(a) Any legal rate of interest stipulated by a contract remains chargeable after a breach thereof, as before, until the contract is superseded by a verdict or other new obligation.

(b) If a contract entered into after January 1, 1986, does not stipulate a legal rate of interest, the obligation shall bear interest at a rate of 10 percent per annum after a breach.

Terms Used In California Civil Code 3289

  • Contract: A legal written agreement that becomes binding when signed.
  • Deed: The legal instrument used to transfer title in real property from one person to another.
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
  • Verdict: The decision of a petit jury or a judge.

For the purposes of this subdivision, the term contract shall not include a note secured by a deed of trust on real property.

(Amended by Stats. 1986, Ch. 176, Sec. 1. Effective June 23, 1986.)

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