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Louisiana Bar Exam July 2024 > 9. Code III: Sales and Leases > Flashcards

9. Code III: Sales and Leases Flashcards

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1
Q

Warranty against Redhibition: Remedies for Good Faith Seller

A
  • useless = entitled to refund of purchase price and reasonable expenses (NO damages/attorney’s fees)
  • if not USELESS = quanti minoris

however, buyer MUST give good faith seller opportunity to correct defect before seeking rescission of the sale

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2
Q

Good Faith Seller

A

= one who did not know thing had defect

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3
Q

Warranty against Redhibition

A

implied in every sale

protects buyer from:
(1) hidden defects in the thing:
(2) present at the time of delivery
(3) that qualify as redhibitory

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4
Q

Types of Redhibitory Defects

A

(1) defect that renders the thing either absolutely useless or so inconvenient to use that the buyer would not have bought the thing had he known of the defect
(Remedy = RESCISSION of the sale)

OR

(2) defect that diminishes the usefulness or value of the thing such that it must be supposed that the buyer would have paid a lesser price
(Remedy = quanti minoris)

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5
Q

Quanti minoris

A

reduction of the price

remedy for the type of redhibitory defect that diminishes the usefulness or value of the thing such that it must be supposed that the buyer would have paid a lesser price

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6
Q

Hidden Defect/ Duty to Inspect

A

one that would likely not be discovered upon reasonably prudent inspection

  • buyers knowledge/ expertise
  • opportunity to inspect
  • assurances made by sellers
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7
Q

Burden of Presence of Redhibitory Defect Upon Delivery

A

burden on buyer to prove existence at time of delivery

not the cause of defect

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8
Q

Waiver of Warranty against Redhibitory Defects

A

(1) must be clear and unambiguous (“as is” is likely not good enough)
(2) must be brought to buyer’s attention

IMPORTANT: waiver is ineffective against a seller who declared that a thing had a quality that seller knew it did not have

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9
Q

Liberative Prescription for Redhibitory Defects: Good Faith Sellers

A

the shorter of:
(i) 2 years from the date of perfection of the sale
(ii) 1 year from the date the buyer discovered the defect

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10
Q

Liberative Prescription for Redhibitory Defects: Bad Faith Sellers

A

bad faith = had knowledge of the defect

the shorter of:
(i) 10 years from the date of perfection of the sale
(ii) 1 year from the date the buyer discovered the defect

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11
Q

Warranty of Fitness

A

seller warrants that the thing sold is reasonably fit for its ordinary use

governed by the rules of contract

limited to ordinary uses – EXCEPTIONS

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12
Q

Warranty of Fitness extended to uses beyond ordinary when:

A
  1. buyer has some particular use in mind for the thing,
  2. seller knows or should know the buyer’s particular purpose,
    AND
  3. the seller knows or should know that the buyer is relying on the seller’s skill and judgement in selecting the thing
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13
Q

Warranty of Fitness: Remedies

A

damages for the amount of loss sustained by the breach

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14
Q

Prescription of Breach of Warranty of Fitness

A

the shorter of:
(i) 2 years from the date the thing was delivered, or
(ii) 1 year from the date the buyer discovered the unfitness

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15
Q

Contract to Sell

A

bilateral agreement where the parties promise to enter into a sale at a later date

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16
Q

Form for Contract to Sell

A
  • must specify the thing and the price
  • in writing for immovables
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17
Q

Sale: Definition

A

contract whereby a person
transfers ownership
of the thing
to another
for a price in money

sale of immovables must be in writing to affect 3d persons

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18
Q

Perfection of the Sale

A
  1. object
  2. price (determined or determinable)
  3. consent of the parties (consider counteroffer)
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19
Q

Contract to Sell: Earnest Money

A

money given by buyer to seller to secure the parties’ interests in the event of breach

  • must be EXPRESSLY stipulated
  • precludes possibility of seeking specific performance and damages (functions as stipulated damages)
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20
Q

Contract to Sell: Earnest Money Effects on Breach

A

if buyer recedes from contract: buyer forfeits earnest money

if seller recedes from contract, seller must pay the earnest money given to the buyer plus the same amount

if either party’s failure to perform is EXCUSED, earnest money is not owed

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21
Q

Sale of an Immovable: Prescription of Action for Failure to Perform

A

5 years

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22
Q

Warranty against Eviction

A

seller warrants the buyer against eviction

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23
Q

Eviction

A

the buyer’s loss of or danger of losing
the whole or part of a thing sold
because a third person’s right existed in the thing
at the time of sale

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24
Q

Warranty against Eviction: Servitudes

A

warranty against eviction extends to undeclared, nonapparent conventional servitudes

does NOT extend to natural or legal servitudes

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25
Q

Seller’s Liability for Breach of Warranty Against Eviction: Waiver/Modification by Warranty Sale

A

parties do not address the matter of the warranty OR they state that the sale is a “warranty sale”

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26
Q

Seller’s Liability for Breach of Warranty Against Eviction: Waiver/Modification by Warranty Sale

REMEDIES

A
  • restitution of the price
  • restitution of fruits if buyer has to pay them to the owner who evicts him
  • all costs incurred by the lawsuit concerning the warranty/eviction
  • damages ONLY IF the buyer did not know about danger of eviction
  • improvements (all improvements if bad faith seller, only “useful improvements” if good faith seller)
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27
Q

Seller’s Liability for Breach of Warranty against Eviction: Waiver/Modification by Non-Warranty Sale

A

seller renounces the warranty

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28
Q

Seller’s Liability for Breach of Warranty against Eviction: Waiver/Modification by Non-Warranty Sale

REMEDIES

A

restitution of the price ONLY IF buyer did not know about danger of eviction

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29
Q

Seller’s Liability for Breach of Warranty against Eviction: Waiver/Modification by Buyer’s Peril and Risk

A

non warranty sale +
(1) buyer was aware at the time of the sale the danger of eviction, or
(2) regardless of the buyer’s knowledge, the buyer declared that he was buying the property at his peril and risk, or
(3) the seller’s obligation of returning the price of the property has been expressly excluded

Remedies for buyer: nothing

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30
Q

Seller’s Liability for Breach of Warranty against Eviction: Quitclaim Deed

A

assignment of any rights without warranting the existence of those rights

REMEDIES: nothing

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31
Q

Warranty against Eviction: Partial Eviction

A

buyer is entitled to proportionate reduction in price

if buyer’s PRINCIPAL CAUSE was to get the part on which the eviction occurred, buyer could get complete rescission of sale

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32
Q

Right of First Refusal

A

unilateral contract in which one party agrees that she will not sell a certain thing without FIRST offering it to a certain person

  • may be enforced by specific performance
  • need not contain a term OR price
  • immovable must be in writing and cannot extend past 10 years (movable capped at 5)
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33
Q

Sale on View or Trial

A

buyer retains the right to test the goods

sale is not perfected until the goods have been checked

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34
Q

Sale on a Suspensive Condition (when perfection?)

A

title does not transfer (sale is not perfected) until the condition is fulfilled

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35
Q

Types of Warranties

A

(1) warranty against redhibition
(2) warranty against eviction
(3) warranty of fitness

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36
Q

Option Contract

A

unilateral K whereby a grantor of the option is BOUND TO BUY OR SELL if the grantee accepts within the time stipulated

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37
Q

Option Contract: Requirements

A
  1. thing
  2. price
  3. correct form (immovables = writing)
  4. term
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38
Q

Option Contract Term Requirements

A

can be tied to another contract with a definite term,

NO LONGER THAN 10 years for an immovable
UNLESS tied to a contract that gives rise to obligations of continuous and periodic performance (ie a lease)

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39
Q

Lesion Beyond Moiety

A

(1) K for corporeal immovable
(2) only SELLER can bring action for lesion
(3) price is less than 1/2 FMV at time of sale

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40
Q

Counteroffer

A
  • an acceptance not in accordance with the terms of the offer is deemed to be a counteroffer

different terms = proposals for modification (must be accepted by offeror to be part of K

MERCHANT EXCEPTION

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41
Q

Counteroffer Exception: acceptance forms K of sale of movable even if acceptance contains different terms from original offer IF

A
  • THERE IS AGREEMENT ON THE SALE AND THE PRICE

(no K if acceptance conditioned on acceptance of additional terms)

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42
Q

Merchant Exception for Counteroffers

A

different terms become part of the K automatically unless:

a. they materially alter the offer
b. offer expressly limits acceptance to terms of the offer
OR
c. offeror objects within reasonable time

(still a K just not included automatically)

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43
Q

sale of future things

A

Things not yet in existence

coming into existence = suspensive condition so buyer does NOT assume the risk

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44
Q

sale of hope

A

ALEATORY (uncertain)

buyer assumes risk that thing won’t materialize

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45
Q

Simulation

A

when parties do not intend a price to be paid (presumed if seller remains in possession)

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46
Q

Ownership

A

Passes to buyer upon perfection of the sale

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47
Q

Risk of Loss

A

risk of loss due to fortuitous events (not reasonably foreseen @ time of K) transfers to buyer upon delivery

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48
Q

Perfection of the Sale: Goods Sold by Weight/ Tail

A

perfection when weighing/counting completed

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49
Q

Perfection of the Sale: Lump Sale

A

perfection at consent (no counting)

50
Q

Perfection of the Sale: Individualization

A

things sold must be set aside for buyer when seller can’t easily change her mind

51
Q

Perfection of the Sale: Things in Transit

A

transfer of ownership determined by BILL OF LADING

  • person owns the things in transit deliverable to them
  • shipment k = risk of loss transferred to buyer upon delivery to CARRIER
  • destination K = risk of loss transferred to buyer when things duly tendered to buyer at place of destination
52
Q

Agreements Preparatory to the Sale

A
  1. Option
  2. Right of First Refusal
  3. Contract to Sell
53
Q

Implied Warranty of Merchantability

A

allows buyer to refuse to go through with sale if title of the property is suggestive of serious litigation

54
Q

Primary Obligations of the Seller

A
  1. Delivery
  2. Implied Warranty Against Eviction
  3. Implied Warranty Against Redhibitory Defects
55
Q

Seller’s Failure to Deliver

A

buyer may demand dissolution or specific performance + buyer is entitled to DAMAGES

56
Q

Obligations of the Seller: Conforming Goods

A
  • seller must deliver goods of agreed kind/quality/quantity
  • buyer always has right to inspect (must reject within reasonable time)
  • can’t accept then later reject
57
Q

Seller’s Right to Cure Nonconforming Goods

A

IF:
1. Time for performance has not expired OR
2. Seller reasonably believed buyer would find nonconforming goods acceptable

58
Q

Intentional Misrepresentation by Seller

A

innocent misrepresentation/ not of the kind specified = general rules of K

intentional = REDHIBITION

59
Q

Redhibitory Defects MUST:

A

(1) not be apparent (buyer must not know of defect at time of sale)
(2) not discoverable at time of sale by a reasonably prudent buyer of such things (imposes duty to inspect)
AND
(3) exist at the time of delivery (presumed if manifests within 3 days/ reasonable inference otherwise)

60
Q

Warranty against Redhibition: Remedies for Bad Faith Seller

A

= knew of defect and omits to declare it OR declares it to have a quality it does not have

manufacturer = always charged with knowledge

  • useless = entitled to refund of purchase price and reasonable expenses
  • if not USELESS = quanti minoris

PLUS DAMAGES AND ATTORNEYS FEES

BAD FAITH SELLER HAS NO RIGHT TO REPAIR

61
Q

Considerations for Claims of Breach of Warranty against Redhibition

A
  1. deduction for use (generally only for GF sellers/ BF= court’s discretion)
  2. notice to GF seller (so they can repair)
  3. return of the thing (if remedy = rescission , must take care as prudent administrator pending satisfaction of his claim)
  4. risk of loss (thing destroyed BECAUSE of redhibitory defect and buyer gave notice BEFORE fortuitous event)
  5. quanti minoris
  6. subrogation (buyer can bypass seller and sue manufacturer)
62
Q

Obligations of Buyer

A
  1. pay the price (can be compelled to pay if seller offers to deliver the thing)
  2. take delivery of the thing
63
Q

Breach: Buyer Doesn’t Pay

A

seller can either:
(1) dissolve sale
OR
(2) seek performance (suit for specific performance)

64
Q

Right of Resale

A

FOR MOVABLES: If buyer doesn’t pay, seller has right of selling thing to 3d party and buyer is held responsible for any LOSSES realized in the resale

65
Q

Dissolution for Nonpayment of Price

A

if buyer fails to pay, seller entitled to dissolution

if promissory note/ other instrument given to represent price has PRESCRIBED, right to dissolve prescribes as well!! 5 years

66
Q

Sale with Right of Redemption

A

= right to take thing back from buyer

  • must be included in act of sale
  • must reserved for a peremptive period (5 yrs movables/ 10 immovables)
  • immovables = recorded for effectiveness against 3P/ movables = effective against 3P with knowledge of ROR
67
Q

Exchange

A

K in which each party transfers to the other ownership of a thing for something other than money

68
Q

Eviction of a thing Received in Exchange

A

person evicted may get value of the thing or the return of the thing he gave

plus damages

69
Q

Daiton En Paiment

A

debtor gives a thing to creditor as payment for a debt that is due

70
Q

Contract to Build

A

(1) buyer has some control over the specification of the object
(2) negotiations BEFORE object is constructed
AND
(3) K contemplates that any one party will supply materials and furnish his skill and labor to build the desired object

breach = breach of warranty of workmanlike performance

71
Q

Contract to Furnish and Install

A

= K of Sale with suspensive condition

72
Q

Promise or K to Sell

A

no transfer until actual K of sale

73
Q

Effects of Lesion Beyond Moiety

A

buyer can EITHER:
(a) return the thing (and get price back)
OR
(b) keep the thing and give seller supplement equal to difference price paid and FMV

if buyer sold to 3d party - only against OG buyer and capped at his profits on resale

PEREMPTIVE 1 YR from date of sale

74
Q

Sale of Future Thing transfers when . . .

A

transfers when thing comes into being

75
Q

Lease

A

a bilateral contract in which one gives the use of the thing in exchange for the rent

76
Q

Lease: Term

A

If the parties do not fix a term for the lease, a term will be supplied by law.

77
Q

Fixed Term Lease

A

tied to a designated date or the occurrence of an uncertain event

MAY NOT EXCEED 99 YEARS

78
Q

Required Elements of a Lease

A

agreement on the thing
agreement on the rent
does NOT have to be in writing! - even for immovables

79
Q

Indefinite Lease: Non-Agriculture (immovable) or Residential (movable)

A

a non-agricultural lease of an immovable or a residential lease of a movable without a stated term shall have a month-to-month term (imposed by law)

80
Q

Lessee’s Right to Sublease

A

can if not expressly prohibited

= transfer of lessee’s right of occupancy & does NOT promise to pay lessor anything

81
Q

Payment of Taxes on a Leased Thing

A

Lessor is responsible

82
Q

Making of Repairs on a Leased Thing

A

unless otherwise agreed

Lessor’s responsibility:
all other repairs, including those necessary to keep the thing in a condition suitable for the purpose for which it is leased

Lessee’s responsibility:
damage that is lessee’s fault, and
deterioration caused by lessee’s use beyond the normal use of the thing

83
Q

Dissolution of a Lease for Breach

A

within the court’s discretion

factors court will consider:
(a) whether the breach was major
(b) whether breach was fault of lessee/lessor
(c) whether the breach was in good faith

84
Q

Enforcement of a Lease Against a Third Party

A

requires that the lease be recorded in the mortgage records of the parish in which the immovable property is situated
(actual knowledge is irrelevant)

85
Q

Tacit Reconduction

A

ONLY IN FIXED TERM LEASES

occurs when lessee continues in possession for a certain period of time after the conclusion of the fixed term without opposition from the lessor

ASK:
1. has the lease been reconducted?
2. if so, how long is new term?

86
Q

1. Has the Lease been Reconducted?
Period of Time Required for Tacit Reconduction

NON-AGRICULTURAL LEASE

A

1 week

87
Q

2. How long is New Term?
New Term of Tacitly Reconducted Lease

NON-AG LEASE WITH A TERM LESS THAN 1 DAY

A

term is equal to expired term

88
Q

Lessee Abandonment

A

allows lessor to retake the premises and rent to another lessee as a mandatary for the original lessee

but lessor can only recover from original lessee the difference between rent paid by new lessee and rent owed by old lessee

89
Q

Acceleration Clause

A

if put in lease, allows lessor to demand payment of all rent due for the duration of the lease when one payment is not made on time

does not apply after tacit reconduction because lease becomes month to month (usually)

90
Q

Termination of the Lease: Indefinite Term

lease term > 1 mo

A

NOTICE (by either party) MUST BE GIVEN TO TERMINATE
WRITTEN for leases of immovables or residential leases of movables

30 days before end of period

91
Q

Lessor’s Obligations

A

(1) deliver the thing to the lessee
(2) maintain the thing in a condition suitable for the purpose for which it was leased
(3) protect the lessee’s peaceful possession for the duration of the lease

92
Q

Lessor’s Duty to Maintain

A

lessor must make all repairs NECESSARY to maintain thing in a suitable condition for purpose in which it was leased

except for those which lessee is obligated to make

93
Q

Lessee’s Obligations

A

(1) repair damage to the thing caused by his fault or that of persons who use the thing with his consent
(2) repair damage or deterioration due to use excessive of normal wear and tear

94
Q

Motorcycle Steering Problem when Going Above Speed Limit: Whose Duty to Repair?

A

provided the steering problem was not caused by the misuse of the lessee, it is the lessor’s duty to make the necessary repairs, because the steering problem seems to prevent the use of the motorcycle for the purpose in which it was leased

95
Q

Lessee Withholding Rent

A

only acceptable if the lessee could consider the lease extrajudicially dissolved

96
Q

Types of Leases

A

categorized by dominant purpose
- residential
- agricultural
- mineral
- commercial
- consumer (personal use outside his trade or profession)

97
Q

Indefinite Term Lease

A

no fixed term/ depends on the will of the parties subsequently expressed

  • AG = year to year
  • non ag immov/ res movables = month to month
  • non res immovables = day to day
98
Q

Indefinite Term Lease

A

no fixed term/ depends on the will of the parties subsequently expressed

  • AG = year to year
  • non ag immov/ res movables = month to month
  • non res immovables = day to day
99
Q

Termination of Lease: Fixed Term

A

upon expiration of the term

100
Q

Destruction of the Leased Thing

A
  • completely destroyed = lease terminates (no one pays damages)
  • partially destroyed/ substantial impairment of use = if lessee is NOT at fault: lessee can get diminution of rent or dissolution of lease (if lessor at fault lessee can get DAMAGES)

if impairment caused by external circumstances lessee only gets dissolution (eg. zoning)

101
Q

Peaceful Possession

A

Lessor liable if lessee disturbed by:
(1) any person claiming a right in the leased thing OR
(2) persons with access to the thing with lessor’s consent or who occupies adjacent property belonging to lessor

nonwaivable

102
Q

Lessee’s Right to Repair and Deduct

A

first must make DEMAND that lessor repair

if he doesn’t, lessee can repair and demand immediate reimbursement (price lessee pays must be reasonable)

GENERALLY HE CANNOT WITHHOLD RENT

103
Q

Lessor’s Responsibility for Vices and Defects

A

lessor liable for all DEFECTS AND VICES that prevent the thing from being used for its intended purpose

  • includes natural decay/ deterioration
  • does not have to exist at the time of K/ lessor need not know
104
Q

Waiver for Vices and Defects

A

(1) clear and unambiguous AND
(2) brought to the attention of the lessee

105
Q

Lessee’s Duties

A
  1. use thing as a prudent administrator according to the purpose for which it was leased
  2. pay the rent
  3. return the thing at the end of the lease in same condition as delivered (minus normal wear/tear)
106
Q

Lessee Misuse of Property

A

Misuse = lessee uses in way not intended OR in a way that may cause damage

lessor may DISSOLVE lease + damages OR injunctive relief

107
Q

Lessee’s Failure to Pay Rent

A

Lessor may:
(1) sue to dissolve and regain possession
(2) specific performance
PLUS ACCRUED RENT

  • can’t collect future rent before it’s due unless ACCELERATION CLAUSE
  • can’t BOTH retake possession and collect future rent unless lessee has ABANDONED property and he RELETS it to another (OG amount owed reduced by new rent)
108
Q

Lessee’s Right to Assignment

A

can if not expressly prohibited

= transfer of K (both rights and duties) & includes obligations of paying right to lessor

109
Q

Lessee’s Right to Assignment

A

can if not expressly prohibited

= transfer of K (both rights and duties) & includes obligations of paying right to lessor

110
Q

Bourbon St. Case

A

an owner lessor with full knowledge of potentially harmful effects of lessee’s activities on property is answerable for the damages lessee causes

111
Q

Lessee’s Right to Improvements

A
  • right to remove = lessee may remove all improvements but is bound to restore them to its former condition
  • if he does NOT remove lessor may (1) keep and pay costs or enhanced value OR (2) demand lessee remove within reasonable time (if lessee doesn’t the lessor may remove at lessees expense or keep and notice by certified mail and not pay)
112
Q

Lessee’s Right to Assignment

A

can if not expressly prohibited

= transfer of K (both rights and duties) & includes obligations of paying right to lessor

113
Q

Security Deposit

A

if the lessor in a residential lease does not return the security deposit within 30 days after written demand, lessee has right to recover the amount of deposit wrongfully withheld and the greater of $300 or 2X the amount wrongfully withheld

(court has discretion to award costs + attorney fees)

114
Q

1. Has the Lease been Reconducted?
Period of Time Required for Tacit Reconduction

AGRICULTURAL LEASE

A

30 days

115
Q

Waiver for Vices and Defects NOT Effective For

A

(a) vices lessee didn’t know and lessor did/ should have
(b) violate rules prohibiting advance limiting liability
(c) in res/consumer leases, seriously affect or threaten HEATH or SAFETY

116
Q

Termination of the Lease: Indefinite Term

> 1 week

A

NOTICE (by either party) MUST BE GIVEN TO TERMINATE
WRITTEN for leases of immovables or residential leases of movables

any time before expiration

117
Q

Termination of the Lease: Indefinite Term

month to month

A

NOTICE (by either party) MUST BE GIVEN TO TERMINATE
WRITTEN for leases of immovables or residential leases of movables

10 days before end of period

118
Q

Termination of the Lease: Indefinite Term

1 week – 1 month

A

NOTICE (by either party) MUST BE GIVEN TO TERMINATE
WRITTEN for leases of immovables or residential leases of movables

5 days before end of period

119
Q

2. How long is New Term?
New Term of Tacitly Reconducted Lease

NON-AG LEASE WITH TERM BETWEEN 1 DAY AND 1 MONTH

A

day-to-day

120
Q

1. Has the Lease been Reconducted?
Period of Time Required for Tacit Reconduction

LEASES WITH A FIXED TERM OF 1 WEEK OR LESS

A

1 day

121
Q

2. How long is New Term?
New Term of Tacitly Reconducted Lease

NON-AG LEASE WITH A TERM OF 1 MONTH OR LONGER

A

month-to-month

122
Q

2. How long is New Term?
New Term of Tacitly Reconducted Lease

AGRICULTURAL LEASE

A

year to year

Louisiana Bar Exam July 2024 (19 decks)

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