California Lemon Law Overview

I wish every state legislator received a training course in “Regulation Best Practices” that taught them how to balance the equities when contemplating their vote on a given piece of legislation. By that, I mean approaching regulation in the spirit of “If we demand too much, we will create mandatory compliance costs that will exceed the prevention of the harm we seek to avoid.” This must be weighed against regulating an industry too little, in which the potential harms to be avoided are great and the agency costs that would be required to avoid the bad outcome are minimal.

One of my favorite examples of sound regulation comes out of the State of California (and I don’t get to say that too often). In California’s Song-Beverly Consumer Act, which is often called the California (CA) Lemon Law Act, new motor vehicles sold to consumers contain implied warranties of merchantability Read the rest of this article!