Code III Flashcards
prescriptive period for torts
1 year
mortgage definition
an accessory right that secures the performance of ANY obligation, and allows mortgagee to seize and sell mortgager’s immovable property under a judicial process, and use funds to repay the loss of the loan to the mortgagor.
it’s a real right - follows the property
hierarchy of 3 types of privilege
repairman’s privilege > lessor’s privilege > vendor’s privilege
but vendor’s privilege > repairman’s privilege
types of nonperformance
complete nonperformance
defective performance
delayed performance
limitations of damages in contract
are allowable. damages laws are suppletive.
however, may not exclude or limit liability for intentional or gross fault. cant exclude or limit liability for physical injury.
can provide for stipulated damages, but must require a breach to trigger (not through dissolution because of impossibility, for example) and must be in line with rules of public order (ie, not hidden punitive damages)
waiving the warranty against eviction
if warranty renounced, and buyer evicted, then buyer gets back price but no damages.
if warranty renounced AND buyer knew of risk of eviction OR declared he was buying at own peril and risk OR seller’s obligation to return price in eviction expressly excluded. –> no recovery. idea is it’s a sale of a hope
if sale was by quitclaim, then no recovery
NOTE: if eviction was because of seller’s own act, then waiver ineffective
assumption of obligation
an assumption transfers the duty from obligor 1 to a third person
An assumption between obligor and third person doesn’t need to be in writing for obligor 1 to enforce the assumption, but it does in order for the obligee to enforce the assumption
the original obligor and the new obligor are now SOLIDARILY BOUND
recordation rules for mortgage effectiveness against third persons
must be recorded in the mortgage records in parish in which property located (“inscribed”)
conventional and judicial mortgages are effective at date of recordation—> “first in time, first in right.”
after a mortgage is initially inscribed, it’s effective from 10 years from date of signature.
if mortgage term is for 9+ years, then valid for 6 years after termination of original term without reinscription
If mortgage needs to be re-inscribed, mortgagee needs to file notice of reinscription. must include:
declaration that mortgage is reinscribed
name of mortgagor
recordation number of mortgage when originally filed
then file in records of parish where mortgage originally filed
Remission of obligation:
A voluntary relinquishment by an obligee of her right to demand performance
Can be done gratuitously, or as a compromise.
Remission is presumed when the obligee hands over the promissory note to the obligor.
conforming goods
buyer has right of inspection upon delivery. goods must conform to contract in kind, quantity, and quality.
if buyer is silent within reasonable amount of time, presume acceptance
if buyer rejects, seller has right to cure nonconformity if:
if time for performance has not yet expired, OR
if the seller reasonably believed that the buyer would have accepted the nonconforming goods
gratuitous contract where a lender delivers a consumable thing to a borrower
loan for consumption
borrower must replace the things with similar quality and quantity of things at end of the loan
renunciation of a term
if there is a term or condition that is intended to benefit one person, the benefitting party can renounce the term or condition
remedy for nonperformance of contract
specific performance - shall be granted when contract is to deliver a thing, not to do an act, or execute an instrument.
unless impracticable = impossible; cost of SP greatly disproportionate to the cost of the actual damage; no longer in creditor’s interest; or substantial negative effect on rights of third party.
damages granted also.
3 types of privilege
repairmans privilege
to people who make and repair goods
to secure the payment of fee for parts and labor
the privilege exists as long as repairman has possession of goods + 120 days from last day work was done.
lessors privilege
gives privilege over any of lessee’s property on the leased premises, to cover due rent and damage to property
the privilege exists over property of lessee while on lessor’s property + 15 days after its removal
vendors privilege
attaches to any object sold on credit — movable or immovable
for movable property, vendor’s privilege exists for as long as buyer has possession of the sold good — if vendee sells good, then privilege lost (although note: privilege only exists if act of sale recorded within 7 days of the credit sale’s enactment)
for immovable property, privilege exists as long as act of sale is effective against third persons (ie, recorded in both conveyance and mortgage records)
if leased thing is destroyed
lease automatically terminates upon complete destruction.
if thing was partially destroyed, or substantial impairment of use, then lessee entitled to reduction of rent or dissolution of lease. if due to external circumstances (zoning change), then dissolution only
all contracts regarding transfers of immovables
including options, right of first refusal
must be recorded in the conveyance records to be effective against third parties
duress definition
consent is vitiated by duress when duress was of such a nature asa to cause a reasonable fear of unjust and considerable injury to the party’s person, property, or reputation. the harm must be severe
conduct must cause a reasonable fear of unjust and considerable injury to your person, property, or reputation — or those of someone you love
reasonableness is tailored to people like the victim. the age, health, disposition, and other personal circumstances must be taken into account.
contract to build
not a sale if:
if buyer has some control over specifications of the object —> contract to build
if negotiations for contract take place before construction
if contact contemplates that one party will provide materials but also skills and labor
then rules of redhibition and lesion dont apply
builder must build in good and workmanlike manner
definition of sale
a contract whereby a person transfers ownership of a thing to another for a price in money
requires: consent, thing, and price.
price must be determined or determinable
error definition and analysis
with bilateral error, where both paarties make same mistake, parties can re-make contract or rescind. easy
with unilateral error, contract will be rescinded only when (1) error concerned a cause without which the obligation would not have ben incurred AND (2) that cause was known or should have been known to the other party
examples of cause: contractual object or a substantial quality of that object; the person or qualities of the other party; or when party has drawn erroneous conclusions of law
remember: error as to a thing’s value is not a valid ground for rescission.
object
parties are free to contract for any object, as long as it is: lawful, possible, and determined or determinable
lawful is something not violating public policy of louisiana
possible is almost not a limitation - possible for any person anywhere to do then ok
so: thing must be determined as to its kind BUT may be determinable (not yet fixed) as to its amount
commutative contract definition
contracts in which the parties’ performances are correlative
similar to bilateral contract but a nuance.
compromise
is a contract where one or more parties make concessions to settle a dispute or uncertainty regarding an obligation or other legal requirement
must be in writing or recited in open court and transcribed
depositing a check that says on it “paid in full” even though less than claimed amount is a compromise.
to renounce prescription,
obligor must clearly express his willingness to give up the legal right to prescription
to renounce prescription on a prescribed debt, must be in writing
Lessor’s obligations:
has to deliver the thing
to the lessee
on time
and in good condition
has to maintain the thing so it can serve purpose for which it was leased (includes repairs and warranty against defects)
must protect the lessee’s peaceful possession of the thing
note on maintenance: lessor has to make all repairs unless duty specifically reserved to lessee
if lessor refuses to make repairs; lessee can sue for specific performance or dissolution of the lease. OR can make repair himself and deduct cost from rent. then, lessee has to make demand in writing and have it be refused.
note on warranty: lessor warrants that there arent any defects or vices on the thing that impairs its use (intended purpose); unlike redhibition, applies to defects that arise after/during the ongoing passage of time of the lease
promissory notes
5 years
begins running from date payment was exigible:
for demand notes, from date of issuance; for term notes, from date of due payment
nonconforming acceptance
acceptance is not an acceptance, but rather a counteroffer, if additional terms are therein
unless merchants - then the additional terms automatically incorporated
consent rules
no form requirements for general contract. offer and acceptance can be written, verbal, or manifested through action or inaction as long as that action clearly manifests an intention to be bound
obligation is alternative if
obligor is bound to render one of multiple items of performance
liability of seller in redhibition and prescription
depends on whether seller was in good or bad faith.
good faith seller = must repair the thing; if fails to repair may be liable for return of price/quanti menoris;
presriptive period is one year from discovery of defect but must be within 4 years of delivery of thing sold OR 1 year from delivery if residential or commercial immovable.
bad faith seller = no opportunity to repair; immediately to rescission or quanti menoris PLUS damages and attny fees. prescription is one year from discovery, no 4 yr cap.
definition of bad faith = knew of defect; intentionally misrepresented the thing (affirmative lies); or is manufacturer of the thing
buyer can sue all sellers back to source of defect / bad faith (or manufacturer) in order to get attorney’s fees
divisible and indivisible obligations:
divisible obligation is one where performance can be divided
divisibility can be accomplished by agreement or by nature
or indivisibility can be accomplished by agreement (even if it would otherwise be divisible)
prescription accrues on ___
the day of the last year that corresponds to the commencement of prescription
ie, action arises january 1, 2019 - prescription accrues on january 1, 2020
seller’s obligation to deliver
must deliver thing in good condition
must deliver thing in time, or be subject to suit for specific performance or damages
option
a unilateral contract to sell or buy, wherein the grantor of the option is bound to sell or buy if grantee accepts within stipulated time
contract must identify the thing, state a price, have/impute a term, and if for an immovable, be in writing
option cannot be granted for more than 10 years unless tied to lease (ie, contract of periodic and continuous performance), in which case that term is imputed
if property agreed to buy is different from property delivered
then if sale was by measure, buyer pays for reduction/increase in delivered amount, unless more than 5% either way, in which case rescission available.
if sale was in lump, then no increase or decrease in price unless over/under by 5%+
if sale was for a thing, no changes in price
liberative prescription of one year from date of sale
allocation of debt among solidarily liable obligors
Contribution
Obligee can go after any obligor for full repayment, then each obligor is liable for his VIRILE SHARE to one another
In contract, virile shares are equal unless contracted otherwise
In tort, shares are usually dependent on fault
obligors whose solidarity was renounced are still liable to other still-solidary obligors to cover insolvent obligor’s share.
obligors who were remitted from solidary obligation are excluded from covering insolvent obligor’s share
security right definition
it’s a legal right against another person
or against a piece of property
intended to help a creditor collect a debt
gives creditor greater security that they will be repaid
acceptance rules
for revocable offer, acceptance valid at time of transmission of acceptance, as long as offeree accepts via regular and reasonable method of transmission or according to the offer’s provisions for transmission
acceptance of an irrevocable offer is effective only upon receipt of the acceptance by the offeror
note: receipt includes “when deposited in a place the addressee has indicated” – so if email was given, receipt counts as when arrived in email inbox.
lesion
lesion applies only to sales of corporeal immovables
seller only may raise lesion
if sale was for less than 1/2 the value of the immovable at the time of the sale
remedy = buyer can return thing or pay difference between price paid and market value
Action to reduce excessive donation
5 year prescriptive period
form requirements of conventional mortgage
in writing
signed by mortgagor (doesn’t need mortgagee’s signature/dont need notary)
states specific numerical amount or maximum numerical amount of debt that mortgage is securing
must describe property over which mortgage is granted:
if you use a legal description: meets and bounds, US geological survey, recorded subdivision plat —> youre definitely fine
if you use a municipal address,
the “omnibus description” is not sufficient: “all the property I own south of I-10” —> renders mortgage ineffective entirely
types of leases
residential = when thing to be used as a dwelling
agricultural = when thing to be used
mineral = when thing to be used for production of minerals
commercial = thing used for commercial purposes
consumer =when it’s a movable intended for lessee’s personal or familial use
types of contract
unilateral contract = where one paarty owes a duty, and that duty exists only on one side. usually, donations
bilateral contract = where each party binds himself reciprocally
includes sales and leases.
note that in these cases, each party both obligor and obligee, and performances are reciprocal
peremption definition
a period of time fixed by law for the existence of a right
private works act rules
if claim and privilege arise and are preserved, then workmen can sue owner
to arise:
for person workmen, just have to show that you did work and werent paid.
for juridical person subcontractors, have to send certified mail to owner 10 days before filing claim or 75 days after last month of delivered materials. for lessors of equipment, send notice of lease to owner within 10 days of delivery of leased equipment
for general contractors, have to file notice of contract in mortgage records before work begins in order for privilege to arise
to preserve:
file document called statement of privilege
that is signed by claimant
reasonably identify the immovable property (address alone insufficient)
identify the work that was done, that it unpaid, and who failed to pay it
must file it in mortgage records of parish where immovable is located within 60 days of notice of termination of work (of whole project) or substantial completion/owner taking possession
conversion of expired lease when tenant stays in place is called
reconduction = automatic continuation of terms of expired lease because of parties’ inaction
in agricultural leases, tenant must remain in possession for 30 days beyond term
for non-agricultural immovable leases, must remain in possession for 1 week beyond term.
for all others, one day beyond term.
new term when reconduction occurs?
for agricultural, transfers into year to year lease
for all other leases, if original term was a month or longer, then convert to month to month
for leases where term was between a day and a month, then day to day
for leases where term was less than a day, then lease is reconducted for term of original length
Lessee’s right to sublease, assign, or encumber:
lessee can assign his lease to another party OR sublease his property unless expressly prohibited
an assignment is
a transfer of the lessor’s rights AND duties: has right to take possession and duty to pay rent
sublease is the lessee leasing to a third person, the right to use
the third person is bound only to the lessee
right to approve subleases or assignment
may be given to the lessor
but may not be used in an abuse of right doctrine way
however, legitimate business reasons to refuse sublease approval do not violate abuse of right doctrine
solidary obligation
Exist when obligors each owes the whole performance.
When obligors are bound solidarily or in solido, this is express. Also, when the single obligation is signed by multiple obligors, then this is a solidary obligation.
Bank can go after any 1 of the solidarily bound obligors and recover the full amount.
right of first refusal
unilateral contract wherein one party agrees he will not sell property without first offering it to the grantee
contract must identify the thing, be in writing if for an immovable. doesnt need aa term or price.
right of first refusal cannot be granted for more than 10 years unless tied to a lease / contract of periodic and continuous performance.
to use: holder has 30 days for immovable to exercise. if not, then seller has 6 months to sell. then back to holder for another chance to exercise
Conjunctive obligations
exist when obligor is required to render multiple items of performance, each one of which may be separately rendered
eg, monthly rent
note that each overdue payment prescribes seperately
dissolution of contract
dissolution is the cancellation of the contract. not same thing as rescission.
may be judicial or extrajudicial.
judicial dissolution is within court’s discretion. consider 4 factors:
extent and gravity of failure to perform
nature of the obligor’s fault (good or bad faith)
good or bad faith of the parties involved
surrounding economic circumstances that make dissolution inopportune
note also that dissolution is not available if obligor has rendered significant performance and the unperformed part does not significantly impair the interest of the obligee
dissolution –> damages
Strictly personal obligation
non-default rule. obligations are heritable unless strictly personal
when a contract is only enforceable between original obligor and original obligee
may exist:
If the performance owed by obligor requires special skill or qualification of the obligor
OR
If the obligation is to perform personal services
a mortgage between person A and person B is / is not also enforcesable for surety rights between person A and person B
IS enforceable for surety rights
flow of analysis for offer
figure out if offer was revocable or irrevocable
if revocable, was it revoked
if irrevocable or not revoked, did it expire
if offer was still live after these three questions, was it properly accepted
Lessee’s rights and obligations:
to use the thing as prudent administrator
to pay the rent
to return the thing at end of the lease int he same condition it was delivered, minus wear and tear
effects of natural obligation
A natural obligation is not enforceable by judicial action
Once obligor performs natural obligation, obligor cannot reclaim his performance if freely rendered.
New contract or promise coming from the natural obligation may be enforceable – say, if I promise to pay you a debt discharged in bankruptcy, that new obligation may be onerous.
note: not possible to exist for juridical persons
availability of nonpecuniary damages
only available when both:
contract w as intended to gratify a significant nonpecuniary interest AND
obligor knew or should have known that failure to perform would cause nonpecuniary loss
or, if obligor intentionally inflicted emotional distress – way above malicious breach standaard
3 possible contracts contemplating future sale
option
right of first refusal
contract to sell
Confusion:
Results from party becoming both obligor and obligee
Confusion requires the same person in the quality of obligor and obligee.
warranty against eviction
buyer’s loss of or danger of losing the whole or part of a thing by:
physical dispossession by a person with a legal right OR
when a third person has perfect title
under default rules, if evicted, buyer gets back original price, value of fruits returned, cost of lawsuit and damages, tho no attny fees
if co-surety released by creditor
then remaining co-suretys are solidarily liable as to the remaining amount, minus the released surety’s presumed equal virile share
personal actions prescriptive period
10 years
personal obligation definition
an obligation where an obligor owes a performance to an obligee
Duration of the lease:
a lease doesnt need to have a precise or fixed term to be valid
however, it must be limited in duration: we dont allow perpetual leases: statutory maximum is 99 years
a term may be fixed (for one year) or indeterminate (until i leave my current job)
in absence of a fixed term, law will supply an indeterminate term:
agricultural leases are year to year
any non-agricultural immovable or residential movable (mobile homes) is month to month
a non-residential lease of a movable is day to day, unless rent fixed for shorter/longer period (hourly,/weekly), in which case that is the term
Lessee rights to improvements:
lessee’s primary obligation is to restore property to pre-lease condition
lessee can take any improvements with him
if lessee leaves without taking improvements, then lessor can:
can take ownership of improvements and reimburse lessee either their cost or enhanced value of the thing OR
lessor can demand that lessee remove improvements within reasonable time
if lessee does not:
then can have them removed at lessee’s expense OR
appropriate the improvements, without paying for them (must send certified letter stating that he is doing this)
classification of obligations
real vs personal strictly personal vs heritable unilateral vs bilateral conditional : suspensiive / resolutory term obligation solidary vs joint vs several obligations conjunctive vs alternative divisible vs indivisible
Joint obligations:
Exist when multiple obligors owe a single performance, but they will each pay/do their part
Natural obligations:
Exists when the law implies a particular moral duty to render a performance.
Examples:
A prescribed debt. Once a debt prescribes, the obligee cannot bring suit to enforce. Therefore, no civil duty to perform, but the law implies a moral duty to perform.
A debt discharged in bankruptcy
An obligation incurred by one who lacks capacity
Dispositions in a will that is null for lack of form
capacity rules
every person has capacity except:
minors other than Ks related to necessary support, education, or his business (also excepting reasonable reliance on a minor’s lie)
interdicts
person deprived of reason = this means a person with temporary impairment (drunk) or a pervasive one which has not caused interdiction yet (alzheimers) –> relative nullity
if it’s an onerous contract, where other party neither knew or should have known of the deprivation of reason –> enforceable
Suretyship definition
an accessory contract where the surety binds himself to a creditor in order to guarantee an obligation if that principal obligor fails to pay
the surety promises that she will pay one or more of the debtor’s debts, if she fails to pay
suretyship contract depends on the enforceability of the principal obligation
surety contract must be express and in writing
if condition in conditional obligation does not occur because of benefiting party’s fault
then act as though the condition was fulfilled
damages from a delay only in performance
called moratory damages
calculated from date at which obligor put in default
can be put into default by the arrival of a term, notice in writing, orally in front o f 2 witnesses, filing a lawsuit, or provision in contract
for owner to opt out o f private works act
landowners can file notice of contract into mortgage records in parish where immovable is located
must be signed by owner and contractor, include addresses
must describe the immovable: street address is not enough; must be legal description
must describe the work
must state the price of the GC’s contract
must filed into the mortgage records “before work begins” — ie, before any building material is delivered to job site (note, excluded dirt work: digging/clearing)
then you have to pay for a construction claims bond — surety contract
simulation
a contract where the parties do not express their true cause in the written contract
a relative simulation is one where parties intend a different effect than the one that they state (ie, donation instead of sale)
an absolute simulation is one where parties intend no effect (ie, transfer on paper only)
Abuse of right doctrine / good faith in obligations
overriding duty of good faith imposed to all parties to an obligation
Obligee is prevented from asserting a legal right when primary purpose is to injure or harass the obligor.
warranty against redhibition
applies to all sales, of both movables and immovables unless excluded
test for cause of action =
(1) defect must render the thing useless OR so inconvenient the buyer would not have purchased OR diminishes value such that even if buyer would have purchased, he would have paid less
(2) defect must be hidden - not discoverable by reasonably prudent inspection
(3) defect must have existed at time of delivery (presumed if defect manifests within 3 days of purchase or shortly after thing put into use)
defenses to paying by surety
2 reasons:
that principal obligation was modified
that collateral to principal obligation was impaired
if ordinary surety –> either extinguishes surety.
if commercial surety –> surety liable only to original extent of obligation guaranteed
interruption of prescription
causes the time previously run to be wiped out; resets prescription
caused by
(1) filing of a lawsuit in a court of competent jurisdiction and venue - no interruption if P fails to prosecute, although settlement and voluntary dismissal valid for interruption
or
(2) acknowledgement:
If debtor acknowledges the validity of the creditor’s claim against him, to discourage the creditor from filing suit, this is sufficient to revive the claim
evidence sufficient to show acknowledgement =
by making partial payment,
by paying interest,
by pledging security
transfer of immovable
requires a writing
A verbal transfer of an immovable is enforceable if:
There is actual delivery of the immovable AND
The transferor recognized the transaction under oath
To bind third parties, the public records doctrine or the law of registry applies:
(1) instrument has to be filed in the parish ihn which the immovable property is located AND
(2) parishes have separate records for mortgages and conveyances (also leases go here) – have to file in right records
note: third person can include a witness to an act but not a notary.
suspension of prescription
pauses the running of prescription
an agreement by an obligor that he will bestow a benefit on someone who is not a party to the contract.
stipulation pour autrui:
note: third party can sue for enforcement, even though not party to original contract
oblique action
when creditor asserts a right that the debtor is not asserting.
requires:
pre-existing debt between debtor and creditor
right must be heritable
declining it must cause or increase insolvency
prescriptive period for damages caused by crime of violence
1 year
3 types of suretyship
legal suretyship (bail bondsmen)
commercial suretyship (if surety is paid to be surety; OR either surety or debtor is juridical person; OR principal obligation of surety is business deal)
ordinary suretyship (all others)
if act of sale only signed by one party
then by letter of law, sale is invalid HOWEVER if the non-signing party “availed himself of the contract” say by paying the purchase price or taking posession, then he is presumed to have signed and contract enforced
Effects of the obligation in relation to obligor:
Right to be discharged after performance or payment
real obligation definition
an obligation incurred because of a real right,
which is a right in a thing that is good against the world
The elements of a lease are:
The thing, the rent, and consent.
time of effectiveness of revocations and rejections
upon recipt
waiver of redhibitory defect is ineffective against __ faith seller who _____
bad; affirmatively lies.
a warranty is ineffective against a seller who has declared that the thing has a quality he knew it did not have
offer rules
offers are strictly personal
offer either revocable or irrevocable
revocable by default
irrevocable if a term to consider was given; term may be indeterminate - then applies for reasonable amount of time
rights and duties of buyer in eviction warranty hypo
duty to call in warranty to seller, and allow seller opportunity to defend against eviction.
duty to accept cured title from seller after original purchase
right to suspend payment to seller
right to sue chain of sellers back to source of defect - even if warranty against recent seller waived
effect of compromise on prescription
suspended on claims settled in compromise before the filing of a suit
If compromise is rescinded, prescription begins to run again
object of a sale
all things corporeal or incorporeal, susceptible of ownership, may be sold unless the sale of that thing is prohibited by law
sale of a future thing = this is the sale of something that does not yet exist. existence of the thing is a suspensive condition — if the thing never comes into existence, then no contract.
sale of a hope = saying that buyer is still obliged to pay the price even if thing doesnt come into existence. if buyer pays less than market value for the future thing, then uncertainty is absorbed in the price.
effect of performance on obliigation
extinguishes obligation
Valid for a third party’s performance except for strictly personal obligations
When obligor has multiple debts, and not clear which debt the payment is for, then we have imputation of payment
Obligee can apply payment to whichever debt but
If obligor doesn’t specify which debt the money is for, we assume it’s for the most onerous debt
gratuitous contract where a lender delivers a nonconsumable thing to a borrower and returns it
loan for use.
requires = the borrower must use the thing according to its nature, treat it as a prudent administrator, and give it back at the end
effect of nullification
when contract has been nullified, then the contract is deemed never to have existed
parties are returned to pre-contracting positions
in a sale: buyer gets price back, seller gets property back. if property transferred to good faith buyer, get value of property.
in personal services: damages in form of market value for services
ownership passes when and risk of loss in a sale
ownership passes at the moment that the sale is perfect. generally, this is when the parties have an agreement on thing and price. delivery and payment of price is not relevant to when ownership transfers
risk of loss from fortitous events (destruction) passes at DELIVERY
surety can raise any defense a debtor could against creditor except
that debt was discharged in bankruptcy
or that debtor lacked capacity (age)
vices of consent
error, fraud, duress
remedies for buyer in redhibition
if defect so bad that buyer would not have bought at all, rescission of sale
if buyer would have bought the thing, but at reduced price —> gets quanti menoris
contractual freedom to alter prescription means that
you can usually shorten but not extend prescription – cannot make it “more onerous”
contract to sell
bilateral agreement that may have suspensive conditions, whereby parties agree to enter into a sale at a later date, or at the happening of a condition.
for immovables, must be in writing.
right to specific performance in this contract can be negated by payment of “earnest money” in which case breach of contract to sell damages =/= specific performance but forfeiting earnest money
surety’s rights against debtor
surety who pays exigible debt may be reimbursed by debtor (debt not exigible, no reimbursement)
surety who pays debt “becomes” creditor and can exert any rights creditor had - including seize collateral, foreclose on mortgage, etc
surety can demand security from debtor to secure right of reimbursement
prescription suspended between people in favored relationshipis
between spouses during marriage
between child and parent during minority
between curators and interdicts during interdiction
prescription definition =
the effect of time on legal rights
contract interpretation
only engage in interpretation when there is ambiguity int he contract.
when words are clear and explicit and do not lead to absurd consequences, no further interpretation may be made
Action to rescind a partition
5 year prescriptive period
nonconforming acceptances for sales of movables
acceptance perfects contract as long as agreement on thing and price exists.
nonconforming terms automatically incorporated if both parties are merchants, unless new terms materially alter the offer or offeree objects within reasonable time –> then k exists but terms not incorporated.
if 1+ parties not merchants: then new terms never come into the k. new terms are just proposals for modification.
note: if this communication process does not form a contract, we can still look at whether the parties acted as though they had a contract binding them, and then we will hold them to a contract as though they had created one:
prescriptive period for damage to immovable
1 year
rules of act under private signature duly acknowledged
When an act was originally just signed by the parties
And then later the parties bring the writing to a notary with two witnesses, swearing that the signatures are theirs
to waive the warranty against redhibition
need clear and unambiguous language
brought to the buyer’s attention
if the act of sale provides for sale to be “as is” is not usually enough to waive warranty. both not clear and unambiguous AND something buried in contract not brought to attention to buyer
obligations can be transferred by
heritability
assumption (for obligor)
subrogation (for obligee)
subrogation of obligation
There is a complete substitution of a new party for the original obligee. The original obligee has no rights. Performance is due only to new obligee.
Conventional can occur between third person and obligor, or third person and obligee. More common for obligee to “assign rights” to a new obligee. This happens a lot when banks transfer rights to collect debts to another bank. Under conventional subrogation, can collect entire amount of the debt.
under legal subrogation, only have right to collect the amount you paid for the right - the cents-on-dollar price
in assignment of rights, security rights pass as well
did you discuss redhibition?
REMEMBER TO DISCUSS FRAUD!!
ways to get out of a solidary liability
obligee can renounce solidarity:
must be express, doesnt have to be in writing. then each obligor bound for his share. obligee can renounce solidarity as to one of many obligors - then other obligors solidarily liable for full amount minus virile portion of renounced obligor
Obligee can remit the debt:
releases debtor completely.
prescriptive period for open accounts
3 years
from when payment is EXIGIIBLE
writings and parol evidence in proving obligations:
When obligation requires a writing, oral testimony can only stand in for the writing itself if instrument was lost, stolen, or destroyed
can use parol evidence to prove vice of consent such as error or fraud
other ways to accept
by performing
through silence - but only if there is a history of dealing between parties
novation of obligation
It’s the extinguishment of an obligation by the substitution of a new one
novation is never presumed
Novation must be clear and unequivocal. A small change is not enough to novate. There must be intent to clearly eliminate a previous obligation and substitute for a new one.
may be subjective or objective:
objective novation is the substitution of a new performance
subjective novation s the substitution of a new debtor/obligor – not assumption, where obligor1 still solidarily liable. obligor2 in novation exclusively liable
prescriptive period for claim against home inspector
1 year
several obligataions
exist when multiple obligors owe entirely separate performances
Example: owner is refurbishing house. Hires Jill to do flooring work, Jack to do cabinet work. Even though maybe the work is contracted in a single document, they are providing separate performances. Therefore, they are not agreeing to do the different performances together.
Security deposit:
security deposit must be returned within one month of termination of the lease
aleatory contract definition
when the existence or extent of performance depends on an uncertain event
example: insurance contract
in the absense of a term
performance is due immediately
Termination of lease:
for fixed term lease, lease terminates at end of term; reconduction may occur
for indeterminate leaases, terminates at notice (must be in writing for immovables or mobile homes; all others oral notice is sufficient):
if term is longer than month-to-month, then party seeking to terminate the lease must give 30 days notice
if term is month to month, then either party must give 10 days notice
if term is week to week, then 5 days notice
if term is less than week to week, notice at any time
definition of a contract
an agreement that creates, extinguishes, and modifies obligations
price in a sale
price must be either certain OR determinable through a method through which the parties have agreed
if the determinability fails, court may fix a reasonable price for a sale of immovable property or movables of the kind the seller habitually sells.
Action against professional real estate service providers (surveyors, engineers, architects, etc), except for fraud, and different from “faults in construction” 10 year period
5 year prescriptive period
boilerplate contracts are called
contracts of adhesion
and in limited circumstances, to prevent injustice, may be subject to special scrutiny
contract enforcement prescriptive period
10 years unless otherwise specified in contract or nominate contract rule
Effects of the obligation in relation to obligee
Judicial enforcement of obligation
Right to damages if performance not forthcoming
term defiinition
A term is a period of time allowed for the performance of the obligation
impossibility of performance
completely nullifies contract ONLY when a fortuitous event makes performance impossible
A fortuitous event is one which cannot have been reasonably foreseen
Performance must be actually impossible, not just more burdensome
mortgage includes OR does not include predial servitudes not listed?
a mortgage, if the property is properly described, includes all rights associated with the land - so, if a predial servitude runs with the property, then is also included with mortgage
conflicts of law in contracts
substance: courts apply the rules of the state whose policies are most impacted by not applying the state’s law
contract is valid if its FORM is valid in AT LEAST ONE OF:
state where made
state where performed
state where parties were domiciled
or by the law governing the substance of the contract — unless the form requirements are a matter of public policy
the contract is valid if the parties have CAPACITY under AT LEAST ONE OF
the state where he was domiciled
or the state whose law is applicable
4 requirements for every valid contract in louisiana
capacity
cause
consent, as evidenced by offer and acceptance
object
definition of obligation
“an obligation is a legal relationship between two or more persons.” (obligee and obligor)
Exists when obligor owes a performance to the obligee AND
When obligee has right to compel that performance
prescriptive period for past due rent
3 years
begins running from date specific missed payment was exigible
Compensation:
Is a method of extinguishing two obligations owed simultaneously
Occurs when obligors are each others’ obligees.
Need identical things or sums of money owed each other.
The debts must be liquidated and presently due.
other definitions to apply to contracts
onerous vs gratuitous: principal vs accessory contracts: nominate vs innominate contracts: commutative contract: aleatory contract:
effects of real obligation
the obligation follows the property, not the person:
A real obligation is transferred to a person who acquires the thing without any agreement to that effect
The obligor is not personally bound – unless he agrees to be personally bound
The obligor may free himself of the obligation by selling the property, transferring by donation, or abandoning the property
conflicts of law and prescription
Always apply Louisiana laws of prescription unless (1) another state’s substantive law applies AND (2) compelling considerations of remedial justice require otherwise.
partial payment/paying interest/pledging security effect on prescription
runs anew from date of partial payment
can just be an action
prescription doesnt have to already have accrued
just have to act like a debtor
fraud rules and analysis
fraud is error induced by a party’s misrepresentation or suppression of trust, made with the intent to obtain an unjust advantage or cause a loss or inconvenience to the other party.
note that if truth was easily ascertainable, probably not fraud.
note also silence can be fraudulent only when there is a duty to disclose - family or fiduciary, or seller’s duty to disclose defects
Action to annul a testament
5 year prescriptive period
obligations of the seller
delivery
implied warranty against eviction
implied warranty against redhibitory defects
obligations of the buyer
has to take delivery
has to pay the price
there is a right of resale for movables only: seller can resell if buyer will not take delivery and can hold buyer liable for damages of difference between contracted price with buyer and later-obtained stopgap price
if buyer doesnt pay price, seller can dissolve the sale, however cannot dissolve sale if price was agreed by promissory notes and those have prescriibed (3 years)
prescriptive period for revocatory action
1 year from time creditor had actual or constructive knowledge
but never more than three years from the act
terminating a suretyship
relationship of surety terminated when
surety gives notice to the creditor (verbal sufficient)
or when creditor learns that surety has died
additional considerations in calculating redhibitory damages
seller gets reduction in damages for use of thing (ie, “rent” on property before rescission)
seller’s liability may be decreased from buyer’s inaction in notifying about defect
if buyer gets rescission, must treat property as prudent administrator until re-delivered to seller
if thing destroyed because of redhibitory defect, buyer still gets rescission.
if thing destroyed because of fortuitous act before buyer gave notice to seller, then no rescssion
contra non valentem
Contra non valentem applies in exceptional circumstances, such as when the plaintiff was prevented from enforcing his rights for reasons external to his own will.
fact dependent thing – that the plaintiff was prevented from bringing suit, usually courts want the plaintiff to have been prevented by the defendant
Spot super extreme egregious facts that might create a cause for contra non valentem, but note that it’s very likely to fail
obligor promising that performance will be rendered by a third person, not him, who is not party to the contract – is called
promesse de porte-fort:
note: if performance does not occur, then obligor is on the hook for lack of performance.
Arrearages of spousal support or installment payments awarded for education contribution claims
5 year prescriptive period
warranty of fiitness
has to be fit for its ordinary use.
breach of this warranty is governed by general rules o f contract
10 year prescription
general rules of breach
warranty extends to buyer’s particular use when:
buyer has communicated particular use to seller, or seller actually knows
seller has to know or should know that buyer is relying on his special skill picking out the item
three types of prescription =
acquisitive prescription
prescription of nonuse
liberative prescription
to pledge leases or rents of immovable to a third person
form: written, signed by pledgor, state numerical amount or max amount debt it secures, describes leases it intends to encumber
effective against third parties if filed in mortgage records of parish where immovable is
effective against tenants only upon written notice of pledge
Conditional obligation definition, 3 types
an obligation that depends on an uncertain event
Suspensive conditions = An obligation that is not enforceable unless and until the uncertain event occurs.
Resolutory conditions= An obligation that is immediately enforceable, but the occurrence of the uncertain event brings the performance to an end.
potestative conditions = are ok if condition is totally in the power of one of the parties (within his will) but not ok iif purely potestative (subject to his WHIM - defined as the obligor’s “unbridled discretion or arbitrariness.”)
damages for nonperformance
damages always available in nonperformance, even if specific performance also granted.
calculate = loss sustained by obligee + profit from which he h as been denied. must be proved to a reasonable certainty.
if obligor breached in bad faith, then include all damages and lost profits in direct consequence of the breach, whether or not they were foreseeable.
if obligor breached in good faith, then liable for only damages foreseeable at time the contract was made.
duty to mitigate = required when cost to mitigate would have been small compared to extreme losses from failure to mitigate AND it’s certain that mitigation would have avoided some of loss.
note: no attorney’s fees
3 types of mortgage
legal mortgage — not tested
judicial mortgage – when judgement creditor receives a money judgement; files in the mortgage records of the parish where debtor owns immovable property OR MAY SUBSEQUENTLY ACQUIRE immovable property; attaches by operation of law to all immovable property that the debtor owns or will own; prescribes 10 years from date of judgement; may be revived only by original court
conventional mortgage – can only encumber specific property of the debtor
nullity
relative nullity when a rule intended to protect a private party has been violated (capacity, consent bad). nullity may be invoked only by that party, and must be within 5 years of cessation of nullifying force (eg, duress ceased, minority ended, fraud discovered)
absolute nullity when a rule of public order has been violated (cause, object). may be invoked by anyone and is imprescriptible.
note: single provision may be nullified, leaving rest of contract fine: rule of severability
revocatory action
when:
there is a preexisting obligation between creditor and debtor; and
debtor engages in another contract;
and
that contract causes or increases the debtor’s insolvency
–> creditor can sue to annul the contract
not available for contracts in course of debtor’s business;
effect:
for onerous contracts, if third person knew or should have known that transaction would cause/increase debtor’s insolvency, then rescind. must return thing. does not get back price if paid under 4/5 of market value, except that portion of price that went to the suing creditor. if paid more than 4/5 market price, or didnt know that transaction increased insolvency, gets price back
for gratuitous contracts, annulled.
cause definition
cause is the reason why a person obligates himself
issues where cause is going to come up:
distinguish between onerous and gratuitous contract. if the cause for which an obligor has bound himself is to obtain a benefit, then onerous contract. if the cause for which an obligor has bound himself is to benefit an obligee, then gratuitous contract.
vices of consent: to decide whether someone should be relieved of burdens of contract because of an error, determine how close the error is to the cause of the obligor — whether error rescinds a contract
to determine whether a contract is absolutely null because of obligor’s illegal or immoral cause.
lease
bilateral contract where one party give use and enjoyment of a thing in exchange for rent
thing can be anything except for a consumable
rent: must be either certain or determinable. court cannot fix
form: all can be oral, including for immovable property. must be recorded to be effective against third parties.
prescriptive period for money lent / debts
3 years
starts running when payment is exigible
when proceeding in redhibition, if buyer did not notify good faith seller of a defect and give them the opportunity to repair, then
buyer may suffer diminuation of the warranty to the extent that the seller can show that the defect could have been repaired OR that t he repairs would have been less burdensome
mortgage vs. PWA privilege which comes first analysis
mortgage counts from the date of mortgage recordation; PWA privilege counts from the date when work subject to the privilege started.
so, if work on project started before mortgage, then privilege wins. doesnt have superpriority though.
when buyer has proved that warranty against eviction existed and was breached, what to do?
if PARTIAL eviction, then buyer gets rescission only if he can prove he would not have bought it had he known of partial eviction
if he would have bought it but for lower price, diminution of price
hypo: i bought a building to open a restaurant, and it has a utility servitude on it that you (seller) granted AND has a no-restaurant servitude on it that seller’s seller (not you) granted. what happens if there is a waiver of warranty? what if not?
- if waiver of warranty, then effective on the servitude that the seller’s seller granted. HOWEVER not effective against the seller’s grant of servitude: i get rescission, damages, and reimbursement.
- if no waiver of warranty, then eviction –> gets damages, reimbursement for improvements, and rescission. NO attorneys fees
waiver of eviction hypo analysis steps
(1) was the eviction apparent? if yes, not an eviction
(2) was there a waiver of warranty? sale of hope/quitclaim
(3) was the eviction complete or partial?
(4) was eviction caused by seller’s own act (ie, grant/sale by seller)
(5) would buyer still have bought the thing if he knew of eviction?
–> calculate liability and damages accordingly.
if no waiver and buyer would not have bought: rescission + damages + reimbursement for improvements
if no waiver and buyer would have bought for less: damages + reimbursement
if peril and risk waiver and buyer would not have bought: no recovery
if non warranty sale and buyer would not have bought: rescission but no damages
moment when ownership transfers in sale for:
- lump
- weight/count/measure
- by individual
by lump, it’s when sale perfected by agreement
by weight/count/measure, it’s when the goods are counted/separated from other similar things
by individual, its when the thing/s is set aside as per sale agreement
transfer of ownership issues and goods in transit
rule is that ownership is determined by bill of lading
if bill of lading consigns goods to buyer, then goods are owned by buyer in transit
if bill of lading consigns goods to seller, then goods owned by seller until delivery to buyer
theft of thing, after a sale has been agreed to
loss of a thing by fortuitous event prior to delivery =
risk of loss is transferred to buyer only AT DELIVERY
so, any loss before delivery is seller’s liability
vendor’s privilege has superpriority over mortgages when
recorded within 7 days of credit sale, or 15 days of credit sale if sale conducted in a different parish from where immovable property is located
PWA privileges date from
the date that work begins on the project excluding demolition or dirt work
OR
date first materials delivered to job site
even if the claiming subcontractor did not begin work until later
