Code III - Contracts Flashcards
Onerous Contract
reason to bound is for benefit to self
Gratuitous Contract
reason to bound is to benefit obligee
Principal Contract
contract whose obligation is secured by an accessory contract
Accessory Contract
provides security for the performance of another obligation
Nominate Contracts
is given special designation
Innominate Contracts
has no special designation
Commutative Contract
where the performance by one party is correlative to the performance by another party
Aleatory Contract
performance or extent of performance of any party to contract depends on an UNCERTAIN event
Requirements for Valid Contract
- Capacity
- Consent (through offer and acceptance)
- Cause
- Object
Capacity
All persons have capacity EXCEPT:
1. unemancipated minors
2. interdicts
3. persons deprived of reason
Consent
Evidenced by offer and acceptance
Offer
personal to offeree
revocation of offer must be received PRIOR to acceptance of offer
if specified period of time for acceptance, irrevocable during that time
Revocable offer = expires if not accepted within a reasonable time
Irrevocable offer = expires if not accepted during period which irrevocable
Acceptance
revocable offer = effective when offeree transmits acceptance (mailbox rule)
irrevocable offer = effective when offer receives it (possession)
Acceptance by silence
must reasonably lead the offeror to believe acceptance
Nonconforming acceptance
acceptance not in accord with terms of the offer is a COUNTEROFFER
Offer of Rewards to the Public
binding on offeror regardless of whether the person who performs the requested act knows of the offer
can be revoked ONLY by same or equal means of offer
Contracts of Adhesion
standard contract prepared by a party of superior bargaining power for adherence or rejection by weaker party
Cause
must be either:
1. a lawful cause; OR
2. Detrimental reliance
Need NOT be expressed
Simulation
When parties true cause is not expressed
Detrimental Reliance
- Promisee RELIED on the promise to their detriment
- promisor knew or should have known that the promisee would so rely; AND
- promisee was reasonable in so relying
Object
lawful, possible, and determined or determinable
Determined or Determinable Object
must be determined AT LEAST AS TO KIND but the quantity need only be determinable
CAN be left to discretion of third party; if they fail court may do so
Future things OKAY
Promesse de Porte-Fort
contract the object of which is an act done by a third party
Stipulation Pour Autrie
stipulate benefit for a third person (third-party beneficiary)
Once 3p manifests intent to accept the benefit it is irrevocable
Vices of Consent
- Error
- Fraud
- Duress
Error
either party may obtain rescission
If one party is in error error will vitiate consent if:
1. concerns a cause without which the obligation would not have been incurred
2. cause was known or should have been known to the other party
Fraud
misrepresentation or suppression of the truth made with the intent to obtain an unjust advantage or cause a loss or inconvenience to the other party
DOES NOT vitiate consent when a party could have ascertained the truth w/o difficulty or special skill UNLESS a relation of confidence exists
Need not be but-for-cause - substantially influenced consent
Fraud through silence
Fraud by 3p vitiates consent if other party knew or should have known of the fraud
Duress
cause a reasonable fear of unjust and considerable injury to a person, property, or reputation
Interpretative Rules
each provision should be interpreted in light of the other provisions
if cant resolve interpret against drafter
interpreted against obligee and for obligor
Null Contract
requirements for formation are not met
Absolute or relative
Absolutely Null
violates rule of public order
CANNOT BE CONFIRMED
Action to annul does not prescribe
Relatively Null
violates rule intended to protect a private party
can be confirmed
only party rule intended to protect may invoke
prescribed in 5 years
Effects of Nullity
contract deemed never to have existed
Good Faith Requirement
Contracts MUST be performed in good faith
failure = greater liability for damages
Contractual Breach
- Nonperformance
- defective performance
- delay in performance
Aggrieved obligee entitled to pursue SPECIFIC PERFORMANCE or DISSOLUTION
Obligor’s Breach - Liability
Liable for damages
Specific Performance
Measuring damages
loss sustained by the obligee AND the profit of which he is deprived
lost profits must be proven to a reasonable certainty (if unable court has discretion)
Bad Faith Liability
liable for ALL damages that a direct consequence of failure to perform
Effect of Obligee’s Actions
my NOT recover if:
1. bad faith caused obligor to fail to perform
2. he concealed facts that he knew or should have known would cause a failure at the time the contract was formed
Obligee has a duty to mitigate damages
Nonpecuniary Damages
(emotional distress) MAY be recovered IF:
- contract intended to gratify a nonpecuniary interest
- obligor knew or should have known that his failure to perform would cause this kind of loss
May also recover if through failure INTENDED to hurt or aggrieve the obligee’s feelings
Modification of Liability
may address matter of damages in contract
MAY NOT exclude or limit liability for intentional or gross fault that causes damage to the other party
MAY NOT exclude or limit liability for physical injury
Stipulated damages
obligee may demand EITHER specific performance OR stipulated damages NOT both
UNLESS stipulated damages are purely delay damages
Delay Damages (Moratory)
owed from the time an obligor is put in default
Dissolution
obligor fails to perform obligee may request judicial or regard the contract dissolved
Extrajudicial Dissolution
may regard contract dissolved upon the obligor’s failure to perform IF there is an express agreement between the parties
Dissolution after Notice
obligor fails to perform, obligee MAY give notice to perform within certain time, or dissolution
time must be reasonable
Dissolution w/o Notice
regard contract dissolved if it is evident the obligor will not perform or if delayed performance would be of no value
Judicial Dissolution
unless requirements for extrajudicial dissolution are met NO entitlement to judicial dissolution
Effects of Dissolution
Parties restored to the situation that existed before the contract was made.
If impossible or impractical court may award damages (does not affect prior performance for continuous or periodic performance)
Simulation
parties agree that a contract does not express their true intent
IF trues intent is expressed in a separate writing (counterletter)
Absolute Simulation
parties intend the contract will produce NO effects
Relative Simulation
parties intend that the contract will produce and effect DIFFERENT from the one recited in the contract
Effect of Simulations on 3ps
absolute or relative MAY
counterletter has NO effect against 3p in good faith
Counterletter on immovable prop follows public record doctrine regarding 3ps
Revocatory Actions
obligee MAY annul an act or the result of a failure to act of an obligor that causes or increases his insolvency
occurred AFTER the right of the obligee arose
Onerous K made by Obligor (revocatory action)
Obligee MAY annul if made with a person who knew or should have known that the contract would cause or increase insolvency
Gratuitous K made by obligor (revocatory action)
may attack whether or not other party knew of potential insolvency
K made in course of business (revocatory action)
MAY NOT BE ANNULLED
Revocatory action time Period
1 year from when obligee learned or should have learned of the act BUT MAY NOT be brought after 3 years
Oblique Action
obligor causes or increases his insolvency by failing to exercise a heritable right
Obligee MAY exercise it UNLESS the right is strictly personal to the obligor
Conflict of Law
conventional obligations is governed by the law of the state whose policies would be MOST SERIOUSLY IMPAIRED if its law were not applied
Valid Form of Contract (conflict of laws)
valid as to form if valid with the law of:
1. state of making
2. state of performance
3. common domicile or place of business of the parties
4. substance of the contract
Capacity (conflict of law)
capable if possess capacity under the law of:
1. state which domiciled
2. state whose law is applicable
Deposit
contract which depositor delivers a movable thing to the depositary for safekeeping
Liability for Losses (deposit)
liable for all loss sustained resulting from breach of the standard of care
onerous depositary = bound with diligence and prudence
Gratuitous = depositary is held lower, same care and use as own property
Use of Deposited Thing
may not use deposited thing without express or implied permission
IF it is consumable it is a loan for consumption
Return of Deposited thing
depositary is bound to return the thing and all fruits that he received from the deposited thing at agreed upon place
costs of transportation borne by depositor
Loan
Loan for use = nonconsummable
Loan for Consumption = Consumable (replace with same kinda and quality)
Compromise
one or more parties make concessions to settle a dispute or uncertainty concerning an obligation or other legal relationship
Settle only differences clearly intended to be settled
Accord and Satisfaction (compromise)
made when claimant of a disputed or unliquidated claims accepts payment by the other with clearly expressed WRITTEN condition that acceptance of the payment will extinguish the obligation
