to a consumer by a licensed vehicle dealer within the meaning of Chapter 5 of the Illinois Vehicle Code or by an auction company at an auction that is open to the general public is made subject to this Section.

(b) This Section does not apply to any of the following:

(1) a vehicle with more than 150,000 miles at the time of sale;

(2) a vehicle with a title that has been branded "rebuilt" or "flood";

(3) a vehicle with a gross vehicle weight rating of 8,000 pounds or more; or

(4) a vehicle that is an antique vehicle, as defined in the Illinois Vehicle Code, or that is a collector motor vehicle; or .

(5) a vehicle sold at an auction that is open to the general public, provided that the auction company has conducted a mechanical inspection of the vehicle and provided notice of any defects to the vehicle to prospective purchasers.

(b-5) This Section does not apply to the sale of any vehicle for which the dealer offers an express warranty that provides coverage that is equal to or greater than the limited implied warranty of merchantability required under this Section 2L.

(b-6) (b-5) This Section does not apply to forfeited vehicles sold at auction by or on behalf of the Department of State Police.

(c) Except as otherwise provided in this Section 2L, any sale of a used motor vehicle as described in subsection (a) may not exclude, modify, or disclaim the implied warranty of merchantability created under this Section 2L or limit the remedies for a breach of the warranty hereunder before midnight of the 15th calendar day after delivery of a used motor vehicle or until a used motor vehicle is driven 500 miles after delivery, whichever is earlier. In calculating time under this Section, a day on which the warranty is breached and all subsequent days in which the used motor vehicle fails to conform with the implied warranty of merchantability are excluded. In calculating distance under this Section, the miles driven to obtain or in connection with the repair, servicing, or testing of a used motor vehicle that fails to conform with the implied warranty of merchantability are excluded. An attempt to exclude, modify, or disclaim the implied warranty of merchantability or to limit the remedies for a breach of the warranty in violation of this Section renders a purchase agreement voidable at the option of the purchaser.

(d) An implied warranty of merchantability is met if a used motor vehicle functions for the purpose of ordinary transportation on the public highway and substantially free of a defect in a power train component. As used in this Section, "power train component" means the engine block, head, all internal engine parts, oil pan and gaskets, water pump, intake manifold, transmission, and all internal transmission parts, torque converter, drive shaft, universal joints, rear axle and all rear axle internal parts, and rear wheel bearings.

(e) The implied warranty of merchantability expires at midnight of the 15th calendar day after delivery of a used motor vehicle or when a used motor vehicle is driven 500 miles after delivery, whichever is earlier. In calculating time, a day on which the implied warranty of merchantability is breached is excluded and all subsequent days in which the used motor vehicle fails to conform with the warranty are also excluded. In calculating distance, the miles driven to or by the seller to obtain or in connection with the repair, servicing, or testing of a used motor vehicle that fails to conform with the implied warranty of merchantability are excluded. An implied warranty of merchantability does not extend to damage that occurs after the sale of the used motor vehicle that results from:

(1) off-road use;

(2) racing;

(3) towing;

(4) abuse;

(5) misuse;

(6) neglect;

(7) failure to perform regular maintenance; and

(8) failure to maintain adequate oil, coolant, and other required fluids or lubricants.

(f) If the implied warranty of merchantability described in this Section is breached, the consumer shall give reasonable notice to the seller no later than 2 business days after the end of the statutory warranty period. Before the consumer exercises another remedy pursuant to Article 2 of the Uniform Commercial Code, the seller shall have a reasonable opportunity to repair the used motor vehicle. The consumer shall pay one-half of the cost of the first 2 repairs necessary to bring the used motor vehicle into compliance with the warranty. The payments by the consumer are limited to a maximum payment of $100 for each repair; however, the consumer shall only be responsible for a maximum payment of $100 if the consumer brings in the vehicle for a second repair for the same defect. Reasonable notice as defined in this Section shall include, but not be limited to:

(1) text, provided the seller has provided the consumer with a cell phone number;

(2) phone call or message to the seller's business phone number provided on the seller's bill of sale for the purchase of the motor vehicle;

(3) in writing to the seller's address provided on the seller's bill of sale for the purchase of the motor vehicle;

(4) in person at the seller's address provided on the seller's bill of sale for the purchase of the motor vehicle.

(g) The maximum liability of a seller for repairs pursuant to this Section is limited to the purchase price paid for the used motor vehicle, to be refunded to the consumer or lender, as applicable, in exchange for return of the vehicle.

(h) An agreement for the sale of a used motor vehicle subject to this Section is voidable at the option of the consumer, unless it contains on its face or in a separate document the following conspicuous statement printed in boldface 10-point or larger type set off from the body of the agreement:

"Illinois law requires that this vehicle will be free of a defect in a power train component for 15 days or 500 miles after delivery, whichever is earlier, except with regard to particular defects disclosed on the first page of this agreement. "Power train component" means the engine block, head, all internal engine parts, oil pan and gaskets, water pump, intake manifold, transmission, and all internal transmission parts, torque converter, drive shaft, universal joints, rear axle and all rear axle internal parts, and rear wheel bearings. You (the consumer) will have to pay up to $100 for each of the first 2 repairs if the warranty is violated.".

(i) The inclusion in the agreement of the statement prescribed in subsection (h) of this Section does not create an express warranty.

(j) A consumer of a used motor vehicle may waive the implied warranty of merchantability only for a particular defect in the vehicle, including, but not limited to, a rebuilt or flood-branded title and only if all of the following conditions are satisfied:

(1) the seller subject to this Section fully and accurately discloses to the consumer that because of circumstances unusual to the business, the used motor vehicle has a particular defect;

(2) the consumer agrees to buy the used motor vehicle after disclosure of the defect; and

(3) before the sale, the consumer indicates agreement to the waiver by signing and dating the following conspicuous statement that is printed on the first page of the sales agreement or on a separate document in boldface 10-point or larger type and that is written in the language in which the presentation was made:

"Attention consumer: sign here only if the seller has told you that this vehicle has the following problem or problems and you agree to buy the vehicle on those terms:

1. ......................................................

2. ..................................................

3. ...................................................".

(k) It shall be an affirmative defense to any claim under this Section that:

(1) an alleged nonconformity does not substantially impair the use and market value of the motor vehicle;

(2) a nonconformity is the result of abuse, neglect, or unauthorized modifications or alterations of the motor vehicle;

(3) a claim by a consumer was not filed in good faith; or

(4) any other affirmative defense allowed by law.

(l) Other than the 15-day, 500-mile implied warranty of merchantability identified herein, a seller subject to this Section is not required to provide any further express or implied warranties to a purchasing consumer unless:

(1) the seller is required by federal or State law to provide a further express or implied warranty; or

(2) the seller fails to fully inform and disclose to the consumer that the vehicle is being sold without any further express or implied warranties, other than the 15 day, 500 mile implied warranty of merchantability identified in this Section.

(m) Any person who violates this Section commits an unlawful practice within the meaning of this Act.

(Source: P.A. 99-768, eff. 7-1-17; 100-4, eff. 7-1-17; 100-512, eff. 7-1-18; revised 10-12-17.)

Section 95. No acceleration or delay. Where this Act makes changes in a statute that is represented in this Act by text that is not yet or no longer in effect (for example, a Section represented by multiple versions), the use of that text does not accelerate or delay the taking effect of (i) the changes made by this Act or (ii) provisions derived from any other Public Act.

Section 99. Effective date. This Act takes effect upon becoming law.