Murillo v. Fleetwood Enterprises, Inc., 17 Cal.4th 985 (1998):
The Song-Beverly Act, enacted in 1970 (Stats. 1970, ch. 1333, § 1, p. 2478 et seq.), regulates warranty terms, imposes service and repair obligations on manufacturers, distributors, and retailers who make express warranties, requires disclosure of specified information in express warranties, and broadens a buyer’s remedies to include costs, attorney’s fees, and civil penalties. It supplements, rather than supersedes, the provisions of the California Uniform Commercial Code. In 1982, the Legislature added a provision designed to give recourse to the buyer of a new automobile that suffers from the same defect repeatedly, or is out of service for cumulative repairs for an extended period.
Popularly known as the automobile “lemon law”, the Song-Beverly Act is strongly pro-consumer, expressly providing that waiver of its provisions by a buyer, “except as expressly provided in this chapter, shall be deemed contrary to public policy and shall be unenforceable and void.” (Civ. Code, § 1790.1) The Act also makes clear its pro-consumer remedies are in addition to those available to a consumer pursuant to the Commercial Code (Civ. Code, § 1790.3) and the Unfair Practices Act (Civ. Code, § 1790.4). The Act is manifestly a remedial measure, intended for the protection of the consumer; it should be given a construction calculated to bring its benefits into action.
Mexia v. Rinker Boat Co., 174 Cal.App.4th 1297 (2009):
Under the Song-Beverly Act, every retail sale of “consumer goods” in California includes an implied warranty by the manufacturer and the retail seller that the goods are “merchantable” unless the goods are expressly sold “as is” or “with all faults.” Merchantability, for purposes of the Song-Beverly Act, means that the consumer goods: (1) Pass without objection in the trade under the contract description, (2) Are fit for the ordinary purposes for which such goods are used. (3) Are adequately contained, packaged, and labeled, and (4) Conform to the promises or affirmations of fact made on the container or label. `The core test of merchantability is fitness for the ordinary purpose for which such goods are used. Such fitness is shown if the product is in safe condition and substantially free of defects.
When there has been a breach of the implied warranty of merchantability, a buyer may bring an action for the recovery of damages and other legal and equitable relief.
(Although the Uniform Commercial Code provides a similar warranty of merchantability (Cal. U. Com. Code, § 2314), its provisions proved limited in providing effective recourse to a consumer dissatisfied with a purchase. In order to provide greater protections and remedies for consumers, the Legislature enacted the Song-Beverly Act. It is strongly pro-consumer and makes clear its pro-consumer remedies are in addition to those available to a consumer pursuant to the Uniform Commercial Code. To the extent that the Song-Beverly Act gives rights to the buyers of consumer goods, it prevails over conflicting provisions of the Uniform Commercial Code.
One innovation of the Song-Beverly Act is an express provision for a duration of the implied warranty of merchantability. The Uniform Commercial Code, by contrast, did not expressly set forth a duration of the warranty. However, in order to prove a breach of the implied warranty, the purchaser was required to show that the defect existed at the time the product was sold or delivered. In effect, therefore, there is no “duration” of the implied warranty under the Uniform Commercial Code in any meaningful sense; the product is either merchantable or not (and a breach of the implied warranty occurs or not) only at the time of delivery.
The duration provision in the Song-Beverly Act provides that the duration of the implied warranty of merchantability shall be coextensive in duration with an express warranty which accompanies the consumer goods, provided the duration of the express warranty is reasonable; but in no event shall such implied warranty have a duration of less than 60 days nor more than one year following the sale of new consumer goods to a retail buyer. Where no duration for an express warranty is stated with respect to consumer goods, or parts thereof, the duration of the implied warranty shall be the maximum period prescribed above. By defining a duration for the implied warranties under the Song-Beverly Act, the Legislature arguably made an improvement in clarity over the California Uniform Commercial] Code, which says nothing about their duration except that a cause of action for their breach accrues upon delivery.
Keegan v. American Honda Motor Co, Inc., 838 F.Supp.2d 929 (C.D. Cal. 2012):
The Song-Beverly Consumer Warranty Act (“Song-Beverly Act”) was enacted to regulate warranties and strengthen consumer remedies for breaches of warranty. The act is intended to protect purchasers of “consumer goods,” defined as “any new product or part thereof that is used, bought, or leased for use primarily for personal, family, or household purposes, except for clothing and consumables.” CAL. CIV.CODE § 1791(a). Unless specific disclaimer methods are followed, an implied warranty of merchantability accompanies every retail sale of consumer goods in the state. CAL. CIV.CODE § 1792.
Under the act, an implied warranty of merchantability guarantees that “consumer goods meet each of the following: (1) Pass without objection in the trade under the contract description; (2) Are fit for the ordinary purposes for which such goods are used; (3) Are adequately contained, packaged, and labeled; (4) Conform to the promises or affirmations of fact made on the container or label.” CAL. CIV.CODE § 1791.1(a). Unlike express warranties, which are basically contractual in nature, the implied warranty of merchantability arises by operation of law. It provides for a minimum level of quality. Thus, a plaintiff claiming breach of an implied warranty of merchantability must show that the product did not possess even the most basic degree of fitness for ordinary use.
Consistent with this general principle, the implied warranty of merchantability set forth in § 1791.1(a) requires only that a vehicle be reasonably suited for ordinary use. It need not be perfect in every detail so long as it provides for a minimum level of quality.
A vehicle that has been materially damaged will not pass without objection in the trade as a new car. In this regard, California courts reject the notion that merely because a vehicle provides transportation from point A to point B, it necessarily does not violate the implied warranty of merchantability. A vehicle that smells, lurches, clanks, and emits smoke over an extended period of time is not fit for its intended purpose.
See: California Civil Code §§ 1790, et al.