The Conflict of Laws in California in a Breach of Contract
Parties residing in different states must resolve a breach of contract matter under California law if there is no governing law clause when the contract was made in California, or performed in California, pursuant to California civil code, section 1646.
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Contracts under $250,000
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Under California civil code, section 1646.5, parties to contracts involving transactions under $250,000 may agree to be governed by the laws of the state of California, even if the contract or breach has no relationship to the state of California. Contracts for personal services or for personal, household or family purposes do not apply under section 1646.5.
Governing Law Clause
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Including a California governing law clause in your contract will avoid conflict of law issues if the contract is going to be performed in California or the contract is entered into in California. The governing law clause makes it clear that contract dispute matters that cannot be resolved will be litigated in California and that both parties automatically consent to the jurisdiction of the federal or state courts located in California.
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Attorney Assistance
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Consult with a California attorney for advice regarding breach of contract matters. The attorney can advise you of your rights, remedies and obligations under California law, and represent you in court.
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