at the time the obligation or order is received, such person is insolvent, and this fact is unknown to the creditor, or if, before the creditor can with reasonable diligence present the order to the person upon whom it is given, he becomes insolvent.
(Amended by Code Amendments 1873-74, Ch. 612.)
CHAPTER 6. Release [1541 — 1543]
(Chapter 6 enacted 1872.)
1541. An obligation is extinguished by a release therefrom given to the debtor by the creditor, upon a new consideration, or in writing, with or without new consideration.
(Enacted 1872.)
1542. A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.
(Amended by Stats. 2004, Ch. 183, Sec. 28. Effective January 1, 2005.)
1542.1. Notwithstanding Section 1542, a provider of health care, as defined in Section 56.05, or its officers, employees, agents, or subcontractors, shall release the state and its officers, employees, and agents, from any claim arising from the defense of the provider of health care by the Attorney General, or other legal counsel provided by the state pursuant to Section 12511.5 of the Government Code.
(Added by Stats. 1995, Ch. 749, Sec. 2. Effective October 10, 1995.)
1543. A release of one of two or more joint debtors does not extinguish the obligations of any of the others, unless they are mere guarantors; nor does it affect their right to contribution from him or her, except as provided in Section 877 of the Code of Civil Procedure.
(Amended by Stats. 1987, Ch. 677, Sec. 1.5.)
PART 2. CONTRACTS [1549 — 1701]
(Part 2 enacted 1872.)
TITLE 1. NATURE OF A CONTRACT [1549 — 1615]
(Title 1 enacted 1872.)
CHAPTER 1. Definition [1549 — 1550]
(Chapter 1 enacted 1872.)
1549. A contract is an agreement to do or not to do a certain thing.
(Enacted 1872.)
1550. It is essential to the existence of a contract that there should be:
1. Parties capable of contracting;
2. Their consent;
3. A lawful object; and,
4. A sufficient cause or consideration.
(Enacted 1872.)
CHAPTER 2. Parties [1556 — 1559]
(Chapter 2 enacted 1872.)
1556. All persons are capable of contracting, except minors, persons of unsound mind, and persons deprived of civil rights.
(Enacted 1872.)
1557. (a) The capacity of a minor to contract is governed by Division 11 (commencing with Section 6500) of the Family Code.
(b) The capacity of a person of unsound mind to contract is governed by Part 1 (commencing with Section 38) of Division 1.
(Repealed and added by Stats. 1992, Ch. 163, Sec. 9. Effective January 1, 1993. Operative January 1, 1994, by Sec. 161 of Ch. 163.)
1558. It is essential to the validity of a contract, not only that the parties should exist, but that it should be possible to identify them.
(Enacted 1872.)
1559. A contract, made expressly for the benefit of a third person, may be enforced by him at any time before the parties thereto rescind it.
(Enacted 1872.)
CHAPTER 3. Consent [1565 — 1590]
(Chapter 3 enacted 1872.)
1565. The consent of the parties to a contract must be:
1. Free;
2. Mutual; and,
3. Communicated by each to the other.
(Enacted 1872.)
1566. A consent which is not free is nevertheless not absolutely void, but may be rescinded by the parties, in the manner prescribed by the Chapter on Rescission.
(Enacted 1872.)
1567. An apparent consent is not real or free when obtained through:
1. Duress;
2. Menace;
3. Fraud;
4. Undue influence; or,
5. Mistake.
(Enacted 1872.)
1568. Consent is deemed to have been obtained through one of the causes mentioned in the last section only when it would not have been given had such cause not existed.
(Enacted 1872.)
1569. Duress consists in:
1. Unlawful confinement of the person of the party, or of the husband or wife of such party, or of an ancestor, descendant, or adopted child of such party, husband, or wife;
2. Unlawful detention of the property of any such person; or,
3. Confinement of such person, lawful in form, but fraudulently obtained, or fraudulently made unjustly harrassing or oppressive.
(Enacted 1872.)
1570. Menace consists in a threat:
1. Of such duress as is specified in Subdivisions 1 and 3 of the last section;
2. Of unlawful and violent injury to the person or property of any such person as is specified in the last section; or,
3. Of injury to the character of any such person.
(Enacted 1872.)
1571. Fraud is either actual or constructive.
(Enacted 1872.)
1572. Actual fraud, within the meaning of this Chapter, consists in any of the following acts, committed by a party to the contract, or with his connivance, with intent to deceive another party thereto, or to induce him to enter into the contract:
1. The suggestion, as a fact, of that which
