SCENARIO
On June 1, 2022, John purchased a new X-ALU Sportscar from Sam’s Dealership which specializes in selling vehicles manufactured by ALU Motors at their auto plant in Glendale, California.
On June 13, 2022, John took his family for a ride to the desert. Unfortunately, the air conditioning was not working. The next day, he took the vehicle to Sam’s Dealership to see if they could checkout the vehicle to determine why the air conditioner did not work. After three days, Sam’s Dealership was finally able to determine the problem and make the necessary repairs and John took possession of the vehicle. As he drove to work the next day, he noticed that the air conditioning was working fine.
On July 4th, John drove his family to the beach to enjoy the holiday celebrations. After watching the firework, John attempted to start-up his vehicle but it would not start. John called auto club for help as he assumed that maybe the car battery had died. The auto club technician could not charge the battery. Left with no options, John called Uber for a pick-up for his family and the auto club technician towed the vehicle to Sam’s Dealership.
The next day, the mechanics at Sam’s determined that there was a computer chip malfunction in the engine. It took seven days to repair the vehicle and the vehicle was returned to John.
On July 14th, John calls ALU Motors to complain that the vehicle is defective and he demands a repurchase. ALU Motors reminds John that the X-ALU Sportscar is still under its repair warranty which the ALU will honor and that in the purchase agreement, John agreed that any disputes regarding the vehicle had to be resolved through arbitration.
APPLICABLE LAW
1. The California Song-Beverly Consumer Warranty Act (SongBeverly Act) applies to the sale of consumer goods. This includes the purchase of vehicles the vehicle is being used primarily for personal, family and household purposes.
2. Under the SongBeverly Act, a vehicle is eligible for arbitration if the defect is based upon the vehicle’s material or workmanship, the consumer resides in California, and the vehicle is distributed by a dealer in California.
3. If the manufacturer is unable to service or repair a vehicle to conform to the applicable express warranties after a reasonable number of attempts, the manufacturer must either replace or repurchase the vehicle.
4. The California law establishes a rebuttable presumption that the vehicle is defective if at least four repair attempts have been made within 18 months of purchase and the car is still defective.
FINAL EXAM TASK
You have been assigned as the arbitrator to hear this dispute. John wants ALU to repurchase the vehicle. ALU wants to continue repairing the vehicle as needed per the warranty and that John’s request for the vehicle to be repurchased by ALU be denied.
Address these questions thoroughly. Make sure that you use multiple credible sources to support your answers and cite them in APA format. The minimum length of this submission should be two pages, not counting the title page and reference page.
1. Explain whether this claim can be decided by arbitration. Support your position.
2. Explain whether the four points of applicable law have been met in this case. Support your position.
3. Explain how you would decide this case as the arbitrator, and why.
