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- California law defines what a contract is in plain language
- California usually looks for several basic building blocks before enforcing a contract
- California contracts can be written, spoken, or implied by conduct
- Some California agreements are commonly discussed as needing a writing
- Electronic signatures may satisfy writing and signature rules under California and federal law
- Some agreements may be treated as void or limited even when there is a signed document
- Contract disputes often involve performance problems or disagreements about what the contract means
- Many contracts include dispute resolution terms that affect how disagreements are handled
- Appeals are part of the court system but are different from a new trial
- Sources
Key Facts
- State level: California law defines a contract as an agreement to do or not to do a certain thing under California Civil Code section 1549.
- State level: California lists capacity, consent, a lawful object, and consideration as essential to the existence of a contract under California Civil Code section 1550.
- State level: California recognizes both express contracts and implied contracts in the Civil Code, meaning agreements may be shown by words or by conduct.
- State level: California generally allows oral contracts, while also having “statute of frauds” categories that may require a writing under California Civil Code section 1624.
- Federal and state: California’s Uniform Electronic Transactions Act and the federal E SIGN Act both address when electronic records and electronic signatures may carry legal effect.
- State level: A California court may address “unconscionable” contract terms using the framework in California Civil Code section 1670.5.
- State level: Some agreements may be treated as void in California if the contract’s single object is unlawful, impossible, or too vague to be ascertainable under California Civil Code section 1598.
- Federal and state: Contract disputes are usually handled under state law in state courts, but federal rules may matter in specific settings such as interstate commerce and certain consumer disclosures.
As of February 2026, this article reflects publicly available California and federal legal sources, and contract rules can change through new laws and court decisions.
California law defines what a contract is in plain language
In California, “what is a contract” often starts with a simple statutory definition: a contract is an agreement to do or not to do a certain thing. That definition appears in California Civil Code section 1549, and it covers many everyday and business agreements, from service arrangements to sales terms.
California usually looks for several basic building blocks before enforcing a contract
Under California law, it is “essential to the existence of a contract” that there be (1) parties capable of contracting, (2) their consent, (3) a lawful object, and (4) a sufficient cause or consideration, as stated in California Civil Code section 1550.
California contracts can be written, spoken, or implied by conduct
California contract law recognizes that contracts can be “express” or “implied.” The Civil Code explains that an express contract states its terms in words (which can be spoken or written), while an implied contract is shown by conduct and the surrounding circumstances.
California also states that all contracts may be oral except those specially required by statute to be in writing, as described in California Civil Code section 1622, which helps explain why some verbal deals are treated seriously while others are not.
Some California agreements are commonly discussed as needing a writing
California’s statute of frauds rules are primarily found in Civil Code section 1624, which lists several categories of contracts that are “invalid” unless there is a writing signed by the party to be charged (or that party’s agent). For example, the statute includes certain credit agreements over $100,000 (as defined in the statute) and various types of real property and longer term agreements.
In everyday terms, statute of frauds disputes often happen because people disagree about whether an agreement had to be written down to be enforceable, or whether the available documents are enough to count as a writing under the statute.
Electronic signatures may satisfy writing and signature rules under California and federal law
California has adopted the Uniform Electronic Transactions Act in Civil Code sections 1633.1 through 1633.17, and one key provision states that a record or signature may not be denied legal effect solely because it is electronic, and that electronic records and electronic signatures can satisfy “writing” and “signature” requirements in many situations under California Civil Code section 1633.7.
California’s UETA generally applies only where the parties have agreed to conduct the transaction by electronic means, and it includes rules about how that agreement may be determined from the context and surrounding circumstances, including the parties’ conduct, in California Civil Code section 1633.5.
At the federal level, the Electronic Signatures in Global and National Commerce Act (E SIGN) contains a similar general rule that electronic signatures and electronic contracts may not be denied legal effect solely because they are in electronic form, in 15 U.S.C. section 7001.
Some agreements may be treated as void or limited even when there is a signed document
Not every signed paper (or clicked agreement) ends up being enforceable as a contract. For example, California Civil Code section 1598 describes situations where a contract with a single object may be void when that object is unlawful, impossible, or so vague as to be wholly unascertainable.
California also has a statute addressing “unconscionable” contract clauses, which is a legal concept courts may use when terms are unusually unfair under the circumstances; Civil Code section 1670.5 describes options a court may have, such as refusing to enforce a contract, enforcing the remainder without the unconscionable clause, or limiting an unconscionable clause to avoid an unconscionable result.
Contract disputes often involve performance problems or disagreements about what the contract means
In business settings, contract disputes often relate to whether a party did what the contract required, whether the parties agreed to essential terms, and what money damages (if any) are legally available when a contract is broken. California Courts’ self help materials discuss common contract issues in the context of breach of contract cases on the California Courts breach of contract page.
Because contracts can be written, verbal, or implied by conduct, a major issue in many disputes is proof: what the agreement was, what the terms meant, and what evidence shows the parties’ shared understanding.
Many contracts include dispute resolution terms that affect how disagreements are handled
Some contracts include clauses about negotiation, mediation, arbitration, where a lawsuit may be brought, which state’s law applies, and whether attorney’s fees may be available. These provisions can affect the forum and process of resolving a dispute, although their enforceability may depend on the wording and the surrounding facts.
Appeals are part of the court system but are different from a new trial
When a case is decided in a trial court, an appeal generally asks a higher court to review the trial court’s decision rather than re hear the case from the beginning. California Courts provides general information about the process on its Court of Appeal information page.
Appeal rights, deadlines, and procedures can differ based on the type of case and the court involved, and they can be highly technical.
