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How Are Contract Disputes Handled in California?

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Disputes arising from an oral or written contract are handled according to relevant codes found in California’s Civil Code. Depending on the type of contract and the parties involved, different code sections may apply to the specific facts of a case. However, the deadline to bring most civil claims is set forth in Title 2 of the California Code of Civil Procedure (CCP).

This article covers common questions arising from a breach of contract. A California contract lawyer can help you resolve the more detailed nuances individual to your claim.

When Is a Contract Breached?

An oral or written contract is a promise to fulfill certain obligations to accomplish a shared objective. It is “breached” when a party violates one or more terms of the agreement, often resulting in the revocation or “rescission” of the contract. Terms that violate public policy by breaking laws are termed “unconscionable” and cannot be enforced.

Courts will look at the intent of the parties when the contract was made to determine if there was a breach. Common breaches of contract may involve:

  • Employment termination
  • Business partnerships
  • Real estate leases
  • Title to property

California Civil Code Section 1640 allows courts to disregard parts of an otherwise valid contract when, through “fraud, mistake, or accident,” that portion fails to express the parties’ intent. Section 1654 explains that in cases where the contract could favor either party, the language will be interpreted “most strongly against” the party creating the uncertainty. Consequently, pursuant to Section 1649, courts will interpret ambiguous language in the way the “promisor believed” the contracting party “understood it” at the time of signing.

California Civil Code Section 3526 provides, “No man is responsible for that which no man can control.” Also known as “acts of God,” natural disasters, pandemics, and other unforeseen circumstances can cause one or both parties to violate the terms of an agreement. Parties try to include these types of clauses in case something goes wrong.

What Are Common Ways to Handle Contract Disputes?

Ways to resolve disputes are often provided within the “four corners” of the contract. For instance, parties may agree to first handle their differences according to the California Dispute Resolution Programs Act, which provides an informal forum to achieve conciliation among parties. Alternatively, parties may submit to arbitration by an administrative law judge before bringing an action in California Courts.

For example, California Civil Code Section 1670 provides that certain construction contracts contain a provision to decide disputes arising from the contract through “independent arbitration.” However, third-party arbitration must be “mutually agreeable” to both parties, or the case will proceed to litigation in court. Parties claiming violations of contract terms should nevertheless retain an experienced advocate to protect their interests at the arbitration stage.

How Much Time Do I Have to File a Claim?

According to CCP §339, a party has two years from the time an oral agreement is broken to bring a civil suit for losses sustained from the breach. For contracts in writing, CCP §337 gives aggrieved parties up to four years to bring a civil action.

Administrative claims against government agencies or offices are “special” claims that give the government 45 days to respond. The amount of time to file suit can vary depending on the type of contract dispute.

Contact a Contract Dispute Lawyer in Riverside, California

Because contract disputes are varied and complex, you should consult a business law attorney for help. You may be entitled to multiple forms of compensation for the breach of an express or implied contract.

Contact the legal team of Wagner Zemming Christensen, LLP, at 951-686-4800 to pursue compensatory damages for losses resulting from a contract dispute.






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