Chapter 3Territorial Applicability and General Rules
Section § 1301
This section explains how the law is determined when a business deal has connections to California and another state or country. If the parties involved agree, they can choose which location's law will apply. If they don't make such an agreement, California law will typically be used if the deal relates closely to California. However, there are specific laws that will take precedence no matter what, and in those cases, parties can only choose otherwise if those laws allow flexibility.
Section § 1302
This section allows people to change certain terms of the code through agreements, except the obligations of good faith, diligence, reasonableness, and care cannot be avoided. However, they can decide on reasonable standards to measure these obligations. Agreements can set a specific timeframe for actions if it's reasonable, even if the code says a reasonable time is required. Lastly, just because some parts of the code explicitly allow changes doesn't mean other sections can't be changed by agreement.
Section § 1303
This section explains three key concepts in contracts: 'course of performance,' 'course of dealing,' and 'usage of trade.' 'Course of performance' looks at the repeated behavior between parties in a specific deal, where one party consistently accepts the other's performance without objection. 'Course of dealing' refers to past interactions that create a common understanding for current transactions. 'Usage of trade' is a common practice in a trade that parties expect to follow. All these factors help clarify a contract’s terms, but if they conflict, the priority is express terms first, then 'course of performance,' followed by 'course of dealing,' and lastly 'usage of trade.' 'Course of performance' can indicate a waiver or change to the contract, and you must inform the other party if you want to use 'usage of trade' as evidence in court to avoid unfair surprise.
Section § 1304
This law says that anyone with a contract or duty under this section must act honestly and fairly when they carry it out or enforce it.
Section § 1305
This section of the law is about making sure that if you're wronged in a contract, you can be compensated to put you in the position you would have been if the contract was fulfilled. However, you can't get extra damages like special or punitive ones unless the law specifically says so. Also, any right or obligation mentioned in this code can be enforced by legal action, unless the law states otherwise.
Section § 1306
If someone claims their rights have been violated due to a breach, they can choose to let it go entirely or partially, even without getting anything in return. They just need to agree in writing.
Section § 1307
This law is about documents like a bill of lading or insurance certificate used in legal cases related to a contract. Such documents created by a third party can be used as evidence. If the document seems genuine, it's assumed to be authentic. Moreover, if it's decided that the document is indeed real, the facts in it are taken to be true unless proven otherwise. This shifts the burden of producing evidence and proving facts to the opposing party.
Section § 1308
This law section says that if you agree to do something or actually do it while clearly stating you still have certain rights, you don’t lose those rights by doing so. You should use phrases like 'without prejudice' or 'under protest' to make it clear. However, this rule does not apply in cases of 'accord and satisfaction,' which is a special kind of agreement to settle a dispute.
Section § 1309
This law states that if a contract allows one party to ask for quicker payment, performance, or more security "at will" or if they feel "insecure," they can only do this if they honestly believe payment or performance is at risk. If the other party believes this was done without good faith, it’s up to them to prove it wasn't justified.
Section § 1310
This law allows a person or business to agree that one debt (obligation) takes priority over another for repayment. A creditor can agree to have their right to be paid take a back seat to another creditor's right. However, this agreement doesn't mean the creditor gets any special claim or security over the debtor's assets.