What is contract formation?

“Contract formation is governed by objective manifestations, not subjective intent of any individual involved.” Roth v. Malson (1998) 67 Cal. App. 4th 552. “The test is ‘what the outward manifestations of consent would lead a reasonable person to believe.’” Id.; see also, Guzman v. Visalia Community Bank (1999) 71 Cal.App.4th 1370, 1376-1377 (“the test of the true meaning of an acceptance or rejection is…what a reasonable person in the position of the parties would have thought it meant”)

A cause of action relating to contract formation addresses the presence or absence of each of the elements of a legally valid contract. The essential elements of a legally valid contract are:

  1. parties capable of contracting,
  2. their consent,
  3. a lawful object, and
  4. a sufficient cause or consideration.

Civ. Code § 1550. Civil Code, section 1640 states that “[w]hen, through fraud, mistake, or accident, a written contract fails to express the real intention of the parties, such intention is to be regarded, and the erroneous parts of the writing disregarded.”

“Fraud, or misrepresentation, may be asserted as an affirmative defense to a breach of contract claim. See Grady vs. Easley (1941) 45 Cal.App.2d 632, 642 (“One who has been induced to enter into a contract by false and fraudulent representations may rescind the contract....”); and Bowmer vs. H. C. Louis, Inc. (1966) 243 Cal.App.2d 501, 503 (“It is well established that a defrauded defendant may set up the fraud as a defense and, in fact, may even recoup his damages by counterclaim in an action brought by the guilty party to the contract”).

“Where one party commits fraud during the contract formation or performance, the injured party may recover in contract and tort.” Harris v. Atlantic Richfield Co. (1993) 14 Cal.App.4th 79, 78; see also Lazar v. Super. Ct. (1996) 12 Cal. 4th 631, 645.

“The rules governing the role of the court in interpreting a written instrument are well established. The interpretation of a contract is a judicial function.” Wolf v. Walt Disney Pictures & Television (2008) 162 Cal.App.4th 1107, 1125-1126.

“In engaging in this function, the trial court ‘give[s] effect to the mutual intention of the parties as it existed' at the time the contract was executed. Ordinarily, the objective intent of the contracting parties is a legal question determined solely by reference to the contract’s terms.” Wolf v. Walt Disney Pictures & Television (2008) 162 Cal.App.4th 1107, 1125-1126. Extrinsic evidence is admissible, however, to interpret an agreement when a material term is ambiguous. Wolf, supra, 162 Cal.App.4th at p. 1126; see also Pacific Gas & Electric Co. v. G.W. Thomas Drayage & Rigging (1968) 69 Cal.2d 33, 39-40

If extrinsic evidence reveals that apparently clear language in the contract is, in fact, “susceptible to more than one reasonable interpretation,” then extrinsic evidence may be used to determine the contracting parties’ objective intent. Id.

Useful Rulings on Contract Formation

Recent Rulings on Contract Formation

HECTOR OCHOA VS JET DELIVERY SERVICE, INC.

Municipal Resource Consultants (2003) 107 Cal.App.4th 267, 273.) “’Essentially a sliding scale is invoked which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves.’ [Citation].

  • Hearing

    Jul 13, 2020

  • Type

    Employment

  • Sub Type

    Wrongful Term

KELSEA SAKAMOTO VS GLENOAKS TOWNHOMES LLC, ET AL.

“Essentially a sliding scale is invoked which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves.” (15 Williston on Contracts (3d ed. 1972) § 1763A, pp. 226-227; see also A & M Produce Co., supra, 135 Cal.App.3d at p. 487.)

  • Hearing

    Jul 10, 2020

  • Type

    Real Property

  • Sub Type

    Landlord Tenant

ELMAR PEREZ VS WB SIMI VALLEY CDJR, LLC, ET AL.

“Essentially a sliding scale is invoked which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves.” [Citation] In other words, the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.” (Armendariz v.

  • Hearing

    Jul 09, 2020

  • Type

    Personal Injury/ Tort

  • Sub Type

    Fraud

AHMED ISSA VS TESLA, INC.

“Essentially a sliding scale is invoked which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves. [Citations.] In other words, the more substantively unconscionable the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.” (Ibid.)

  • Hearing

    Jul 09, 2020

  • Type

    Employment

  • Sub Type

    Wrongful Term

MONICA LLERENAS, ET AL. VS KIA MOTORS AMERICA, INC., A CALIFORNIA CORPORATION

Therefore, where one party commits fraud during the contract formation or performance, the injured party may recover in contract and tort. (Ibid.) In this matter, Plaintiffs do not just allege that the vehicle did not work as intended.

  • Hearing

    Jul 07, 2020

  • Type

    Contract

  • Sub Type

    Breach

CHRIS SANCHEZ, ET AL. VS JACEM HEALTHY PRODUCTS INC., A CALIFORNIA CORPORATION, ET AL.

When determining whether a valid contract to arbitrate exists, we apply ordinary state law principles that govern contract formation. [Citation.] In California, a ‘clear agreement’ to arbitrate may be either express or implied in fact. [Citation.]” (Davis v. Nordstrom, Inc. (9th Cir. 2014) 755 F.3d 1089, 1092-1093 (Davis).) Petitioner contends that Respondent issued a bodily injury liability policy that contained uninsured motorist coverage (the Policy) to her. (Pet. at p. 4; Howell Decl. Ex. 1.)

  • Hearing

    Jul 01, 2020

  • Type

    Employment

  • Sub Type

    Other Employment

NANCY SANDERS VS INTERINSURANCE EXCHANGE OF THE AUTOMOBILE CLUB

When determining whether a valid contract to arbitrate exists, we apply ordinary state law principles that govern contract formation. [Citation.] In California, a ‘clear agreement’ to arbitrate may be either express or implied in fact. [Citation.]” (Davis v. Nordstrom, Inc. (9th Cir. 2014) 755 F.3d 1089, 1092-1093 (Davis).) Petitioner contends that Respondent issued a bodily injury liability policy that contained uninsured motorist coverage (the Policy) to her. (Pet. at p. 4; Howell Decl. Ex. 1.)

  • Hearing

    Jul 01, 2020

ARBY NAHAPETIAN VS TESLA, INC. D/B/A TESLA MOTORS, INC.

When determining whether a valid contract to arbitrate exists, we apply ordinary state law principles that govern contract formation. [Citation.] In California, a ‘clear agreement’ to arbitrate may be either express or implied in fact. [Citation.]” (Davis v. Nordstrom, Inc. (9th Cir. 2014) 755 F.3d 1089, 1092-1093 (Davis).) Page 7 of the Contract contains a section titled “Arbitration Provision,” (the Arbitration Provision) which states, in relevant part: 1.

  • Hearing

    Jul 01, 2020

(NO CASE NAME AVAILABLE)

When one party commits fraud during the contract formation or performance, the injured party may recover in both contract and tort. (Id.) Because Plaintiff has adequately alleged fraud, his complaint is not barred by the economic loss rule. Defendants rely on no facts support this argument, referring only to Plaintiff’s allegations. (Motion, at p.13.)

  • Hearing

    Jun 30, 2020

BERT GONZALES, ET AL. VS HYUNDAI MOTOR AMERICA

When one party commits fraud during the contract formation or performance, the injured party may recover in both contract and tort. (Id.) Because plaintiffs have adequately alleged fraud, her complaint is not barred by the economic loss rule.

  • Hearing

    Jun 26, 2020

CHARLES P LABELLA, ET AL. VS DOTT NGUYEN , ET AL.

“Essentially a sliding scale is invoked which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves.” (Id. at 1243-1244.) “In other words, the more substantively unconscionable oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that term is unenforceable, and vice versa.” (Id. at 1244.)

  • Hearing

    Jun 24, 2020

  • Type

    Employment

  • Sub Type

    Other Employment

VALERIE RODRIGUEZ VS FCA US LLC, A DELAWARE LIMITED LIABILITY COMPANY, ET AL.

When one party commits fraud during the contract formation or performance, the injured party may recover in both contract and tort. (Id.) Because plaintiff has adequately alleged fraud, her complaint is not barred by the economic loss rule.

  • Hearing

    Jun 23, 2020

  • Type

    Contract

  • Sub Type

    Breach

ILDIKO DIHEN V. VOLVO USA, LLC ET AL.

Thus, where one party commits fraud during the contract formation or performance, the injured party may recover in contract and tort. (Ibid.; see Harris v. Atlantic Richfield Co. (1993) 14 Cal.App.4th 79, 78.) Here, the demurrer to the cause of action for fraud is being sustained on the basis that as pleaded it is barred by the statute of limitations.

  • Hearing

    Jun 18, 2020

AUCK VS ALLEN OLDSMOBILE CADILLAC, INC.

Examples include committing fraud during the contract formation or performance. (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal. 4th 979, 970; Food Safety Net Services v. Eco Safe Systems USA, Inc. (2012) 209 Cal.App.4th 1118, 1130.) A party has a duty to not misrepresent facts, independent of duties to perform the contract itself. Robinson, at 991. “[W]hen one party commits a fraud during the contract formation or performance, the injured party may recover in contract and tort.”

  • Hearing

    Jun 15, 2020

MCCLOUGH VS. KHAZAIE

The Court also declines to perform the academic exercise of deciding whether one or both of the two possible agreements would survive scrutiny following a contract formation and unconscionability analysis.

  • Hearing

    Jun 04, 2020

WAXLER VS NISSAN NORTH AMERICA INC

Atlantic Richfield Co. (1993) 14 Cal.App.4th 70, 78, 17 Cal.Rptr.2d 649 ["when one party commits a fraud during the contract formation or performance, the injured party may recover in contract and tort"].)." Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 989-90. "California also has a legitimate and compelling interest in preserving a business climate free of fraud and deceptive practices." (Diamond Multimedia Systems, Inc. v.

  • Hearing

    Mar 12, 2020

  • Type

    Contract

  • Sub Type

    Breach

SUPERIOR COURT VS. TUTTLECLICK FORD

Thus, where one party commits fraud during the contract formation or performance, the injured party may recover in contract and tort. (Ibid.; see Harris v. Atlantic Richfield Co. (1993) 14 Cal.App.4th 79, 78.) Here, such conduct by defendant Ford has been alleged as Plaintiff pleads she would not have purchased the Subject Vehicle if defendant Ford had not failed to disclose the material fact of known defects with the Sync system. (Complaint, ¶44.)

  • Hearing

    Feb 27, 2020

VANESSA F. MARTINEZ VS. FORD MOTOR COMPANY, A DELAWARE CORPORATION

Atlantic Richfield Co. (1993) 14 Cal.App.4th 70, 78, 17 Cal.Rptr.2d 649 ["when one party commits a fraud during the contract formation or performance, the injured party may recover in contract and tort"].) [Emphasis added.] Robinson Helicopter, 34 Cal.4th at 989–990.

  • Hearing

    Feb 27, 2020

  • Type

    Contract

  • Sub Type

    Breach

RONALD BROWN VS ROBERT BLAINE, ET AL.

When one party commits fraud during the contract formation or performance, for example, the injured party may recover in both contract and tort. (Id.) Because Plaintiff has adequately alleged fraud in the inducement, his complaint is not barred by the economic loss rule.

  • Hearing

    Feb 26, 2020

  • Type

    Personal Injury/ Tort

  • Sub Type

    Fraud

REETZ FOX & BARTLETT LLP V. HIGHWAY RECYCLING, INC., ET AL.

.] [¶] ‘Whether an agreement to arbitrate exists is a threshold issue of contract formation and state contract law.’ [Citations.] ‘The party seeking to compel arbitration bears the burden of proving the existence of a valid arbitration agreement.’ [Citations.]” (Cohen v. TNP 2008 Participating Notes Program, LLC (2019) 31 Cal.App.5th 840, 858–859 (Cohen).)

  • Hearing

    Feb 25, 2020

ALICE EZROS VS HARTFORD FIRE INSURANCE COMPANY, ET AL.

“Essentially a sliding scale is invoked which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves.” [Citation] In other words, the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.” (Armendariz v.

  • Hearing

    Feb 25, 2020

  • Type

    Employment

  • Sub Type

    Wrongful Term

JULIA REYES VS PROLIANT SERVICES, INC., ET AL.

“Essentially a sliding scale is invoked which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves.” [Citation] In other words, the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.” (Armendariz v.

  • Hearing

    Feb 24, 2020

  • Type

    Employment

  • Sub Type

    Wrongful Term

MILLER V. INVESTMENT CONCEPTS, INC.

Essentially a sliding scale is invoked which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves. In other words, the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa. (Armendariz v.

  • Hearing

    Feb 11, 2020

ANA MANDUJANO VS THERESA LEON, ET AL.

“Essentially a sliding scale is invoked which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves.” [Citation] In other words, the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.” (Armendariz v.

  • Hearing

    Feb 10, 2020

  • Type

    Employment

  • Sub Type

    Wrongful Term

JULIO CESAR MARTINEZ DIAZ, ET AL. VS XPO LOGISTICS, INC., ET AL.

Courts invoke a sliding scale which disregards the regularity of the procedural process of the contract formation, that creates the contract terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves, i.e., the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to conclude the term is unenforceable, and vice versa. (Armendariz, supra, 24 Cal. 4th at p. 114.) i.

  • Hearing

    Feb 07, 2020

  • Type

    Employment

  • Sub Type

    Other Employment

1 2 3 4 5 6 7 8 9 10 ... 16     last » 

For full print and download access, please subscribe at https://www.trellis.law/.

Please wait a moment while we gather your results.