Contracts

Question 1

Vices of Consent

Answer 1

(1) Error
(2) Fraud
(3) Duress

vitiation of consent results in a relative nullity

Question 2

Unilateral Error

Answer 2

vitiates one party’s consent if:
(1) cause was one without which the obligation would not have been incurred (but-for)
(2) cause was known or should have been known to the other party

Question 3

Remedies for Unilateral Error

Answer 3

rescission of the contract (but party rescinding is liable for loss sustained by other party unless other party knew of the error)

Exceptions:
(a) other party is willing to perform the contract as written
(b) effective protection of other party’s interest requires that contract be upheld (damages instead)
(c) error was inexcusable

Question 4

Prescription Period for Error

Answer 4

5 years from date error was discovered

RELATIVE NULLITY

Question 5

Fraud

Answer 5

(1) the misrepresentation or suppression of the truth
(2) made with the intent to obtain an unjust advantage or cause a loss or inconvenience to the other party
(3) that “substantially influenced” consent

Question 6

Fraud: Exception

Answer 6

fraud does not vitiate consent when a party could have ascertained the truth without difficulty or special skill

UNLESS there was a relationship of confidence between the parties that induced a party to reasonably rely on assertions

Question 7

Fraud: Remedies

Answer 7

rescission, damages and attorneys’ fees

Question 8

Fraud: Silence

Answer 8

silence is only considered fraud when the facts justify the imposition of a duty to speak

Question 9

Fraud: Committed by a Third Party

Answer 9

only vitiates consent if the party not in error knew or should have known of the fraud

Question 10

Prescriptive Period for Relative Nullities

Answer 10

5 years

Question 11

Detrimental Reliance

Answer 11

(1) promisee relied on promise to her detriment
(2) promisor knew or should have known that. the promisee would rely
(3) promisee was reasonable in relying

*if promise was gratuitous, reliance is not reasonable

Question 12

Detrimental Reliance: Recovery

Answer 12

entirely within the discretion of the court

can limit damages to expenses incurred or include all damages suffered by promisee

Question 13

Ratification through Conduct

Answer 13

a contract signed by one party can be enforced against the other party when the other party’s conduct ratifies the contract

(jurisprudence rule)

Question 14

Suspensive Condition

Answer 14

obligation is not enforceable unless and until the uncertain event occurs

Question 15

Resolutory Condition

Answer 15

obligation is immediately enforceable but comes to an end if the uncertain event occurs

Question 16

Postative Condition

Answer 16

condition whose fulfillment is within a party’s power

Question 17

Suspensive Postative Condition

Answer 17

depends solely on whim of obligor = null

depends solely on will of obligor = valid

Question 18

Suspensive Postative Condition

Answer 18

depends solely on whim of obligor = null

depends solely on will of obligor = valid

Question 19

Whim

Answer 19

obligor’s unbridled discretion or arbitrariness

Question 20

Will

Answer 20

considered weighing of interests in the exercise of reasonable discretion

Question 21

Resolutory Postative Condition

Answer 21

party’s power must be exercised in good faith, valid

Question 22

Revocatory Action

Answer 22

action taken by an obligee to revoke an act (or failure to act) by the obligor that causes or increases his insolvency

the act or failure to act must have occurred after the rights of the obligee arose

Question 23

Revocatory Action: Onerous Contract

Answer 23

when the third party DID know that the act would cause/increase insolvency –> third part can only recover what he gave that benefitted the obligor’s creditors

when the third party did NOT know that the act would cause/increase insolvency –> third party can recover everything he gave to the obligor

Question 24

Revocatory Action: Gratuitous Contract

Answer 24

third party’s knowledge of insolvency is irrelevant - obligee can bring revocatory action regardless

Question 25

Subrogation

Answer 25

the substitution of one person to the rights of another

Question 26

Assumption

Answer 26

an assumption by a third person of an obligation of an obligor

original obligor is NOT released

Question 27

Novation

Answer 27

the extinguishment of an old obligation by the substitution of a new one

original obligor IS released

never presumed - must be shown that a novation was intended by clear and unequivocal evidence

Question 28

Transfer of Immovable Property

Answer 28

must be made by act under private signature

Question 29

Transfer of Immovable Property: Exception

Answer 29

oral transfer is allowed when the property has been delivered and the transferor recognizes the transfer when interrogated under oath

Question 30

Recovery of Nonpecuniary Damages

Answer 30

only available under 2 circumstances:
(1) because of its nature, contract was intended to gratify a non pecuniary interest AND the obligor knew/should have known that his failure to perform would cause that kind of loss

(2) obligor intended to aggrieve the feelings of the obligee through his actions

Question 31

Vendor’s Privilege

Answer 31

if buyer defaults on the promise to pay for a credit purchase, creditor can have the purchased property seized and sold and apply proceeds to the unfulfilled obligation

on moveables - created as a matter of law

only benefits creditor, and only while immediate buyer has possession of the property

can only be enforced after vendor obtains a judgment on the unpaid obligation and seeks to enforce the judgment

Question 32

Joint, Several, and Solidary Obligations/Obligors

Answer 32

several: each obligor owes individual (unique) and complete performance

joint: obligors together owe 1 performance and no obligor is bound for the whole

solidary: each obligor is bound for one performance and obligee may call upon any obligor for the whole performance

Question 33

Acquisitive Prescription vs. Liberative Prescription vs. Prescription of Nonuse

Answer 33

Acquisitive Prescription: mode of acquiring ownership or another real right by virtue of possession for a period of time

Liberative Prescription: barring of an action because of the passage of time

Prescription of Nonuse: method by which a real right (other than ownership) is extinguished because it is not exercised for a period of time

Question 34

Subjective vs. Objective Novation

Answer 34

Subjective Novation: new obligor is substituted for a prior obligor who is discharged by obligee

Objective Novation: agreement of the parties where a new performance is substituted for that previously owed

Question 35

Absolute Simulation vs. Relative Simulation

Answer 35

Absolute Simulation: parties intend to have NO legal effect; produces no legal effects

Relative Simulation: parties intend to have a legal effect different than that recited; produces legal effects as to the parties’ true intent (so long as form requirements are satisfied)

Question 36

When are damages owed/accruing?

Answer 36

damages are owed from the time the obligor has failed to perform

Question 37

Prescription period for late rent?

Answer 37

action for arrearages of rent prescribes 3 years from date exigible

but if acceleration clause, all remaining rent is due on day lessor sent notice that all remaining rent is due (so start prescription from then)

RENT IS USUALLY CONJUNCTIVE