Business & Contract Law ✦ Contracts
The Other Side Wrote It for the Other Side. Read It Like That.
Customer agreements, vendor contracts, service agreements, commercial leases, independent contractor agreements, and the personal guaranty buried on page nine. North Star Law Firm drafts contracts to California law and reviews the ones you are handed, with the financial exposure quantified rather than described. Attorney-CPA. Flat fee. Statewide.
The Short Answer
Every contract you sign is a risk you priced. Make sure you know the price.
A contract does three things: it says who does what, it says who pays for what, and it decides who bears the loss when something goes wrong. The first two are usually clear. The third is where the money is, and it lives in the indemnity, the limitation of liability, the warranty, the termination and renewal terms, the attorney fee clause, and the guaranty. California adds rules of its own that override what the document says: non-competes are void, contractor agreements are judged by the ABC test, consumer auto-renewals must meet disclosure rules, and an attorney fee clause that favors one side is made reciprocal by statute. We draft to those rules and flag the clauses that will not survive them.
- Customer agreements, terms of service, and master service agreements
- Vendor, supplier, and distribution contracts
- Commercial leases and personal guaranties, including negotiation with the landlord
- Independent contractor agreements structured for Labor Code § 2775 and the AB 5 exemptions
- Confidentiality, non-solicitation, and the non-compete rules of Bus. & Prof. Code § 16600
- Settlement agreements, releases, and the Civ. Code § 1542 waiver
The Clauses
Where the risk sits in a California contract
These are the terms we read first in any contract you are handed, and the California rules that apply to each.
| Clause | What it does | California rule to know |
|---|---|---|
| Indemnity | Shifts one party’s losses, including third-party claims, to the other | Civ. Code § 2782 voids construction indemnity for the indemnitee’s sole negligence; general indemnities are enforced as written, so scope matters |
| Limitation of liability | Caps damages, often at fees paid, and excludes consequential damages | Enforceable between businesses; cannot exclude liability for fraud or willful injury (Civ. Code § 1668) |
| Attorney fees | Loser pays the winner’s fees | Made reciprocal by Civ. Code § 1717 even if drafted one-way; decide whether you want it at all |
| Liquidated damages | Fixed amount payable on breach | Void if it is a penalty; must be a reasonable estimate of harm (Civ. Code § 1671) |
| Automatic renewal | Term renews unless cancelled | Consumer contracts must meet the disclosure and cancellation rules of Bus. & Prof. Code § 17600 et seq.; business contracts are enforced as written |
| Non-compete / non-solicit | Restricts competition or hiring after the relationship ends | Non-competes void under § 16600 and unlawful to include since 2024 (§ 16600.1); customer non-solicits usually void; employee non-solicits and confidentiality generally enforceable |
| Personal guaranty | Makes the owner personally liable for the entity’s obligation | Enforced as written; look for continuing guaranties, waivers of defenses, and whether it survives assignment of the lease or loan |
| Choice of law and venue | Picks the state’s law and the court | Labor Code § 925 lets California employees void out-of-state choices; business contracts generally enforced |
| Arbitration | Replaces court with a private arbitrator | Enforceable, but California’s rules on fees, unconscionability, and employee arbitration are specific and change often |
Commercial leases: the biggest contract most small businesses sign
A five-year triple-net lease with a personal guaranty is often the largest liability a small business owner has, and the landlord’s form is drafted entirely for the landlord. The terms worth negotiating: the definition and cap of common area charges, who pays for HVAC replacement, the assignment and subletting clause (which decides whether you can sell the business), the relocation clause, the personal guaranty’s duration and cap, and the holdover rent. California requires a disclosure about whether the premises have been inspected by a Certified Access Specialist (Civ. Code § 1938), and it limits a landlord’s recovery after a tenant’s default to what could not reasonably have been mitigated (Civ. Code § 1951.2), which is leverage in a workout. We review the lease before you sign and negotiate the guaranty down to a fixed term or a capped amount wherever the landlord will move.
Independent contractor agreements that survive the ABC test
A contract that calls a worker an independent contractor does not make them one. Under Labor Code § 2775 a worker is an employee unless the business proves all three prongs of the ABC test, and the EDD, the Labor Commissioner, and plaintiffs’ lawyers all know it. The agreement still matters: it is the evidence for prong A (freedom from control) and prong C (an independently established business), and for the business-to-business exemption under § 2776, which has twelve requirements that a well-drafted agreement can satisfy and a form agreement will not. We draft contractor agreements to the exemption that applies to your industry, and we tell you honestly when no exemption applies and the worker should be an employee. That conversation is cheaper than the EDD assessment.
Reading a contract with the numbers attached
Most contract reviews describe the risk. Ours quantify it. An uncapped indemnity is a number: the largest plausible third-party claim. A guaranty is a number: the remaining rent through the term. An auto-renewal is a number: the cost of one more term you did not want. A limitation of liability at fees paid is a number, and usually a small one. Putting the numbers next to the clauses is what lets a business owner decide which terms to fight for and which to accept, and it is the review an attorney-CPA provides that a lawyer alone tends not to.
The Attorney-CPA Difference
The contract allocates risk. We tell you how much.
- Every risk-shifting clause identified and quantified before you sign
- Drafted to California’s rules on non-competes, contractors, fees, and renewals, so the terms hold up
- Leases and guaranties negotiated, not just reviewed
- Templates for your recurring contracts, so the review happens once
- Flat fees for drafting and review, quoted in writing
Questions & Answers
Contract questions California businesses ask
How much does a contract review cost?
A flat fee based on the length and type of the document, quoted before you send it. A commercial lease and a standard vendor agreement are different engagements; both are quoted in writing.
Can I use a contract template I found online?
As a starting point for understanding what a contract of that type covers, yes. As the document you sign, rarely: most online templates are drafted for another state’s law and include non-competes, one-way fee clauses, and contractor terms that California will not enforce or will penalize.
Is an emailed agreement binding in California?
Generally yes. A contract can be formed by email, and electronic signatures are valid under California’s Uniform Electronic Transactions Act (Civ. Code § 1633.1 et seq.). The question is what the emails actually agreed to, which is why a written agreement that settles the terms is worth having.
The other side breached. What can I recover?
Generally your expectation damages, meaning the benefit you would have received, subject to mitigation and to any limitation clause in the contract, plus attorney fees if the contract provides for them. Whether it is worth pursuing depends on the amount, the other side’s ability to pay, and the fee clause, and that analysis is the first thing we do.
Sign it knowing what it costs.
A free contract review with an attorney-CPA, and a flat fee in writing before we draft or negotiate.