Unlawful Contracts

Civil Code Division 4, Part 2, Title 4 deals with unlawful contracts in California.

Section 1667 provides that it is not lawful which is contrary to an express provision of law; contrary to the policy of express law, though not expressly prohibited; or, otherwise contrary to good morals.

Section 1668 states that all contracts which have for their object, directly or indirectly, to exempt any one from responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, whether willful or negligent, are against the policy of the law.

Section 1669 explains that every contract in restraint of the marriage of any person, other than a minor, is void.

Section 1669.5 provides that any contract for the payment of money or other consideration to a minor who has been alleged to be the victim of an unlawful sex act, or to his or her legal representative, by the alleged perpetrator of that unlawful sex act, or his or her legal representative, entered into on or after the time of the alleged unlawful sex act, and providing for any payments to be made more than one year after the date of the execution of the contract, is void as contrary to public policy. A district attorney may bring an action or intervene in any action to enjoin enforcement of any contract which is in violation of this section. The term “unlawful sex act” is defined.

Section 1669.7 states that a contract for the payment of money or other consideration in violation of Section 132.5 of the Penal Code is void as contrary to public policy.

Section 1670 provides that any dispute arising from a construction contract with a public agency, which contract contains a provision that one party to the contract or one party’s agent or employee shall decide any disputes arising under that contract, is resolved by submitting the dispute to independent arbitration, if mutually agreeable, otherwise by litigation in a court of competent jurisdiction.

Section 1670.5 says that, if the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.

Section 1670.6 states that a contract with a consumer located in California for the purchase of a good or service that is made in connection with a telephone solicitation made in or from outside of California and is primarily for personal, family, or household use, is unlawful if, with respect to that telephone solicitation, the telemarketer is in violation of federal law.

Section 1670.7 specifies that any provision of a contract that purports to allow a deduction from a person’s wages for the cost of emigrating and transporting that person to the United States is void as against public policy.

Section 1670.8 states that a contract or proposed contract for the sale or lease of consumer goods or services may not include a provision waiving the consumer’s right to make any statement regarding the seller or lessor or its employees or agents, or concerning the goods or services. Any waiver of the provisions of this section is contrary to public policy, and is void and unenforceable.

Section 1670.8.5 provides that a contract or proposed contract for the provision of a consumer service by a licensee regulated by a licensing board cannot include a provision limiting the consumer’s ability to file a complaint with that board or to participate in the board’s investigation into the licensee. Any waiver of the provisions of this section is contrary to public policy, and is void and unenforceable. The terms “consumer service” and “licensing board” are defined. Violation of this section by a licensee constitutes unprofessional conduct subject to discipline by the licensee’s licensing board.

Section 1670.9 prohibits a city, county, city and county, or local law enforcement agency from entering into a contract with the federal government or any federal agency or a private corporation, to house or detain in a locked detention facility noncitizens for purposes of civil immigration custody.

Section 1670.10 states that a contract entered to transfer ownership of a dog or cat in which ownership is contingent upon the making of payments over a period of time subsequent to the transfer of possession of the dog or cat is void as against public policy.

Section 1670.11 provides that a provision in a contract or settlement agreement that waives a party’s right to testify in an administrative, legislative, or judicial proceeding concerning alleged criminal conduct or alleged sexual harassment on the part of the other party to the contract or settlement agreement, or on the part of the agents or employees of the other party, when the party has been required or requested to attend the proceeding pursuant to a court order, subpoena, or written request from an administrative agency or the Legislature, is void and unenforceable.

Section 1670.12 defines the terms “exclusive listing agreement” and “single-family residential property.” It is unlawful for an exclusive listing agreement regarding single-family residential property to last longer than 24 months from the date the agreement was made. This paragraph does not apply to exclusive listing agreements entered into between a real estate broker and a corporation, limited liability company, or partnership.

No exclusive listing agreement can renew automatically, and any renewal of an exclusive listing agreement must be in writing and be dated and signed by all parties to the agreement. It is unlawful for a renewal of an exclusive listing agreement to last longer than 12 months from the date the renewal was made.

Section 1670.15 defines the terms “consumer,” “consumer use agreement,” and “person.” Dispute resolution terms and conditions of a consumer use agreement are limited to the use, payment, or provision of the good, service, money, or credit provided by that consumer use agreement. A waiver of the provisions of this section is contrary to public policy and void and unenforceable.