You buy a brand new snowmobile with state of the art technology from a local dealer. You take it out for its first weekend trip of the winter season. Within 10 minutes of using the snowmobile, it bogs down, or cuts out, on you despite the fact that your hand is on the throttle giving the engine gas. The bogging down occurs sporadically during the course of the weekend trip. Sometimes it happens in five minute or ten minute intervals, or nothing would happen for one hour and then it would occur again.
You deliver the snowmobile back to the dealer to get it repaired. The dealer and the manufacturer think the problem is with the computer that controls the snowmobile. They re-programme the computer and tell you that everything is fine now. You go on another trip. Same problem. The dealer repairs it again. You go on another trip. Same problem. You ask the dealer for your money back. The dealer says no. You sue the dealer and the manufacturer on the basis that you bought “a lemon”.
In these circumstances, a court will likely make a finding in your favour against the dealer. The test is this: the snowmobile is “a lemon” if it completely fails to function for the purpose intended despite repeated attempts to repair it. There are two legal principles at work in lemon law. There is a fundamental breach of the contract with the dealer because you did not get what you bargained for. There is also legislation that protects you, the Sale of Goods Act. Every purchase of goods comes with an implied warranty that what you purchased works. The snowmobile dealer is liable because it breached the implied warranty.
What about the manufacturer? In many cases, manufacturers give you an express warranty only to repair defective parts. In this case, since you did not buy the snowmobile from the manufacturer, the manufacturer is not liable for the breach of contract or the breach of the implied warranty which is part of the sale of the goods. It is only liable within the terms of its express warranty to repair defective parts. A court may find that the manufacturer is only liable for the cost of a new snowmobile computer. However, if personal injury had resulted from the bogging down, such as a rear-end collision by another snowmobile, the manufacturer may be directly liable because of negligent manufacture. If the vehicle had been a truck used for business instead of a snowmobile, the manufacturer may be liable to the truck owner for loss of profit.