California's law falls hardest on sellers of unhealthy dogs, but hobby breeders do not fall under its provisions except for the extremely active ones. It applies to anyone who sold, transferred, or gare away two or more litters during the preceding calendar year.
Buyers have 15 days to document contagious or infectious disease, one year to document congenital or hereditary defects. The seller has 120 days to produce advertised registration papers. If the seller fails to do so, the buyer may return the dog for a full refund or keep the dog and receive a refund of 75 percent of the purchase price.
If the dog is proven to be ill or to have hereditary defects, the buyer is entitled to a replacement plus reimbursement for veterinary expenses related to certifying the dog's illness, up to the price of the dog including sales tax.
The buyer may also choose a refund plus reimbursement for veterinary expenses related to certifying the dog's illness, up to the price of the dog.
If the buyer elects to have the dog treated, the seller is required to cover up to 1 1/2 times the purchase price of the dog in veterinary expenses.
It is important to note that the cost of testing to certify a dog unhealthy could double what a seller is obligated to refund to the purchaser. This makes it very expensive to sell ill and defective dogs in California.
http://www.consumeraffairs.com/pets/lemon_ca.html