Before a California court can impose and enforce California laws on a person, the Court must have what is known as "personal jurisdiction" over that person. California courts clearly have jurisdiction over California residents, but whether California courts have jurisdiction over a non-resident is a question that must be answered at the outset of any case.
The question is typically answered by looking at the facts of the situation and analyzing whether the non-resident person has purposely directed himself to the state and/or had sufficient contacts within the state. This issue came up in a recent case where a California Plaintiff purchased a car from a Wisconsin Defendant over the popular auction website, eBay. Needless to say, the car was not as advertised, so the Plaintiff buyer sued the Defendant seller in federal court for violations of California's consumer protection laws.
The United States 9th Circuit Court of Appeals dismissed the case, ruling that a single eBay transaction, without anything more, is an insufficient "contact" to establish personal jurisdiction over a non-resident defendant. The Court relied on the fact that the Defendant seller did not specifically direct his eBay auction toward California or California purchasers, but that the auction was broadcast to the entire world. The Court further noted that the Defendant seller was not the owner of eBay and therefore was not specifically doing business in California, nor did he have any further or continuing obligation toward the California purchaser. Ultimately, the Court dismissed the case for "want of personal jurisdiction" (i.e., lack of personal jurisdiction) over the Defendant seller.
However, the Court was careful to point out that this case was limited to it's facts and if the non-resident eBay seller had a continuing eBay operation that regularly sold to California consumers, the Court could easily find sufficient contacts to establish personal jurisdiction over him.
What's the lesson for eBay users? Just be careful who you buy from on eBay. If it's not a regular seller with sufficient contacts in California, you may not be able to use the California courts to enforce or cancel your agreement.