California Civil Code Section 1671
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California Laws > Civil Code > California Civil Code Section 1671
1671. (a) This section does not apply in any case where another
statute expressly applicable to the contract prescribes the rules or
standard for determining the validity of a provision in the contract
liquidating the damages for the breach of the contract.
(b) Except as provided in subdivision (c), a provision in a
contract liquidating the damages for the breach of the contract is
valid unless the party seeking to invalidate the provision
establishes that the provision was unreasonable under the
circumstances existing at the time the contract was made.
(c) The validity of a liquidated damages provision shall be
determined under subdivision (d) and not under subdivision (b) where
the liquidated damages are sought to be recovered from either:
(1) A party to a contract for the retail purchase, or rental, by
such party of personal property or services, primarily for the party'
s personal, family, or household purposes; or
(2) A party to a lease of real property for use as a dwelling by
the party or those dependent upon the party for support.
(d) In the cases described in subdivision (c), a provision in a
contract liquidating damages for the breach of the contract is void
except that the parties to such a contract may agree therein upon an
amount which shall be presumed to be the amount of damage sustained
by a breach thereof, when, from the nature of the case, it would be
impracticable or extremely difficult to fix the actual damage.
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Last modified: March 17, 2014