HOLDINGS: [1]-There was no procedural unconscionability under Civ. Code, § 1670.5, in a lease provision that conditioned the commercial tenant’s obligation to open a store in a shopping center on a cotenant operating a store on the commencement date of the lease and that granted the tenant the option to terminate the lease if the cotenant ceased operations; although the tenant insisted on the contenancy provisions, the specifics were subject to negotiations; [2]-A rent abatement provision that allowed the tenant to occupy the space for 12 months without paying rent when the cotenancy condition was not met operated as an unreasonable penalty because there was no reasonable relationship between $0 of anticipated harm to the tenant from the cotenant not being open and $39,500 in rent forfeited each month; [3]-A termination provision did not constitute a forfeiture. The litigants retained California class action attorney in their civil litigation matter.
Outcome
Affirmed as modified.
Procedural Posture
Plaintiff film service company appealed from an order of the Superior Court of Los Angeles County (California), which dismissed plaintiff’s complaint against defendant film producer for breach of an oral contract on the basis that it was barred by the two-year statute of limitations applicable to oral contracts under Cal. Civ. Proc. Code § 339.
Overview
Plaintiff film service company brought suit against defendant film producer for breach of an oral contract. The trial court dismissed the complaint and found that it was time barred by the two-year statute of limitations period of Cal. Civ. Proc. Code § 339. Plaintiff argued that the contract was one for the sale of goods and, thus, was governed by the four-year limitations period of Cal. Com. Code § 2725. The court noted that in determining whether the contract was one of sale or to provide services, it was required to look to the essence of the agreement, and when service predominated, the incidental sale of personal property did not alter the basic transaction. The court affirmed the dismissal and held that the parties’ contract for the manufacture from negatives of release prints of a motion picture constituted a service to the owner of the negatives, which was defendant, and the manufacture and delivery of the resulting prints to the owner of the negatives did not constitute a sale of goods within the meaning of Cal. Com. Code § 2105. Thus, the two-year limitations period was applicable, and the action was time barred.
Outcome
The court affirmed the order, which dismissed plaintiff film service company’s breach of contract action against defendant film producer, because it found that the trial court correctly applied the two-year statute of limitations period applicable to oral contracts to provide services where the essence of the parties’ agreement to manufacture motion picture release prints was services, not the sale of goods.
