Prejudgment Interest Rules in California

At a glance

Requirements one by one

Governing law

Cal. Civ. Code § 3287(a) gives a person with damages "certain, or capable of being made certain by calculation" interest from the day the right to recover vested. Section 3287(b) addresses an unliquidated contract claim. Section 3288 permits the jury to give interest for breach of a noncontract obligation or for oppression, fraud, or malice.

Interest rate

Under § 3289, a legal contract rate continues after breach; a contract entered after January 1, 1986 without a stated rate bears 10% annual interest after breach. The California Supreme Court explained in Naranjo that most tort and other noncontract claims instead use the 7% default in Cal. Const. art. XV, § 1 when no statute supplies a different rate. The default in § 3289(b) excludes a note secured by a deed of trust on real property.

When interest starts running

For a fixed debt, § 3287(a) starts interest on the day the right to recover vested. For an unliquidated contract claim, § 3287(b) allows the court to choose a date before judgment, but "in no event earlier than the date the action was filed." Section 3288 gives the jury discretion over a noncontract award without specifying a universal start date.

Mandatory or discretionary

The words "is entitled also to recover interest" in § 3287(a) make interest mandatory when the loss and vesting date meet that provision's test; this can include a calculable noncontract loss. Under § 3287(b), the court "may" award interest for an unliquidated contract claim, and § 3288 gives the jury discretion on its covered claims.

Claims against the government

Section 3287(a) expressly includes "the state or any county, city" among debtors subject to its fixed-damages rule. For a tax or fee claim producing a judgment against a public entity, § 3287(c) instead uses a one-year Treasury-yield measure capped at 7% annually, with a different Treasury-based calculation when the judgment becomes enforceable.

Other exceptions

In a personal-injury action, § 3291 gives a plaintiff who obtains a judgment more favorable than an unaccepted Code Civ. Proc. § 998 offer 10% annual interest from the first exceeded offer until satisfaction. The section excludes a public entity and a public employee acting within the scope of employment.

What trips people up

The general 10% rate in Code Civ. Proc. § 685.010(a)(1) concerns an unsatisfied money judgment after entry; paragraph (a)(2) also sets 5% for specified medical-expense and personal-debt judgments. Neither paragraph replaces the Civil Code's prejudgment rate rules. The Civil Code sections cited here specify annual rates without a general compounding schedule; the source of any claimed compounding must be checked separately.

Common questions

Can interest stop when payment is legally barred? Section 3287(a) excepts a period when the debtor is prevented by law, or by the creditor's act, from paying the debt.

Does the 10% contract default cover a deed-of-trust note? Section 3289(b) expressly excludes a note secured by a deed of trust on real property from that default.

Statutes and sources

• Cal. Civ. Code § 3287(a) — “A person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in the person upon a particular day, is entitled also to recover interest thereon from that day, except when the debtor is prevented by law, or by the act of the creditor from paying the debt. This section is applicable to recovery of damages and interest from any debtor, including the state or any county, city, city and county, municipal corporation, public district, public agency, or any political subdivision of the state.” Official source, accessed 2026-10-06.
• Cal. Civ. Code § 3287(b) — “Every person who is entitled under any judgment to receive damages based upon a cause of action in contract where the claim was unliquidated, may also recover interest thereon from a date prior to the entry of judgment as the court may, in its discretion, fix, but in no event earlier than the date the action was filed.” Official source, accessed 2026-10-06.
• Cal. Civ. Code § 3287(c) — “Unless another statute provides a different interest rate, in a tax or fee claim against a public entity that results in a judgment against the public entity, interest shall accrue at a rate equal to the weekly average one year constant maturity United States Treasury yield, but shall not exceed 7 percent per annum. That rate shall control until the judgment becomes enforceable under Section 965.5 or 970.1 of the Government Code, at which time interest shall accrue at an annual rate equal to the weekly average one year constant maturity United States Treasury yield at the time of the judgment plus 2 percent, but shall not exceed 7 percent per annum.” Official source, accessed 2026-10-06.
• Cal. Civ. Code § 3288 — “In an action for the breach of an obligation not arising from contract, and in every case of oppression, fraud, or malice, interest may be given, in the discretion of the jury.” Official source, accessed 2026-10-06.
• Cal. Civ. Code § 3289 — “(a) Any legal rate of interest stipulated by a contract remains chargeable after a breach thereof, as before, until the contract is superseded by a verdict or other new obligation. (b) If a contract entered into after January 1, 1986, does not stipulate a legal rate of interest, the obligation shall bear interest at a rate of 10 percent per annum after a breach. For the purposes of this subdivision, the term contract shall not include a note secured by a deed of trust on real property.” Official source, accessed 2026-10-06.
• Cal. Civ. Code § 3291 — “In any action brought to recover damages for personal injury sustained by any person resulting from or occasioned by the tort of any other person, corporation, association, or partnership, whether by negligence or by willful intent of the other person, corporation, association, or partnership, and whether the injury was fatal or otherwise, it is lawful for the plaintiff in the complaint to claim interest on the damages alleged as provided in this section. If the plaintiff makes an offer pursuant to Section 998 of the Code of Civil Procedure which the defendant does not accept prior to trial or within 30 days, whichever occurs first, and the plaintiff obtains a more favorable judgment, the judgment shall bear interest at the legal rate of 10 percent per annum calculated from the date of the plaintiff’s first offer pursuant to Section 998 of the Code of Civil Procedure which is exceeded by the judgment, and interest shall accrue until the satisfaction of judgment. This section shall not apply to a public entity, or to a public employee for an act or omission within the scope of employment, and neither the public entity nor the public employee shall be liable, directly or indirectly, to any person for any interest imposed by this section.” Official source, accessed 2026-10-06.
• Cal. Const. art. XV, § 1 — “The rate of interest upon a judgment rendered in any court of this State shall be set by the Legislature at not more than 10 percent per annum. Such rate may be variable and based upon interest rates charged by federal agencies or economic indicators, or both. In the absence of the setting of such rate by the Legislature, the rate of interest on any judgment rendered in any court of the State shall be 7 percent per annum.” Official source, accessed 2026-10-06.
• Cal. Code Civ. Proc. § 685.010(a)(1) — “Except as provided in paragraph (2), interest accrues at the rate of 10 percent per annum on the principal amount of a money judgment remaining unsatisfied.” Official source, accessed 2026-10-06.
• Cal. Code Civ. Proc. § 685.010(a)(2) — “For judgments entered on or after January 1, 2023, or where an application for renewal of judgment is filed on or after January 1, 2023, interest accrues at the rate of 5 percent per annum on the principal amount of a money judgment remaining unsatisfied in the following cases: (i) The principal amount of a money judgment of under two hundred thousand dollars ($200,000) remaining unsatisfied against a debtor for a claim related to medical expenses. (ii) The principal amount of a money judgment of under fifty thousand dollars ($50,000) remaining unsatisfied against a debtor for a claim related to personal debt.” Official source, accessed 2026-10-06.
• Naranjo v. Spectrum Security Services, Inc., 13 Cal.5th 93 (2022) — “Here, we agree with the Court of Appeal that the 7 percent default rate set by the state Constitution applies. (See Cal. Const., art. XV, § 1.)” Official source, accessed 2026-10-06.