SECTIONS 1301-1310 - California Statutes

COMMERCIAL CODE

SECTION 1301-1310

1301. (a) Except as otherwise provided in this section, when a
transaction bears a reasonable relation to this state and also to
another state or nation, the parties may agree that the law either of
this state or of the other state or nation shall govern their rights
and duties.
(b) In the absence of an agreement effective under subdivision
(a), and except as provided in subdivision (c), this code applies to
transactions bearing an appropriate relation to this state.
(c) If one of the following provisions specifies the applicable
law, that provision governs and a contrary agreement is effective
only to the extent permitted by the law so specified:
(1) Section 2402.
(2) Section 4102.
(3) Section 5116.
(4) Section 6103.
(5) Section 8110.
(6) Sections 9301 to 9307, inclusive.
(7) Sections 10105 and 10106.
(8) Section 11507.

1302. (a) Except as otherwise provided in subdivision (b) or
elsewhere in this code, the effect of provisions of this code may be
varied by agreement.
(b) The obligations of good faith, diligence, reasonableness, and
care prescribed by this code may not be disclaimed by agreement. The
parties, by agreement, may determine the standards by which the
performance of those obligations is to be measured if those standards
are not manifestly unreasonable. Whenever this code requires an
action to be taken within a reasonable time, a time that is not
manifestly unreasonable may be fixed by agreement.
(c) The presence of certain provisions of this code of the phrase
"unless otherwise agreed," or words of similar import, does not imply
that the effect of other provisions may not be varied by agreement
under this section.

1303. (a) A "course of performance" is a sequence of conduct
between the parties to a particular transaction that exists if:
(1) the agreement of the parties with respect to the transaction
involves repeated occasions for performance by a party; and
(2) the other party, with knowledge of the nature of the
performance and opportunity for objection to it, accepts the
performance or acquiesces in it without objection.
(b) A "course of dealing" is a sequence of conduct concerning
previous transactions between the parties to a particular transaction
that is fairly to be regarded as establishing a common basis of
understanding for interpreting their expressions and other conduct.
(c) A "usage of trade" is any practice or method of dealing having
such regularity of observance in a place, vocation, or trade as to
justify an expectation that it will be observed with respect to the
transaction in question. The existence and scope of such a usage must
be proved as facts. If it is established that such a usage is
embodied in a trade code or similar record, the interpretation of the
record is a question of law.
(d) A course of performance or course of dealing between the
parties or usage of trade in the vocation or trade in which they are
engaged or of which they are or should be aware is relevant in
ascertaining the meaning of the parties' agreement, may give
particular meaning to specific terms of the agreement, and may
supplement or qualify the terms of the agreement. A usage of trade
applicable in the place in which part of the performance under the
agreement is to occur may be so utilized as to that part of the
performance.
(e) Except as otherwise provided in subdivision (f), the express
terms of an agreement and any applicable course of performance,
course of dealing, or usage of trade must be construed whenever
reasonable as consistent with each other. If such a construction is
unreasonable:
(1) express terms prevail over course of performance, course of
dealing, and usage of trade;
(2) course of performance prevails over course of dealing and
usage of trade;
(3) course of dealing prevails over usage of trade.
(f) Subject to Section 2209, a course of performance is relevant
to show a waiver or modification of any term inconsistent with the
course of performance.
(g) Evidence of a relevant usage of trade offered by one party is
not admissible unless that party has given the other party notice
that the court finds sufficient to prevent unfair surprise to the
other party.

1304. Every contract or duty within this code imposes an obligation
of good faith in its performance and enforcement.

1305. (a) The remedies provided by this code shall be liberally
administered to the end that the aggrieved party may be put in as
good a position as if the other party had fully performed but neither
consequential or special damages nor penal damages may be had except
as specifically provided in this code or by other rule of law.
(b) Any right or obligation declared by this code is enforceable
by action unless the provision declaring it specifies a different and
limited effect.

1306. A claim or right arising out of an alleged breach may be
discharged in whole or in part without consideration by agreement of
the aggrieved party in an authenticated record.

1307. (1) A bill of lading, policy or certificate of insurance,
official weigher's or inspector's certificate, consular invoice, or
any other document authorized or required by the contract to be
issued by a third party is admissible as evidence of the facts stated
in the document by the third party in any action arising out of the
contract that authorized or required the document.
(2) In any action arising out of the contract that authorized or
required the document referred to in subdivision (1):
(a) A document in due form purporting to be the document referred
to in subdivision (1) is presumed to be authentic and genuine. The
presumption is a presumption affecting the burden of producing
evidence.
(b) If the document is found to be authentic and genuine, the
facts stated in the document by the third party are presumed to be
true. The presumption is a presumption affecting the burden of proof.

1308. (a) A party that with explicit reservation of rights performs
or promises performance or assents to performance in a manner
demanded or offered by the other party does not thereby prejudice the
rights reserved. Such words as "without prejudice," "under protest"
or the like are sufficient.
(b) Subdivision (a) does not apply to an accord and satisfaction.

1309. A term providing that one party or that party's successor in
interest may accelerate payment or performance or require collateral
or additional collateral "at will" or when the party "deems itself
insecure," or words of similar import, means that the party has power
to do so only if that party in good faith believes that the prospect
of payment or performance is impaired. The burden of establishing
lack of good faith is on the party against which the power has been
exercised.

1310. An obligation may be issued as subordinated to performance of
another obligation of the person obligated, or a creditor may
subordinate its right to performance of an obligation by agreement
with either the person obligated or another creditor of the person
obligated. Subordination does not create a security interest as
against either the common debtor or a subordinated creditor.