What you need to know about Singapore’s “Lemon Law”

It was described as both pro-consumer and business-friendly.

According to the Ministry of Trade and Industry, the Bill for the proposed amendments to the Consumer Protection (Fair Trading) Act (CPFTA), the Hire Purchase Act (HPA) and Road Traffic Act has been passed in Parliament.

Minister Teo Ser Luck said the amendments will expand and make more explicit the remedies available to both consumers and businesses, as well as clarify timelines and burden of proof.

“Introducing such a law in Singapore will bring us in line with international jurisdictions, and assure both locals and tourists that the products they buy are of good quality, thus improving the image of the retail industry in Singapore,” said Mr Teo.

Here are “Lemon Law” Frequently Asked Questions from the MTI:

1. What are “lemon laws”?

“Lemon laws” are laws protecting consumers against defective goods that fail to conform to contract, or meet satisfactory quality or performance standards at the time of purchase, colloquially known as “lemons”.

2. Why is there a need for the proposed amendments?

The proposed amendments make it clearer that a defect found within 6 months is presumed to have existed at the point of delivery. These laws will make the transactional process between buyer and seller more open and transparent, with clearer rules on the burden of proof, and more certainty about the recourses available.

With “lemon laws” in place, there are now additional remedies (e.g. repair and replacement) beyond just rejecting the goods and getting a refund.

The amendments will assure both locals and tourists that the products they buy are of good quality, and improve the image of the retail industry in Singapore. It will also foster good business practices among retailers.

3. What are the recourses under the proposed amendments?

The retailer may first offer to repair or replace the defective good within a reasonable period of time and without significant inconvenience to the buyer.

However, if repair or replacement is not possible or reasonable (e.g. disproportionately costly), or the repair or replacement was not done within a reasonable period and without significant inconvenience to the consumer, he/she may keep the defective good and ask for a partial refund, or return the defective good for a full refund. The full refund amount will take into account the state of the good resulting from the consumer’s use.

4. How do you define what is a Lemon or what is a defective product?

The Lemon Law applies when there is non-conformity to the sale contract at the point of delivery, e.g. the product does not meet reasonable performance expectations and is not of satisfactory quality. The quality of the product includes aspects such as being fit for its purpose, appearance and finish, freedom from minor defects, safety and durability.

5. For how long are goods covered under the proposed amendments?

If a defect is found within six months of delivery, it is assumed the defect existed at the time of delivery, and the Lemon Law provisions apply, unless the retailer can prove otherwise, or if such a presumption is incompatible with the nature of the goods (e.g. goods with a short life span such as consumables and food which are not expected to last beyond their normal shelf-life). Beyond six months, the burden falls on the consumer to prove that the defect existed at the point of delivery.

6. Under what conditions would consumers not be entitled to a remedy?

Consumers are not entitled to a remedy if (i) they had damaged the item; or (ii) they had misused it and caused the fault; or (iii) they had damaged it while trying to modify or repair it themselves or through a third party; or (iv) the consumer had known about the fault before they bought the goods; or (v) they had simply changed their mind and no longer wanted the item.

7. What should retailers note about the proposed amendments?

As required under laws such as the Sale of Goods Act and the Hire Purchase Act, retailers should ensure that the goods they sell match their description or are fit for their purpose as marketed and promoted. Descriptions include information and details on the good that can be found on the label, packaging, posters or any other print material, or given verbally by the sales representatives.

Retailers should point out defects or limitations, if any, to the consumer before the consumer buys the good. The retailer will not be held liable for defects which the consumer is proven to know about before he/she buys the goods. For clarity, the retailer may document such defects and limitations e.g. on the sales contract, invoice or packaging.

8. Are second-hand goods covered under the proposed amendments?

Used goods are covered under the new law, but the law will take into account the age and price paid for the goods to ascertain whether or not a claim of defect is reasonable.