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Understanding what constitutes a valid contract in California

As some California residents may know, a contract does not necessarily have to be in writing. If an individual or an entity makes a statement that another party believes to be a promise to take action, it could be considered a contract by a judge.

If such a promise or statement causes another party to suffer financial damage, the party that made the statement may be held liable for those damages. A court will in most cases only consider a statement to be like a contract if the person relying on the promise can prove that such reliance is both reasonable and foreseeable.

For instance, if an individual was offered a job at a set salary and that person may quits their other job because of offer, the employer's failure to hire that person might make them liable for the individual's lost earnings. However, that person may not take legal action for lost benefits or other perks caused by quitting an existing job unless similar benefits were promised as part of the new job offer.

In the event that an individual suffers monetary damage due to relying on a reasonable promise made by another party, reneging on that promise could be considered breach of contract. A business law attorney may be able to review the case to determine if a contract was implied between the two parties. If there was, the breached party may be able to recover actual damages. Settlements may be reached outside of court or a financial award may be granted after a case goes to trial.

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Creative Solutions for Complex Legal Issues

Contact Henry B. LaTorraca

400 Oceangate
Suite 700
Long Beach, CA 90802-4306

Phone: 562-216-2942
Fax: 562-216-2943
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