CODE III Flashcards
Requirements for a Valid Contract:
1) Capacity
2) Consent (established by offer and acceptance)
3) Lawful Cause (the reason why one bounds himself)
4) Lawful Object
Detrimental reliance: obligor bound by promise, if:
1) promisee relied on promise to his detriment;
2) promisor had actual/constr knowledge that promisee relied, and
3) promisee was reas in relying (if gratuitous + w/o requisite formalities ≠ reas)
o Discretionary: but ltd to expenses incurred or dmgs suffered but ≠ K remedies
All persons have capacity, except:
1) Unemancipated minors
2) Interdicts
3) Persons Deprived of Reason
K = relatively null (rescinded only by pty w/o capacity)
OBJECT Can be anything
lawful, possible, and determined/determinable
Minors = Contractual Capacity when:
1) Other pty reas relied on rep of maj
2) Ks made for minor’s biz or necessary for his Suppt/education
VICES OF CONSENT
#1- Error (unilateral/bilateral) #2- Fraud: (Misrep/suppression) #3- Duress
DURESS Def:
conduct of such a nature as to cause a reas fear of unjust & considerable injury to a pty’s person, prop, or rep.
pty whose consent vitiated by duress can recover:
1) damages & 2) AFs
Where only 1 pty in error, consent vitiated only if:
1) It concerns a cause w/o which obligation ≠ have been incurred (i.e. concerns principle cause); and
2) Cause was known/should have been known to other pty not in error (knowledge of cause NOT error)
FRAUD Def:
misrep or suppression of truth (induced error) made w/ intent to obtain unjust advtg or cause a loss/inconvenience to other pty.
- Fraud ≠ vitiate consent if
other pty could have ascertained truth w/o difficulty or special skills
o Exception: fiduciary relationship reas induced pty to rely on other
- Fraud committed by 3rd pty vitiates consent if
pty ≠ in error knew/should have known of fraud.
Absolute Nullity: if
K violates a rule of pub order (i.e. obj is illegal or immoral)
3 Consequences of absolute nullity:
1) No confirmation/ratification
2) Any pty/ct can invoke
3) Actn to annul is imprescriptible
Relative Nullity: if
violates a rule intended for protection of private pty (capacity/consent)
Consequences of relative nullity:
1) Can be confirmed (minor can confirm upon majority)
2) Invoked only by pty rule intended to protect
Rx for relative nullity :
actn to rescind K Rx 5 yrs from when either (a) grds for nullity ceased (duress/incapacity); or (b) nullity discovered (fraud/error)
Effects of Nullity:
1) K deemed never to have existed;
2) doesn’t impair rights of 3rd ptys in GF who acquired through onerous K.
3) If IM, recordation principles apply.
SIMULATION Def:
Absolute Simulation:
ptys intend K has no effects
Relative Simulation:
ptys intend K produce diff effects
Measure of Damages for Breach of K =
loss sustained by obligee and profit of which he was deprived
GF breach of K damages:
only reasonably foreseeable damages
BF Breach of K damages:
all dmgs that are a direct consequence of failure
- BF = malicious, intentional failure to perform
Breach = “Failure to Perform”
3 ways:
1) Nonperformance (never rendered)
2) Defective performance (rendered by in manner inconsistent w/ K)
3) Delay in Performance (rendered in an untimely fashion)
Obligee’s Actions: can’t recover dmgs if
1) His BF caused non-performance; or
2) He concealed facts he knew/should have known would cause failure to perform when K made
- Duty to mitigate: obligee has duty to make all reasonable efforts to mitigate damages caused by breach only if:
Relatively small in comparison to potential loss; and
Virtual certainty that it will avoid at least part of loss.
Elements of Sale:
1) Agreement
2) Object: all things corporeal or incorporeal susceptible of ownership; sale of another’s thing is null; succession rights ≠ sold b4 death
3) Price: must be in $ and be sum determinable by method parties have agreed
(Shipment K—Default)
Buyer owns things in transit that are deliverable to buyer
(destination K)
Seller owns things in transit that are deliverable to seller
CONTRACT TO SELL
Def:
Form
a bilateral K whereby ptys promise to enter into a sale at a later date;
must meet requirements of a sale
-agreement on object and price
RIGHT OF FIRST REFUSAL (ROFR)
Def:
a unilateral K whereby one pty agrees he ≠ sell a thing w/o first offering to certain person (Note: in distinguishing, rules more relaxed w/ ROFR than option K)
- Can be enforced by specific performance
Time Limit to exercise right of first refusal:
o Mvbl = 10 days;
o IM = 30 days
OPTION CONTRACT
Def:
a unilateral K whereby grantor is bound to buy/sell if grantee of option accepts w/in stipulated time.
to be valid, option must specify
1) Thing
2) Price
3) Must have a term (10 yr limit)(if pt of another K, like a lease, term is coextensive w/ that term)
- Only a fixed term K can supply a term for an option (won’t work if indefinite term K such as a month-to-month lease)
If IM, must be in writing & recorded to effect 3rd ptys
TIME LIMITS FOR OPTION K & RIGHT OF FIRST REFUSALS FOR IM:
term ≠ longer than 10 yrs (only if pd stipulated, if longer will be reduced)
If in connection w/ K giving rise to continuous/periodic performance, duration of right may be pd of time req’d for performance of these obligations
OPTION K & RIGHT OF FIRST REFUSALS FOR Mvbl:
only binding on 3rd pty acquiring conflicting rights w/ actual knwlg
Seller’s Obligations
- Deliver the thing
- Warranting the thing a/g eviction and redhibitory defects
- Warranting thing reasonably fit for ordinary use
Buyer’s Obligations:
- Pay price
- Take delivery
WARRANTY A/G EVICTION
Eviction:
buyer’s loss of, or reas fear of loss of, all or part of thing sold bc 3rd persons right existed at time of sale
Eviction Occurs if:
1) 3rd pty has perfect title even if buyer ≠ lost physical control; or
2) Non-apparent servitudes not declared (buyer must make reas inspection bc ≠ apply to apparent)—pub records irrelevant!
Partial Eviction: gen rule is
buyer gets % reduction of price, unless relates to buyer’s principle cause→ buyer’s option to cancel sale.
WARRANTY A/G EVICTION
Warranty Sale: when ptys ≠ address matter of warranty (so it is implied)→ seller owes
(1) restitution of price; (2) fruits; (3) costs; (4) dmgs if buyer in GF (had no knowledge).
WARRANTY A/G EVICTION
Sale w/o Warranty: seller renounces warranty→ seller owes
restitution of price ONLY if buyer in GF (no knowledge)
Warranty against Redhibition Def1:
defect that renders thing useless/its use is so inconvenient buyer wouldn’t have bought→ buyer entitled to recession of sale
Warranty against Redhibition Def2:
Defect that diminishes usefulness such that buyer would have paid less for it→ buyer entitled to reduction of price (quanti minoris)
Defect Must be:
1) Not apparent (≠ reas discoverable by prudent buyer)
2) Not known to buyer at time of sale
3) Existed at time of delivery (presumption if appears w/in 3 days thereafter) (buyer has BOP)
4) Meets either definition 1 or 2
Redhibition BF Seller:
must (1) return purchase price, (2) expenses, (3) AFs; and (4) dmgs;
o Seller ≠ have opportunity to repair (buyer could give, but law does not)
o Rx: 1 year from discovery of defect
o Mfr of defective product always in BF
Redhibition GF Seller:
(1) Purchase price w/ interest; (2) reas expenses from sale & preservation (deduct value of use/prof yielded)
o Seller = opportunity to repair
o Rx: shorter of 1 yr from discovery/4 yrs from delivery
o Res/Com IM Prop: (GF seller) 1 yr from delivery
parties CAN waive warranty, but only valid if it is:
1) Clear and unambiguous; and
2) Brought to seller’s attn.
Waiver ≠ valid if seller declares thing has quality he knew it didn’t have.
WARRANTY OF FITNESS FOR ORD. USE
General Rule:
seller warrants thing fit for ordinary use (remedies governed by K law)
- In addition to buyer’s remedies under redhibition
WARRANTY OF FITNESS FOR ORD. USE
Warranty extends to buyers particular use only if:
1) Buyer has some particular use in mind;
2) Seller knows/should know buyer’s particular purpose; and
3) Seller knows/should know buyer relying on his skill, knowledge, & j’mt in selecting the thing.
Waiver of warranty a/d redhibition also waives this warranty
RIGHT OF REDEMPTION
Def:
seller’s reservation of right to take back thing from buyer
Time Limit for right of redemption: if longer pd specified, ct will reduce
- IM→ no more than 10yrs
- Mvbl→ no more than 5 yrs
Period fixed for redemption is peremptive
EXCHANGE
Def:ecific rules provided
a K where each pty transfers ownership of a thing other than money to the other.
- Sales law governs except where sp
Elements of Valid Lease:
1) Thing (must be capable of being used w/o being destroyed) (conveys possession only)
2) Rent (certain or determinable; need ≠ be in money)
3) Consent:
No term for ag lease means
year-to-year
No term for non-residential mvbls means
day-to-day
All others, no term means
year-to-year?
if term > 1 month
30 days before end of pd
if term is month-to-month
10 days before end of month
if term b/t 1 week & 1 month
5 days before end of pd
if < 1 week.
Any time before expiration of term
LESSOR’S OBLIGATIONS
- Deliver thing
- Maintain in condition suitable for purpose
o Make necessary repairs (≠ if caused by lessee’s fault) - Maintain peaceful possession - extends not only to disturbances on the leased premises themselves, but also to disturbances caused by people who occupy adjacent property of the lessor.
o Liable for disturbance by ppl claiming right to leased thing & lessee’s of lessor’s neighboring prop
o Not Liable for loss ≠ lessor’s fault
LESSEE’S OBLIGATIONS
- Pay Rent - cant refuse to pay rent if a lessor breaches a duty
- Use as prudent administrator
- Return thing at end of lease in same condition delivered in (except for normal wear and tear)
if lessee fails to pay rent when due, lessor may
dissolve the lease and regain possession of the thing.
If lessee abandons premises, lessor has right to
retake possession of the premises & relet them as mandatary for lessee
upon abandonment, lessor has a duty to mitigate his damages. upon abandonment, Lessor will be able to recover the difference between the rent owed by the original lessee and the rent obtained from the sub-lessee.
Lease w/ a fixed term is reconducted if lease continues in possession & no steps are taken to terminate the lease for:
- 30 days for Ag lease
- 1 week for lease w/ fixed term > 1 week
- 1 day for leases w/ fixed terms ≤ 1 week
Reconducted leases continue under same conditions as prior lease, but the terms become:
- for Ag Lease
- for leases w/ fixed terms > 1 month
- for leases with fixed terms > 1 week
- for leases w/ fixed terms b/t 1 day & 1 month
- Year-to-Year
- Month-to-Month
- Week-to-week
- Day-to-day
if lessee doesn’t remove improvements, lessor may either
1) Appropriate ownership paying lessee the lesser of their costs or enhanced value of leased thing; or
2) Demand that lessee remove them w/in reas time
o if lessee fails to remove, lessor can remove at lessee’s expense or appropriate ownership w/ notice via certified mail to lessee w/o any payment.
Types of Mortgages:
- Legal Mortgage:
- Judicial Mortgage
- Conventional Mortgage
- In Rem Mortgage
Judicial Mortgage:
j’mt creditor on a money j’mt files a certified copy of the j’mt in the mortgage records of any parish where the debtor’s IM property is located
General Mtg:
Mortgages that encumber all the motgagor’s IM prop & prop rights subject to the mortgage (present & future) w/in parish where mtg filed.
• Judicial & Legal Mtgs = General
Conventional Mortgage:
a special mtg (extending only to specific identified prop) and is crated by K w/ debtor
In Rem Mortgage:
Mortgage securing obl not owed by the prop owner (obligor is someone lese or mortgagee has agreed not to pursue personal debt)
Form Requirements: to create a conventional mortgage
1) In writing (No authentic act needed, but ≠ use executory process if not)
2) Signed by mortgagor (no need for mortgagee to sign; no paraph needed)
3) State Amt/Max Amt of secured obligation (stated amt + int; max amt that can be outstanding under fluctuating line of credit)
4) Precise Description of IM Property (ref to subdivision or plat maps on public file = OK; NO street address; no gen transfer all future prop, but specific description = OK; can refer to lease by ref # in conveyance recs)
