[The following article was excerpted from John T. Blanchard's law school textbook, California Remedies: Commentary, Materials and Problems (3d ed. ©1997)]

Disputes regarding business transactions (including, of course, business transactions for household or personal purposes, a conventional definition of "consumer" transactions) often evolve over a period of time. Usually (it is to be hoped), people who make deals and then disagree about them will first attempt to adjust their differences privately, among themselves. Only after they have attempted to do so and failed and, further, deemed the controversy to be sufficiently substantial that legal counsel is needed to assist in the resolution of the controversy. Though seemingly more honored in the breach than the observance, the retained counsel should themselves attempt to resolve the matter through negotiation rater than rushing to file a lawsuit. Only if the attorneys are also unable to resolve the matter and the negotiation process has broken down completely should the controversy

"The civil litigation process still remains thereafter a part of the negotiation process. However, once submitted to litigation, the negotiation process will, if it remains fruitless, ultimately be ended by a judicial decree."

be submitted to a court. The civil litigation process still remains thereafter a part of the negotiation process. However, once submitted to litigation, the negotiation process will, if it remains fruitless, ultimately be ended by a judicial decree.

While the development of equity jurisprudence over the past few hundred years is well known to have been a response to the rigidity of the older law court system, it is less well known that this process is ongoing to this day. One of the frustrations and inefficiencies of the legal system as it existed at the end of the 19th century was its inability to act promptly. That is, even assuming that the parties negotiated reasonably, both between themselves and later with the assistance of their attorneys, if no amicable resolution was reached the courts adjudicated the dispute without reference to the parties' business needs and expectations. This problem was particularly acute if the dispute had arisen before a material breach of obligation had yet occurred. If the parties had anticipated a problem before it actually reached the stage of alleged material breach, the courts offered little or no help. Instead of assisting the parties in reaching a just solution to their controversy, the courts generally refused even to hear the case until it had ripened into what the courts legalistically termed a "case or controversy" and, thus, dismissed prospective (but often very real) disputes as "sham", "moot" or "nonjusticiable". However, without reference to hidebound historic precedent, it was obviously unsatisfactory to tell would-be litigants that they would get no help from the court until one party's side had suffered the damage of an actual breach. The analogy to the fossilization of the law courts in England in the Middle Ages is clear.

To remedy this unsatisfactory situation in 1921 the California legislature enacted the Declaratory Relief Act, the forerunner of the existing Declaratory Relief statutes. Though previous statutes had provided for something much like Declaratory Relief in specific situations, the idea of the statute was to empower the court, in the event of an "actual controversy" to "declare" the parties' rights and obligations before the dispute had otherwise ripened into a full-blown action for, perhaps among other things, breach of contract. The rights and obligations of "any interested person" may, according to the statute be declared "under a deed, will or other written instrument, or under a contract", or "in respect to, in, over or upon property" and certain other specific, property-related matters. Since the provision "under a contract" is separate from "a deed, will or other written instrument" jurisdiction has been interpreted to include disputes as to oral contracts; the constitutionality of statutes and ordinances is also often tested with this remedy.

Declaratory Relief is "cumulative"; it is available, in the same lawsuit, with other forms of relief. That is, a party may seek other appropriate relief (for example, an Accounting) in the same lawsuit Declaratory Relief is sought (for example, when a Declaration that the parties are partners is sought). Though the notion that such relief is "cumulative" seems straightforward, it is subject to several significant qualifications.

First, in times of extremely congested courts clever counsel inserted a Declaratory Relief cause of action into the plaintiff's pleading along with other claims for relief; thus, would obtain a priority over virtually all other matters (matters that, by definition, had been pending longer) in the setting for trial. The statute was, therefore, amended to provide an automatic trial setting priority only if Declaratory Relief was the only claim stated by the plaintiff (trial setting priority was discretionary with the court, after hearing on a notice motion, if any other relief was sought).

Second, Declaratory Relief operates only prospectively; that is, it declares the parties' rights and obligations in the future. The remedy is not available at all where no future relations were contemplated by the parties but, instead, all that confronted them was a completed act of alleged wrongdoing. In short, a litigant may not seek a declaration that another party's conduct constituted, for example, a breach of contract and then sue again (having at least collaterally estopped the opponent) for damages arising from that same conduct (breach). Such procedural maneuvering would violate the rule against "splitting" one's cause of action and would, if allowed, burden the courts with two lawsuits. However, nothing prevents a litigant who has received a decree that certain conduct would constitute, for example, a breach of contract from suing for damages or other relief after the opposing party again engages in the same conduct.