California Codes

Cal. Civil Code § 1671 (2026)

✓ current as of May 2026

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(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.

Notes of Decisions

Cited in 160 cases (37 in the last 5 years), 1932–2025 · leading case: Bank of the West v. Superior Court, 833 P.2d 545 (Cal. 1992).

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Bank of the West v. Superior Court, 833 P.2d 545 (Cal. 1992). · cites it 10× “), and a state statute that prohibits excessive liquidated damages (Civ. Code, § 1671). The Fallat plaintiffs also alleged that the loans were unconscionable and that the Bank had breached the covenant of good faith and fair dealing.”

In Re DirecTV Early Cancellation Litig., 738 F. Supp. 2d 1062 (C.D. Cal. 2010). · cites it 10× “; and (6) invalid liquidation damages in violation of Cal. Civil Code § 1671 . Plaintiffs assert claims Seven through Seventeen “in the alternative” and only “[t]o the extent that California law is ruled inapplicable to non-California resident Plaintiffs.”

Roling v. E Trade Sec., LLC, 756 F. Supp. 2d 1179 (N.D. Cal. 2010). · cites it 6× “Plaintiffs Joseph Roling and Alexander Landvater brought this putative class action against E*Trade Securities LLC (“E*Trade”) alleging breach of contract, unjust enrichment, and violations of California Civil Code sections 1671 and 17200 et seq.”

Jade Fashion & Co. v. Harkham Indus., Inc., 229 Cal. App. 4th 635 (Cal. Ct. App. 2014). · cites it 3× “Under Civil Code section 1671, “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…”

East West Bank v. Altadena Lincoln Crossing, LLC, 598 B.R. 633 (C.D. Cal. 2019). · cites it 8× “" See Cal. Civ. Code § 1671 (b). As the party challenging the default interest provision, Altadena bears the burden of proving the default interest provision is unreasonable.”

Langan v. United Servs. Auto. Ass'n, 69 F. Supp. 3d 965 (N.D. Cal. 2014). · cites it 4× “§§ 1665d and 1637, against the USAA Defendants; (4) “breach” of California’s Song-Beverly Credit Card Act against the USAA Defendants; (5) breach of contract against the USAA Defendants, the Experi-an Defendants, and Gulf Credit Services; (6) “breach” of California Civil Code §…”

Van Curen v. Escamilla (In Re VEC Farms, LLC), 395 B.R. 674 (Bankr. N.D. Cal. 2008). · cites it 10× “The Family Defendants also argued that the judgment requested by the Trustee would be an unenforceable penalty prohibited by Cal. Civ.Code § 1671 and § 3275. [AP Docket no.”

Ballard v. Equifax Check Servs., Inc., 158 F. Supp. 2d 1163 (E.D. Cal. 2001). · cites it 6× “]”); Irwin, 96 F.Supp.2d at 976 (“[Even if there were evidence of an express agreement to pay the service charge, the service charge agreement would be a void liquidated damages provision under California Civil Code § 1671].”

United Sav. & Loan Ass'n v. Reeder Dev. Corp., 57 Cal. App. 3d 282 (Cal. Ct. App. 1976). · cites it 4× “" Civil Code section 1671 provides: "The parties to 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…”

Ridgley v. Topa Thrift & Loan Assn., 953 P.2d 484 (Cal. 1998). · cites it 2× “Under the parties' loan agreement, plaintiffs owed defendant a prepayment fee at the time of sale only if plaintiffs had been more than 15 days late with any scheduled interest payment or had defaulted on any other contractual obligation to defendant; the fee was imposed here…”

Smiley v. Citibank (South Dakota), N. A., 517 U.S. 735 (1996). “1 By way of common-law claims, petitioner’s complaint alleged breach of duty of good faith and fair dealing; unjust enrichment; fraud and deceit; negligent misrepresentation; and breach of contract.”

Craigslist, Inc. v. NATUREMARKET, INC., 694 F. Supp. 2d 1039 (N.D. Cal. 2010). “Cal. Civ.Code § 1671. Additionally, pursuant to Plaintiffs California Penal Code section 502, inducing breach of contract, intentional interference with contractual relations, and fraud claims, Plaintiff may seek punitive or exemplary damages because Defendants’ conduct was…”

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— Cal. Civil Code § 1671(b) — 21 cases

East West Bank v. Altadena Lincoln Crossing, LLC, 598 B.R. 633 (C.D. Cal. 2019). “" See Cal. Civ. Code § 1671 (b). As the party challenging the default interest provision, Altadena bears the burden of proving the default interest provision is unreasonable.”

Langan v. United Servs. Auto. Ass'n, 69 F. Supp. 3d 965 (N.D. Cal. 2014). “§§ 1665d and 1637, against the USAA Defendants; (4) “breach” of California’s Song-Beverly Credit Card Act against the USAA Defendants; (5) breach of contract against the USAA Defendants, the Experi-an Defendants, and Gulf Credit Services; (6) “breach” of California Civil Code §…”

Van Curen v. Escamilla (In Re VEC Farms, LLC), 395 B.R. 674 (Bankr. N.D. Cal. 2008). “The Family Defendants also argued that the judgment requested by the Trustee would be an unenforceable penalty prohibited by Cal. Civ.Code § 1671 and § 3275. [AP Docket no.”

Dollar Tree Stores Inc. v. Toyama Partners LLC, 875 F. Supp. 2d 1058 (N.D. Cal. 2012).

Radisson Hotels Int'l, Inc. v. Majestic Towers, Inc., 488 F. Supp. 2d 953 (C.D. Cal. 2007).

— Cal. Civil Code § 1671(c) — 3 cases

In Re DirecTV Early Cancellation Litig., 738 F. Supp. 2d 1062 (C.D. Cal. 2010). “; and (6) invalid liquidation damages in violation of Cal. Civil Code § 1671 . Plaintiffs assert claims Seven through Seventeen “in the alternative” and only “[t]o the extent that California law is ruled inapplicable to non-California resident Plaintiffs.”

Walter v. Hughes Commc'ns, Inc., 682 F. Supp. 2d 1031 (N.D. Cal. 2010).

Ballard v. Equifax Check Servs., Inc., 158 F. Supp. 2d 1163 (E.D. Cal. 2001). “]”); Irwin, 96 F.Supp.2d at 976 (“[Even if there were evidence of an express agreement to pay the service charge, the service charge agreement would be a void liquidated damages provision under California Civil Code § 1671].”

— Cal. Civil Code § 1671(c)(1) — 2 cases

Bayol v. Zipcar, Inc., 78 F. Supp. 3d 1252 (N.D. Cal. 2015).

Zeff v. Greystar California, Inc. (N.D. Cal. 2021).

— Cal. Civil Code § 1671(d) — 15 cases

Pitzer Coll. v. Indian Harbor Ins. Co., 447 P.3d 669 (Cal. 2019).

William Bauer v. Atlantis Events, Inc., 645 F. App'x 545 (9th Cir. 2016).

Bayol v. Zipcar, Inc., 78 F. Supp. 3d 1252 (N.D. Cal. 2015).

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