Case Against Debtor in Default on Promissory Agreement Philippines

Here’s a compact, practitioner-style legal article for the Philippine setting—built around what the Lemon Law actually requires of dealers when parts are defective, and what you (or your client) can compel them to do.

Dealer Duty to Replace Defective Vehicle Parts – Lemon Law (Philippines)

1) Core framework (what law governs)

  • Republic Act No. 10642 (Philippine Lemon Law) protects buyers of brand-new motor vehicles that fail to conform to the manufacturer’s standards/specifications despite reasonable repair attempts. It binds the manufacturer, distributor, and authorized dealer. (Lawphil)
  • Implementing Rules (DTI DAO 14-03, 2014) spell out the procedures (repair attempts, notices, DTI case path, “reasonable allowance for use,” etc.). (DTI Web Files)
  • Consumer Act (R.A. 7394) sits in the background; for repair services it requires workmanship/spare-parts guarantees, and DTI can order repair, replacement, or refund where warranted (Lemon Law is not the only remedy). (aseanconsumer.org)

Takeaway: You can invoke Lemon Law or proceed under general consumer-protection routes (or both, depending on strategy). The Supreme Court has clarified Lemon Law is an alternative, not exclusive, remedy. (Supreme Court of the Philippines)


2) The dealer’s duty to repair/replace parts (before you reach “replace the car”)

During the Lemon Law Rights Periodthe first 12 months from delivery or the first 20,000 km, whichever comes first—the dealer (along with the manufacturer/distributor) must, at no cost to the consumer, diagnose and repair the nonconformity; the repair may include replacement of parts, components, or assemblies necessary to make the vehicle conform to standards. (Lawphil)

Key points for parts replacement under the Lemon Law:

  • No charge for parts/labor linked to the nonconformity during the rights period. The law’s text frames repair to include replacement of parts/components/assemblies; dealers cannot bill you for these to “keep the warranty.” (Lawphil)
  • Reasonable opportunity to cure: you must present the vehicle and allow the dealer (or another authorized service center of the same brand) to attempt repair. Track each repair order (RO), specific defects, and replaced parts. (DTI Web Files)
  • Availability and quality: if the fix requires parts, the dealer is expected to source and install appropriate OEM parts. Under the Consumer Act regime, service firms must guarantee workmanship and replacement of spare parts for a minimum period; poor-quality substitution can itself be a breach. (aseanconsumer.org)

3) When does the duty escalate from “replace parts” to “replace or refund the vehicle”?

You can trigger “lemon” remedies if, within the Lemon Law Rights Period:

  • The same nonconformity persists after at least four (4) separate repair attempts by the manufacturer/distributor/authorized dealer; or
  • The vehicle is out of service for a cumulative total of at least 30 calendar days (need not be consecutive) due to repair of the same nonconformity. At that point, you may demand replacement (comparable new unit) or refund (with a deduction for reasonable use). (DTI Web Files)

Reasonable allowance for use is computed per the IRR (kilometers used before replacement/refund ÷ 20,000 km) × purchase price—deducted from the refund or factored into replacement. (DTI Web Files)


4) Who exactly is responsible—the dealer, the distributor, or the manufacturer?

R.A. 10642 places duties jointly on the manufacturer, distributor, and authorized dealer. Practically, the consumer deals first with the selling/servicing dealer, but the brand’s whole chain is on the hook for conforming repairs and, if warranted, replacement or refund. (Lawphil)


5) What’s not covered (exclusions you’ll hear)

  • Abuse, neglect, or unauthorized modifications, noncompliance with the owner’s manual, accidents, flood, fire—i.e., defects not attributable to manufacturing/nonconformity.
  • Concerns that do not substantially impair the use, value, or safety of the vehicle. (These carve-outs appear across the IRR and typical warranty booklets; dealers often invoke them—your job is to pin the cause on original nonconformity with evidence.) (DTI Web Files)

6) Playbook for enforcing parts replacement (and escalating if needed)

A) Within the Lemon Law window (first 12 months/20,000 km):

  1. Document: log symptoms; RO numbers; days out of service; exact parts replaced; test results. (DTI Web Files)
  2. Demand conforming repair: cite R.A. 10642; require OEM parts and proper diagnostics (not just resets). (Lawphil)
  3. Track attempts/clock: after 4 failed attempts or 30 cumulative days down, write a replacement/refund demand citing IRR thresholds. (DTI Web Files)
  4. File at DTI (HSAC/DTI arbitration path per IRR) if dealer stonewalls; attach ROs, service advisories, and correspondence. (DTI Web Files)

B) Outside the Lemon Law window—or as an alternative:

  • Use Consumer Act remedies (DTI may order repair/replace/refund for defective goods/services) and sue for breach of warranty or damages under the Civil Code. The Supreme Court recognizes Lemon Law is not exclusive—you may elect other legal routes. (Supreme Court of the Philippines)

7) Evidence that wins these cases

  • Four ROs (or 30+ cumulative days) with the same defect code/complaint;
  • Part numbers and test results (pre- and post-repair);
  • Manufacturer technical bulletins (if any) applied/not applied;
  • Downtime log proving cumulative days;
  • Fuel-use/odometer to compute “reasonable allowance for use.” (These mirror the IRR’s documentation demands and make or break Lemon Law claims.) (DTI Web Files)

8) Frequent dealer defenses—and counters

  • “It’s within normal spec.” → Rebut with objective tests/factory tolerances; show repeat failure after parts replacement. (DTI Web Files)
  • “User-induced.” → Correlate onset with no misuse; stress-test logs; absence of external damage.
  • “Warranty covers repair only.” → Under Lemon Law, if nonconformity persists after the required attempts/period, replacement or refund is on the table. (Lawphil)
  • “Lemon Law is your only path.” → Not true; Consumer Act and civil remedies remain available. (Supreme Court of the Philippines)

9) Practical tips (for both sides)

For consumers:

  • Book repairs within the 12-month/20,000-km window; insist on detailed ROs and part numbers.
  • If a critical part is on backorder, put the dealer on written notice that downtime counts toward 30 days. (DTI Web Files)

For dealers:

  • Offer clear diagnostics, documented part replacements, and firm ETAs; the IRR expects transparent reporting and allows the consumer time to evaluate post-repair. (aseanconsumer.org)

10) Bottom line

  • During the Lemon Law period, a dealer’s duty isn’t just to tinker—it includes replacing defective parts/assemblies needed to make the car conform to standards, at no cost to the consumer. (Lawphil)
  • If the same defect persists after four attempts or 30 cumulative days down, the consumer can compel replacement of the vehicle or a refund (less a usage allowance). (DTI Web Files)
  • Even beyond (or instead of) Lemon Law, Consumer Act and general contract/tort remedies remain viable—use whichever path better fits your facts, timelines, and proof. (Supreme Court of the Philippines)

This is general information, not legal advice. For a live matter, map your repair attempts and downtime to the IRR thresholds, compute the usage deduction, and prepare a DTI filing with complete ROs and test records.

Disclaimer: This content is not legal advice and may involve AI assistance. Information may be inaccurate.