ENCINO, CA – September 21, 2026 – PRESSADVANTAGE –

This report, distributed by the Law Offices of Steven J. Horn, examines several California civil litigation and contract laws that took effect January 1, 2026.

California Civil Code Section 1670.15 now places new limits on dispute-resolution clauses in consumer-use agreements. The law followed a widely reported case in which a company attempted to compel arbitration of unrelated personal injury claims by pointing to arbitration language buried in an unrelated app’s terms of service that the plaintiff had accepted months earlier. Although that particular motion was ultimately withdrawn, the case prompted California lawmakers to restrict how broadly a dispute-resolution clause in one agreement can be applied to unrelated later disputes. The statute applies only to consumer-use agreements entered into on or after January 1, 2026.

Separately, California’s Private Works Change Order Fair Payment Act, codified at Civil Code Sections 8850 through 8859, took effect January 1, 2026, for private construction contracts entered into on or after that date. The law establishes mandatory, non-waivable deadlines for how payment and change-order disputes on private construction projects must be handled, including a 30-day window for an owner to respond to a contractor’s claim and a 60-day deadline to pay undisputed amounts. Disputed amounts must generally proceed through documentation, a meet-and-confer process, and non-binding mediation before litigation can proceed.

A related law, codified at Civil Code Section 8811, caps retention withheld on qualifying private construction projects at 5 percent of the contract price, with certain exceptions for smaller residential projects. Both construction-related laws are scheduled to sunset on January 1, 2030, unless extended by the Legislature.

California’s small claims court jurisdiction has also changed in recent years. Under Code of Civil Procedure Section 116.221, an individual may bring a small claims case for up to $12,500, while claims brought by a business, partnership, or other entity remain capped at $6,250 under Section 116.220. The individual limit was raised from $10,000 in 2024 under Senate Bill 555. Disputes exceeding these limits, or involving certain contract or property issues better suited to a formal civil proceeding, generally must be pursued in California’s limited or unlimited civil court system instead.

These changes affect several categories of disputes commonly handled in civil litigation, including commercial contract disputes, construction-related claims, and disagreements over dispute-resolution and arbitration provisions in business and consumer agreements.

Contract disputes remain one of the most common categories of civil litigation in California, arising in contexts ranging from business-to-business agreements to real estate transactions and partnership arrangements. When a contract dispute cannot be resolved through negotiation, parties generally have the option to pursue mediation, arbitration, or formal litigation, depending on the terms of the underlying agreement.

Partnership and shareholder disputes present a related category, often involving allegations that one party breached a fiduciary duty owed to the business or to other owners, including disputes over profit distributions, management decisions, or the valuation of a departing partner’s interest.

Real estate litigation can similarly involve disputes over purchase agreements, lease terms, title issues, or boundary disagreements between property owners, and commercial lease disputes in particular often intersect with contract law principles.

The legislative information referenced in this release is based on the text of California Civil Code Sections 1670.15, 8811, and 8850 through 8859, and Code of Civil Procedure Sections 116.220 and 116.221. The provisions described are presented for general public awareness and are not a substitute for individualized legal advice.

The Law Offices of Steven J. Horn represents clients in commercial litigation, contract disputes, and other civil litigation matters throughout Los Angeles and Encino, California.

###

For more information about Law Offices of Steven J. Horn, contact the company here:

Law Offices of Steven J. Horn
Steven J. Horn
(818) 385-1050
stevenhornlaw@gmail.com
16000 Ventura Blvd, Suite 1000, Encino, CA 91436

About The Author
PressAdvantage