California Equipment Purchase and Sale Agreement
CALIFORNIA EQUIPMENT PURCHASE AND SALE AGREEMENT
Governed by the California Commercial Code and California Civil Code
NOTICE REGARDING CALIFORNIA LAW
This Agreement is governed exclusively by California law. Key California-specific provisions include:
- California Commercial Code Division 2 (California's enactment of UCC Article 2) governs this sale of goods
- California sales and use tax applies to this transaction; the California Department of Tax and Fee Administration (CDTFA) requires collection and remittance of applicable taxes on tangible personal property (Cal. Rev. & Tax. Code § 6051)
- California usury limits (Cal. Const. art. XV, § 1), when applicable, use a 10% annual cap for primarily personal, family, or household loans or forbearances and a separate formula for other covered purposes; exemptions and transaction classification must be checked
- California's 4-year statute of limitations for sales of goods applies (Cal. Com. Code § 2725)
- Prevailing party attorney fees are recoverable by contract under Cal. Civ. Code § 1717
AGREEMENT
This California Equipment Purchase and Sale Agreement ("Agreement") is entered into as of [__/__/____] ("Effective Date") by and between:
SELLER:
Name: [________________________________]
Entity Type: [________________________________]
State of Formation: [________________________________]
Principal Address: [________________________________]
CA Seller's Permit No. (CDTFA): [________________________________]
BUYER:
Name: [________________________________]
Entity Type: [________________________________]
State of Formation: [________________________________]
Principal Address: [________________________________]
CA Resale Certificate No. (if applicable): [________________________________]
(each a "Party" and together, the "Parties")
RECITALS
A. Seller owns or has the right to sell certain equipment described on Exhibit A (the "Equipment").
B. Buyer desires to purchase, and Seller desires to sell, the Equipment on the terms set forth in this Agreement.
C. The Parties intend this Agreement to constitute a contract for the sale of goods governed by Division 2 of the California Commercial Code (California's enactment of UCC Article 2).
D. The Equipment constitutes tangible personal property subject to California sales and use tax unless an exemption applies.
NOW, THEREFORE, for good and valuable consideration, the sufficiency of which is acknowledged, the Parties agree as follows:
ARTICLE 1 — DEFINITIONS
"Applicable Law" means all California and federal statutes, regulations, and ordinances applicable to this transaction, including the California Commercial Code, California Civil Code, California Revenue and Taxation Code, and regulations of the CDTFA.
"Business Day" means any day California Superior Courts are open for business.
"CDTFA" means the California Department of Tax and Fee Administration, the state agency responsible for administration of California sales and use tax.
"Closing" means the date on which title to the Equipment transfers to Buyer and the Purchase Price is paid in full.
"Delivery Point" means [________________________________], California.
"Equipment" means the items described in Exhibit A, including all accessories, manuals, and associated documentation.
"Inspection Period" means [____] calendar days following delivery of the Equipment to the Delivery Point.
"Lien" means any mortgage, pledge, security interest, encumbrance, or charge of any kind, including any UCC financing statement filed with the California Secretary of State.
"Manufacturing Exemption" means the partial sales and use tax exemption under Cal. Rev. & Tax. Code § 6377.1 for qualifying manufacturing and research and development equipment. The exemption reduces the applicable state tax component; remaining state, local, and district taxes may still apply.
"Purchase Price" has the meaning set forth in Section 3.1.
"Specifications" means the technical and functional specifications for the Equipment set forth in Exhibit A.
"Warranty Period" means [________________________________] following Buyer's acceptance of the Equipment.
ARTICLE 2 — SALE AND PURCHASE
2.1 Agreement to Sell. Subject to the terms of this Agreement, Seller sells, assigns, transfers, and conveys to Buyer all right, title, and interest in and to the Equipment, free and clear of all Liens.
2.2 Bill of Sale. At Closing, Seller shall deliver to Buyer a duly executed bill of sale in the form attached as Exhibit B, warranting good and marketable title to the Equipment.
2.3 UCC Lien Search. Prior to Closing, Buyer may conduct a UCC lien search with the California Secretary of State and the applicable county recorder to confirm that no Liens encumber the Equipment. Seller shall cooperate with any such search and shall provide UCC-3 termination statements for any existing financing statements.
ARTICLE 3 — PURCHASE PRICE AND PAYMENT
3.1 Purchase Price. Buyer shall pay Seller the total sum of $[________________________________] ("Purchase Price"), allocated as follows:
| Component | Amount |
|---|---|
| Equipment base price | $[________________________________] |
| Installation / commissioning (if applicable) | $[________________________________] |
| Shipping / freight to Delivery Point | $[________________________________] |
| Subtotal | $[________________________________] |
3.2 California Sales and Use Tax.
(a) Unless Buyer provides a valid California resale certificate (CDTFA-230) or other applicable exemption certificate prior to Closing, Seller shall collect and remit California sales tax on the transaction at the combined state and local rate applicable at the Delivery Point.
(b) If the Equipment qualifies for the California manufacturing and research equipment partial exemption (Cal. Rev. & Tax. Code § 6377.1), Buyer shall provide Seller with a completed CDTFA-230-M partial exemption certificate, which Seller shall retain as required by § 6377.1(c).
(c) Current California statewide base sales tax rate: 7.25%. District taxes may apply depending on the Delivery Point location. Buyer is responsible for verifying the applicable combined rate through the CDTFA rate lookup tool.
3.3 Payment Schedule.
☐ Option A — Lump Sum. The full Purchase Price (plus applicable tax) is due at Closing.
☐ Option B — Installment. The Purchase Price shall be paid as follows:
- Deposit: $[________________________________] due within [____] Business Days after the Effective Date
- Progress payment: $[________________________________] due on [__/__/____]
- Final payment: $[________________________________] due at Closing on [__/__/____]
3.4 Method of Payment. All payments shall be made by wire transfer to Seller's designated account or by cashier's check drawn on a California-chartered bank.
3.5 Late Payment Interest. Any amount not paid when due accrues interest at the rate of [____]% per annum, subject to applicable law. If California Constitution article XV, section 1 governs the charge and no exemption applies, the ceiling for a loan or forbearance used primarily for personal, family, or household purposes is 10% per annum; for other covered purposes it is the greater of 10% or 5% above the specified Federal Reserve Bank of San Francisco rate. Confirm the transaction's purpose and applicable rate before filling in the blank.
3.6 No Usury. Notwithstanding any provision of this Agreement, no interest or charge shall be collected, reserved, or taken that would cause the amounts payable to exceed the maximum permitted under California usury law (Cal. Const. Art. XV; Cal. Civ. Code § 1916-1 et seq.). Any excess interest collected shall be applied to reduce the Purchase Price balance or refunded to Buyer.
ARTICLE 4 — DELIVERY, RISK OF LOSS, AND TITLE
4.1 Delivery. Seller shall deliver the Equipment to the Delivery Point on or before [__/__/____]. Delivery terms are:
☐ FOB Delivery Point (risk passes upon tender at Delivery Point)
☐ FOB Seller's Location (risk passes when Equipment is placed with carrier)
☐ FCA (Incoterms 2020) [________________________________]
4.2 Risk of Loss Under California Law. Risk of loss passes under California Commercial Code §§ 2509 and 2510. If Buyer rightfully revokes acceptance, Buyer may, to the extent of a deficiency in Buyer's effective insurance, treat the risk as having rested on Seller from the beginning (§ 2510(2)). If Buyer repudiates or otherwise breaches as to conforming identified Equipment before risk passes, Seller may, to the extent of a deficiency in Seller's effective insurance, treat risk as resting on Buyer for a commercially reasonable time (§ 2510(3)).
4.3 Passage of Title; Security Interest. Title passes to Buyer when Seller completes the agreed physical delivery under Cal. Com. Code § 2401(2), subject to any applicable document-of-title rule. To secure the unpaid Purchase Price, Buyer grants Seller a purchase-money security interest in the Equipment and identifiable proceeds. Retaining title after delivery has only the effect of reserving a security interest under § 2401(1); Seller must satisfy applicable Division 9 attachment and perfection requirements and may file an appropriate financing statement.
4.4 Certificate of Origin / Title. For Equipment requiring registration with the California Department of Motor Vehicles (e.g., certain mobile equipment, vehicles), Seller shall deliver a clean California certificate of title or manufacturer's certificate of origin at Closing.
ARTICLE 5 — INSPECTION AND ACCEPTANCE
5.1 Right to Inspect. Under California Commercial Code § 2513, Buyer has the right to inspect the Equipment before payment or acceptance. Buyer shall conduct inspection during the Inspection Period.
5.2 Acceptance. The Equipment is deemed accepted upon the earlier of:
(a) Buyer's written notice of acceptance; or
(b) Expiration of the Inspection Period without Buyer issuing a Rejection Notice.
5.3 Rejection for Nonconformity. Under California Commercial Code § 2601, if the Equipment fails to conform to the Specifications in any respect, Buyer may:
(a) Reject the whole;
(b) Accept the whole; or
(c) Accept any commercial units and reject the rest.
5.4 Rejection Notice. If Buyer rejects, Buyer shall deliver written notice specifying the nonconformities ("Rejection Notice") within the Inspection Period. If Buyer possessed the Equipment before rejection and has no security interest in it, Buyer shall hold it with reasonable care at Seller's disposition long enough for Seller to remove it (Cal. Com. Code § 2602(2)(b)).
5.5 Seller's Cure Right. Under California Commercial Code § 2508, if time for performance has not yet expired, Seller may seasonably notify Buyer of intent to cure and deliver conforming Equipment within the contract time. If Buyer rejects a tender that Seller had reasonable grounds to believe would be acceptable, Seller has a further reasonable time to substitute a conforming tender.
5.6 Revocation of Acceptance. Buyer may revoke acceptance under California Commercial Code § 2608 if a nonconformity substantially impairs the value of the Equipment and:
(a) Buyer accepted on the reasonable assumption that the nonconformity would be cured, and it has not been seasonably cured; or
(b) Buyer accepted without discovery of the nonconformity, and acceptance was reasonably induced by the difficulty of discovery or by Seller's assurances.
ARTICLE 6 — REPRESENTATIONS AND WARRANTIES
6.1 Mutual Representations. Each Party represents that:
(a) It is duly organized and in good standing under California law (or its state of formation) and is qualified to do business in California;
(b) It has full authority to enter into and perform this Agreement; and
(c) This Agreement is enforceable against it in accordance with its terms.
6.2 Seller's Warranties.
(a) Title Warranty (Cal. Com. Code § 2312). Seller warrants good and marketable title to the Equipment, free of all Liens and encumbrances, and that the transfer is rightful.
(b) Express Warranty Against Third-Party Rights. Seller warrants that the Equipment, as delivered, does not infringe any third party's patent, trademark, or copyright or misappropriate a third party's trade secret, except to the extent a claim arises from Seller's compliance with specifications furnished by Buyer. This express warranty is separately agreed even if Seller is not a merchant regularly dealing in Equipment. The default statutory infringement warranty in Cal. Com. Code § 2312(3) applies, unless otherwise agreed, only to a merchant regularly dealing in goods of the kind; Buyer must hold Seller harmless against a claim arising from compliance with Buyer's specifications.
(c) Express Warranty of Conformity. The Equipment shall materially conform to the Specifications set forth in Exhibit A and shall be free from defects in material and workmanship for the duration of the Warranty Period.
(d) Implied Warranty of Merchantability (Cal. Com. Code § 2314). Unless validly disclaimed under Section 6.3, the law may imply a warranty that the Equipment is fit for ordinary use, adequately packaged and labeled, and conforms to applicable promises or affirmations on its container or label. This subsection does not create an additional express warranty.
(e) Implied Warranty of Fitness for Particular Purpose (Cal. Com. Code § 2315). If Seller has reason to know Buyer's particular purpose and Buyer relies on Seller's skill or judgment to select suitable Equipment, an implied warranty of fitness may arise unless validly disclaimed under Section 6.3. This subsection does not create an additional express warranty.
(f) Regulatory Compliance. The Equipment complies with all applicable California regulatory requirements, including Cal/OSHA standards (Cal. Lab. Code § 6300 et seq.) and applicable California Air Resources Board (CARB) regulations.
6.3 Warranty Disclaimer (If Applicable).
☐ Check only for a sale outside California's consumer-goods warranty rules when an implied-warranty disclaimer is otherwise permitted. Do not check for consumer goods: this Agreement gives express warranties in Section 6.2, and Cal. Civ. Code § 1793 bars disclaiming the implied warranties guaranteed by the Song-Beverly Act in such a sale. A consumer-goods sale without express warranties has a separate “as is” route under §§ 1792.4–1792.5 requiring a conspicuous pre-sale writing attached to the goods with specified risk and repair-cost disclosures; this checkbox and the text below do not supply that route. For a qualifying nonconsumer sale, the following applies:
EXCEPT AS EXPRESSLY SET FORTH IN SECTION 6.2(a)-(c), SELLER DISCLAIMS IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE TO THE EXTENT CALIFORNIA LAW PERMITS. THIS DISCLAIMER MUST SATISFY CAL. COM. CODE § 2316(2) AND DOES NOT LIMIT AN EXPRESS WARRANTY.
6.4 Warranty Period and Remedies. During the Warranty Period, Seller shall, at its option and expense: (a) repair the defective Equipment; (b) replace the defective Equipment with conforming Equipment; or (c) refund the portion of the Purchase Price attributable to the defective Equipment.
6.5 Statute of Limitations. Under California Commercial Code § 2725, an action for breach of any contract for the sale of goods must be commenced within four (4) years after the cause of action accrues. The Parties:
☐ Agree to the statutory 4-year period
☐ Agree to reduce the period to [____] year(s) (minimum 1 year per Cal. Com. Code § 2725(1))
ARTICLE 7 — CALIFORNIA-SPECIFIC COVENANTS
7.1 Compliance with California UCL. Each Party covenants that its performance under this Agreement shall not constitute an "unlawful, unfair, or fraudulent business act or practice" within the meaning of California Business and Professions Code § 17200 et seq. (the "Unfair Competition Law").
7.2 No Restraint of Trade. Consistent with California Business and Professions Code § 16600, this Agreement does not contain, and shall not be construed to impose, any non-compete restriction on either Party. Neither Party is restricted from engaging in any lawful profession, trade, or business after termination or expiration of this Agreement.
7.3 Consumer Legal Remedies Act (CLRA) Compliance. To the extent Buyer is a "consumer" purchasing Equipment primarily for personal, family, or household purposes, Seller acknowledges that the CLRA (Cal. Civ. Code § 1750 et seq.) may apply and that any waiver of CLRA rights is void and unenforceable (Cal. Civ. Code § 1751).
7.4 CDTFA Compliance. Seller represents that it holds a valid California seller's permit and will comply with all CDTFA reporting and remittance requirements for this transaction, including timely filing of returns and payment of sales tax collected.
7.5 Environmental Compliance. Seller represents that the Equipment complies with applicable California product emissions and labeling requirements, including CARB regulations and Proposition 65 (Safe Drinking Water and Toxic Enforcement Act of 1986), where applicable. Any CEQA review for a discretionary project approval is a separate public-agency process, not an equipment compliance standard.
7.6 Further Assurances. Each Party shall execute additional documents reasonably necessary to effectuate the purposes of this Agreement.
ARTICLE 8 — CONFIDENTIALITY
8.1 Obligations. Each Party shall maintain the confidentiality of proprietary information disclosed by the other Party in connection with this Agreement for a period of [____] years following the Effective Date.
8.2 California Trade Secrets. To the extent any Confidential Information constitutes a "trade secret" under the California Uniform Trade Secrets Act (Cal. Civ. Code § 3426 et seq.), protections apply indefinitely.
8.3 Permitted Disclosures. Confidentiality obligations do not restrict disclosures required by California law, court order, or subpoena, provided the disclosing Party gives prompt written notice to the other Party.
ARTICLE 9 — DEFAULT AND REMEDIES
9.1 Events of Default.
(a) Buyer Default: Failure to pay any amount when due; failure to accept conforming delivery; insolvency or bankruptcy.
(b) Seller Default: Failure to deliver the Equipment by the delivery deadline; delivery of materially nonconforming Equipment without timely cure; insolvency or bankruptcy.
9.2 Notice and Cure. The non-defaulting Party shall provide written notice specifying the default. The defaulting Party shall have [____] Business Days to cure (payment defaults) or [____] Business Days to cure (non-payment defaults).
9.3 Buyer's Remedies Under California Law. Upon Seller's uncured default, Buyer may exercise any remedy available under California Commercial Code Division 2, including:
(a) Cover (Cal. Com. Code § 2712) — purchase substitute equipment and recover the difference;
(b) Damages for non-delivery (Cal. Com. Code § 2713) — market price minus contract price;
(c) Specific performance (Cal. Com. Code § 2716) — where Equipment is unique or in other proper circumstances;
(d) Rescission (Cal. Civ. Code § 1689) — cancel the Agreement and recover amounts paid.
9.4 Seller's Remedies Under California Law. Upon Buyer's uncured default, Seller may:
(a) Withhold delivery (Cal. Com. Code § 2703);
(b) Resell the Equipment (Cal. Com. Code § 2706) and recover the difference;
(c) Recover the price (Cal. Com. Code § 2709) if resale is impracticable;
(d) Demand adequate assurance of performance (Cal. Com. Code § 2609).
9.5 Liquidated Damages. [If applicable:] The Parties agree that $[________________________________] constitutes a reasonable estimate of damages for [________________________________]. This liquidated damages provision is valid under California Civil Code § 1671(b), which presumes the validity of liquidated damages clauses in commercial contracts. The Party challenging this provision bears the burden of proving it was unreasonable at the time the Agreement was made.
9.6 Prevailing Party Attorney Fees. Pursuant to California Civil Code § 1717, in any action arising out of this Agreement, the prevailing party shall be entitled to recover its reasonable attorney fees, court costs, and litigation expenses. Under § 1717, where a contract provides for attorney fees to one party, the prevailing party — whether or not the party specified in the contract — is entitled to fees.
ARTICLE 10 — INDEMNIFICATION AND RISK ALLOCATION
10.1 Seller's Indemnification. Seller shall indemnify, defend, and hold harmless Buyer and its officers, directors, employees, and agents from Losses arising from:
(a) Breach of Seller's warranties;
(b) Title defects or Liens not disclosed;
(c) Third-party intellectual property infringement claims related to the Equipment;
(d) Personal injury or property damage caused by defective Equipment (product liability).
10.2 Limitation of Liability. EXCEPT FOR: (a) SELLER'S INDEMNIFICATION OBLIGATIONS; (b) EITHER PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT; OR (c) LIABILITY THAT CANNOT BE LIMITED UNDER CALIFORNIA LAW, NEITHER PARTY'S AGGREGATE LIABILITY SHALL EXCEED $[________________________________].
10.3 Consequential Damages Waiver. EXCEPT FOR SELLER'S INDEMNIFICATION OBLIGATIONS UNDER SECTION 10.1, NEITHER PARTY SHALL BE LIABLE FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES, INCLUDING LOST PROFITS. NOTE: For commercial loss, a consequential damages limit is valid unless proved unconscionable (Cal. Com. Code § 2719(3)). This damages exclusion does not apply to liability that cannot be exempted under Cal. Civ. Code § 1668.
10.4 Insurance. During the period from the Effective Date through expiration of the Warranty Period, Seller shall maintain commercial general liability insurance with limits of at least $[________________________________] per occurrence, naming Buyer as additional insured, with a California-admitted carrier.
10.5 Force Majeure. Neither Party is liable for delay caused by events beyond reasonable control, including natural disasters, government orders, California state emergency declarations, labor disputes, or acts of God. The affected Party shall provide prompt notice and use diligent efforts to resume performance.
ARTICLE 11 — DISPUTE RESOLUTION
11.1 Governing Law. This Agreement is governed by the laws of the State of California, including the California Commercial Code (Division 2), the California Civil Code, and the California Code of Civil Procedure, without regard to conflict-of-laws principles.
11.2 Exclusive Forum — California Superior Court. Subject to Section 11.3, the Parties submit to the exclusive jurisdiction of the California Superior Court for the County of [________________________________] and the United States District Court for the [________________________________] District of California. Each Party waives objections to venue and forum non conveniens.
11.3 Arbitration (Optional).
☐ Arbitration Elected. Disputes shall be resolved by binding arbitration administered by [________________________________] in [________________________________], California, under its commercial rules. The arbitrator shall apply California substantive law. Judgment on the award may be entered in any California Superior Court. Discovery shall be conducted in accordance with California Code of Civil Procedure § 1283.05.
☐ Arbitration Not Elected. Section 11.2 governs all disputes.
11.4 California State-Court Jury Rights. This document does not itself waive a jury trial in a California state court. After an action is filed there, a party may waive that right only through a method permitted by applicable law.
11.5 Statutes of Limitation.
- Written contract claims: 4 years (Cal. Code Civ. Proc. § 337)
- Sale of goods claims: 4 years (Cal. Com. Code § 2725)
- Fraud claims: 3 years (Cal. Code Civ. Proc. § 338(d))
ARTICLE 12 — GENERAL PROVISIONS
12.1 California Statute of Frauds. Once signed by the party against whom enforcement is sought, this Agreement serves as the record required by Cal. Com. Code § 2201(1) for a sale of goods priced at $500 or more, subject to that section's exceptions.
12.2 Entire Agreement. This Agreement (including all Exhibits) constitutes the entire agreement of the Parties and supersedes all prior oral or written understandings. Under California law, parol evidence of prior or contemporaneous oral agreements is inadmissible to contradict the terms of an integrated written agreement (Cal. Code Civ. Proc. § 1856).
12.3 Amendment and Waiver. Amendments require a writing signed by both Parties. Waivers are effective only if in writing and limited to the specific instance. Under California Commercial Code § 2209, a modification of a contract for the sale of goods needs no consideration to be binding.
12.4 Assignment. Neither Party may assign this Agreement without the other's prior written consent, except to a successor by merger or acquisition of substantially all assets. Any purported assignment in violation of this Section is void.
12.5 Severability. If any provision is held invalid by a California court, the remaining provisions remain in full force. The invalid provision shall be reformed to the minimum extent necessary.
12.6 Notices. All notices must be in writing and delivered by: (a) personal delivery; (b) certified U.S. mail, return receipt requested; or (c) nationally recognized overnight courier, to the addresses in the preamble or as updated by notice. Notices are effective upon receipt or refusal.
12.7 Electronic Signatures. This Agreement may be executed in counterparts. Electronic signatures are valid under the California Uniform Electronic Transactions Act (Cal. Civ. Code § 1633.1 et seq.) and the federal ESIGN Act.
12.8 Interpretation. Headings are for convenience only. "Including" means "including without limitation." Ambiguities shall not be construed against the drafter (Cal. Civ. Code § 1654 is expressly waived to the extent permitted by law).
EXECUTION
IN WITNESS WHEREOF, the Parties have executed this California Equipment Purchase and Sale Agreement as of the Effective Date.
SELLER:
Signature: [________________________________]
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]
BUYER:
Signature: [________________________________]
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]
EXHIBIT A — EQUIPMENT DESCRIPTION AND SPECIFICATIONS
| Item | Description | Make/Model | Serial No. | Year | Condition | Price |
|---|---|---|---|---|---|---|
| 1 | [________________________________] | [________________________________] | [________________________________] | [____] | ☐ New ☐ Used | $[________________________________] |
| 2 | [________________________________] | [________________________________] | [________________________________] | [____] | ☐ New ☐ Used | $[________________________________] |
| 3 | [________________________________] | [________________________________] | [________________________________] | [____] | ☐ New ☐ Used | $[________________________________] |
Technical Specifications: [________________________________]
Included Accessories/Manuals: [________________________________]
Current Location of Equipment: [________________________________], California [____]
EXHIBIT B — FORM OF BILL OF SALE
[To be attached — California-compliant bill of sale transferring title to Equipment]
EXHIBIT C — UCC FINANCING STATEMENT RELEASES
[Attach UCC-3 termination statements for any existing financing statements, if applicable]
Sources and References
- California Commercial Code, Division 2 (Sales): https://leginfo.legislature.ca.gov/faces/codesTOCSelected.xhtml?tocCode=COM
- California Civil Code (Contracts): https://leginfo.legislature.ca.gov/faces/codesTOCSelected.xhtml?tocCode=CIV
- California Code of Civil Procedure (Statute of Limitations): https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CCP§ionNum=337
- CDTFA Sales and Use Tax Information: https://cdtfa.ca.gov/taxes-and-fees/sutprograms.htm
- CDTFA Manufacturing Equipment Partial Exemption: https://cdtfa.ca.gov/industry/manufacturing-and-research-and-development-equipment-exemption/
- California Constitution Article XV (Usury): https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CONS§ionNum=SECTION+1.&article=XV
- California Unfair Competition Law (Bus. & Prof. Code § 17200): https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=17200.&lawCode=BPC
- California Non-Compete Prohibition (Bus. & Prof. Code § 16600): https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=BPC§ionNum=16600.
About this template
- Last updated
- October 28, 2026
- Jurisdiction
- California
- Category
- Contracts & Agreements
Legal authority
- Cal. Com. Code Division 2 (UCC Article 2 — Sales)
- Cal. Com. Code § 2314 (Implied Warranty of Merchantability)
- Cal. Com. Code § 2315 (Implied Warranty of Fitness)
- Cal. Com. Code § 2601 (Buyer's Rights on Improper Delivery)
- Cal. Com. Code § 2706 (Seller's Resale of Goods)
- Cal. Com. Code § 2725 (Statute of Limitations — Sale of Goods)
- Cal. Civ. Code § 1622 (Oral Contracts Default Rule)
- Cal. Civ. Code § 1624 (Statute of Frauds)
- Cal. Civ. Code § 1671 (Liquidated Damages — Commercial Contracts)
- Cal. Civ. Code § 1689 (Rescission of Contracts)
- Cal. Const. Art. XV (Usury Limitations)
- Cal. Code Civ. Proc. § 337 (4-Year Statute of Limitations — Written Contracts)
- Cal. Civ. Code § 1717 (Prevailing Party Attorney Fees)
- Cal. Rev. & Tax. Code § 6051 (Sales Tax on Tangible Personal Property)
- Cal. Rev. & Tax. Code § 6377.1 (Manufacturing and R&D Partial Exemption)
- Cal. Bus. & Prof. Code § 17200 et seq. (Unfair Competition Law)
A contract is a written record of what two or more parties agreed to and what happens if someone does not follow through. Clear language, defined terms, and clean signature blocks keep disputes small and enforceable. The most common mistakes in contracts come from vague promises, missing details about timing or payment, and skipping standard protective clauses like governing law and dispute resolution.
Not legal advice
This template is provided for informational purposes. We recommend having an attorney review any legal document before signing, especially for high-value or complex matters.
Checked against the law it cites
The statutes this template relies on are listed under Legal authority.
Cal. Com. Code § 2201(1) (checked October 28, 2026): "a contract for the sale of goods for the price of five hundred dollars ($500) or more"
Cal. Com. Code § 2602(2)(b) (checked October 24, 2026): "hold them with reasonable care"
Cal. Com. Code § 2725(1) (checked October 24, 2026): "the parties may reduce the period of limitation to not less than one year but may not extend it"
Cal. Com. Code § 2719(3) (checked October 24, 2026): "Limitation of consequential damages where the loss is commercial is valid unless it is proved that the limitation is unconscionable."
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