Creating Contracts in California

Title 2 of Part 2 of Division 3 of the Civil Code deals with the manner of creating contracts in this state.

Section 1619 provides that a contract is either express or implied.

Section 1620 states that an express contract is one, the terms of which are stated in words.

Section 1621 specifies that an implied contract is one, the existence and terms of which are manifested by conduct.

Section 1622 explains that all contracts may be oral, except such as are specially required by statute to be in writing.

Section 1623 states that, where a contract, which is required by law to be in writing, is prevented from being put into writing by the fraud of a party thereto, any other party who is by such fraud led to believe that it is in writing, and acts upon such belief to his prejudice, may enforce it against the fraudulent party.

Section 1624 provides that seven specified contracts are invalid, unless they, or some note or memorandum thereof, are in writing and subscribed by the party to be charged or by the party’s agent.

An agreement or contract that is valid in other respects and is otherwise enforceable is not invalid for lack of a note, memorandum, or other writing and is enforceable by way of action or defense, provided that the agreement or contract is a qualified financial contract if one of specified conditions apply. The term “qualified financial contract” is defined.

There is sufficient evidence that a contract has been made in any of four specified circumstances. This section does not apply to leases. An electronic message of an ephemeral nature that is not designed to be retained or to create a permanent record.

Section 1624.5 says that a contract for the sale of personal property is not enforceable by way of action or defense beyond $5,000 in amount or value of remedy unless there is some record that indicates that a contract for sale has been made between the parties at a defined or stated price, reasonably identifies the subject matter, and is signed, including by way of electronic signature by the party against whom enforcement is sought or by his or her authorized agent.

Section 1625 states that the execution of a contract in writing, whether the law requires it to be written or not, supersedes all the negotiations or stipulations concerning its matter which preceded or accompanied the execution of the instrument.

Section 1626 says that a contract in writing takes effect upon its delivery to the party in whose favor it is made, or to his agent.

Section 1627 specifies the provisions of the Chapter on Transfers in General, concerning the delivery of grants, absolute and conditional, apply to all written contracts.

Section 1628 states that a corporate or official seal may be affixed to an instrument by a mere impression upon the paper or other material on which such instrument is written.

Section 1629 explains that all distinctions between sealed and unsealed instruments are abolished.

Section 1630 states that a printed contract of bailment providing for the parking or storage of a motor vehicle is not binding, either in whole or in part, on the vehicle owner or on the person who leaves the vehicle with another, unless the contract conforms to the three specified requirements.

Also, a copy of the contract printed in large type, in an area at least 17 by 22 inches, is required to be posted in a conspicuous place at each entrance of the parking lot. Nothing in this section is to be construed to prohibit the enactment of city ordinances on this subject that are not less restrictive, and such enactments are expressly authorized.

Section 1630.5 specifies that the provisions of any contract of bailment for the parking or storage of a motor vehicle is not exempt the bailee from liability, either in whole or in part, for the theft of any motor vehicle, when such motor vehicle is parked or stored with the bailee, and the keys are required by the bailee to be left in the parked or stored vehicle.

Section 1631 provides that every person in this State who sells machinery used or to be used for mining purposes must, at the time of sale, give to the buyer a bill of sale for the machinery. The seller is to keep a written record of the sale including specified information.

Section 1632 contains three legislative findings and declarations. A person engaged in a trade or business who negotiates primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean, orally or in writing, in the course of entering into any of the following, is required to deliver to the other party to the contract or agreement, and any other person who will be signing the contract or agreement, and before the execution thereof, a translation of the contract or agreement in the language in which the contract or agreement was negotiated, that includes a translation of every term and condition in that contract or agreement as specified.

At the time and place where a lease, sublease, or rental contract or agreement is executed, notice in any of the languages specified in which the contract or agreement was negotiated must be provided to the lessee or tenant. The terms “Regulation M,” “Regulation Z,” “supervised financial organization,” “contract,” and “agreement.”

The terms of the contract or agreement that is executed in the English language determine the rights and obligations of the parties. However, the translation of the contract or the disclosures required in any of the languages specified in which the contract or agreement was negotiated is admissible in evidence only to show that no contract was entered into because of a substantial difference in the material terms and conditions of the contract and the translation.

Any waiver of a provision of this section is contrary to public policy and is void and unenforceable. The terms “commercial real property,” “microenterprise, “nonprofit organization,” and “qualified commercial tenant” are defined.

Section 1632.5 explains that a supervised financial organization that negotiates primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean, whether orally or in writing, in the course of entering into a contract or agreement for a loan or extension of credit secured by residential real property, is required to deliver to the other party to that contract or agreement prior to the execution of the contract or agreement the applicable form or forms described for that language. The following terms are defined: “contract,” “agreement,” and “supervised financial organization.”

Section 1633 explains that an application by a prospective customer to enter into a brokerage agreement with a broker-dealer, which application is transmitted electronically and is accompanied by the prospective customer’s electronic signature or digital signature is deemed, upon acceptance by the broker-dealer, to be a fully executed, valid, enforceable, and irrevocable written contract, unless grounds exist which would render any other contract invalid, unenforceable, or revocable. The terms “broker-dealer,” “electronic,” “electronic record,” “electronic signature,” and “digital signature” are defined.