Contracts

Question 0

which is incorrect law?

a. a contract is formed by consent of parties established through offer and acceptance
b. unless otherwise specified in offer, there must be conformity in manner offer is made and manner acceptance made
c. unles law prescribes a certain formality of intended K, offer and acceptance may be oral, written, or by performance
d. an offer expires by death or incapacity of offeror or offeree before acceptance
e. a revocable offer expires if not accepted in reasonable time

Answer 0

b. no conformity in offer and acceptance manner is required.

Question 1

What are the requirements for a valid contract

Answer 1

Capacity
Consent
Cause
Lawful Object

Question 2

what are the types of contracts

Answer 2

unilateral/ bilateral
onerous/ gratuitous
principal/ accessory
nominate/ innominate
cummutative/ aleatory

Question 3

in a bilateral contract, what are the two requirements?

Answer 3

both parties must have incurred obligations
and
have been incurred to receive the performance promised by the other party

Question 4

what is a principal contract vs accessory contract?

Answer 4

principal is a contract whose obligation is secured by accessory contract. accessory contract provides security for the performance of principal.

Question 5

what is cummutative vs aleatory contract?

Answer 5

cummutative : performance correlates with performance by other party
aleatory: performance depends on uncertain event (like insurance K)

Question 6

an aleatory contract is:

a. a contract under which the performance of either party’s obligation depends on uncertain event.
b. a contract that does not express true intent of parties
c. a contract where quanitity of contractual object is determined by output of one party
d. contract with covenant as its object
e. contract for which law supplies no special designation

Answer 6

a

Question 7

a contract made by a person without legal capacity is:

a. relatively null and may be rescinded only at request of that person
b. relatively null and may be rescinded at the request of any person
c. absolutely null and may be rescinded only at request of that person
d. insusceptible of confirmation
e. example of a contract that violates rule of public order

Answer 7

A. relatively null and may be rescinded at request of that person or his representative.

Question 8

who does not have capacity

Answer 8

unemancipated minors, interdicts, and person deprived of reason at time of contracting

Question 9

when may minors have enforceable contracts

Answer 9

when other party reasonable relied on minors representation of majority;
made for something related to minors business or needed for support or education, or falls in special rules for minors with respect to gratuitous contracts

Question 10

when may noninterdicted person deprived of reason have enforceable contract

Answer 10

when the other party knew or should have known of incapacity

Question 11

who may rescind for reason of lack of capacity

Answer 11

only the party without capacity. a contract entered into by such a party is a relative nullity

Question 12

a contract made by a person without legal capacity:

a. is absolutely null
b. relatively null
c. may be rescinded at request of any party to K
d. is not susceptible of confirmation
e. does not give rise to natural obligation, regardless of whether the incapable person was endowed with discernment

Answer 12

b. relatively null

Question 13

a relatively null contract:

a. is considered by law to be null because it is between relatives
b. is ac ontract that violates a rule of public order
c. is a contract that violates a rule intended for protection of private parties
d. is contract the object of which is illicit or immoral
e. may be annulled by any person in a suit for annulment brought within ten years from time the ground for nullity either ceased or was discovered

Answer 13

c. violates a rule intended for the protection of private parties

Question 14

When is acceptance effective?

Answer 14

when offeree transmits it, so long as it is made in manner and by a medium suggested by the offer or in a reasonable manner.

For an irrevocable offer: acceptance is effective when offeror receives it, which occurs when acceptance comes into his possession

Question 15

When is acceptance by performance effective?

Answer 15

when performance begins, however if offer is for completed performance then cannot revoke once performance has begun for a reasonable time needed to complete the performance.

Question 16

can silence be acceptance?

Answer 16

yes if it leads offeror to reasonably believe that the offer has been accepted

Question 17

an offer of reward to public is binding on offeror:

a. only if person who performs act knows of offer
b. even if person who performs does not know of offer
c. only if person who performs relies to his detriment on offer in performing act
d. even if offeror before completion revokes offer
e. only if formal requirements of donation inter vivos are met.

Answer 17

b. even if the person who performs does not know of the offer

Question 18

what is detrimental reliance? (criteria)

Answer 18

a promisor can be obligated by a promise under detrimental reliance if three criteria are satisfied:
1. relied on promise to her detriment
2. promisor knew or should have known they would rely
3. promisee was reasonable in relying
(not reasonable if promise was gratuitous one without required formalities, recovery is discretionary with court)

Question 19

what may be the object of a contract?

Answer 19

any object that is lawful, possible, and determined or determinable. may be future things, act by a third party okay but requires that party to bind himself

Question 20

the code lists the following vices of consent:

a. error, fraud, duress
b. error, fraud, unlawful cause
c. error, fraud, ambiguity
d. error fraud lack of good faith
e. error fraud duress unlawful cause ambiguity lack of good faith

Answer 20

a. error fraud duress

Question 21

what are the types of error?

Answer 21

bilateral error- consent is vitiated if both parties in error, but they can reform instrument

unilateral error: one party in error, vitiates consent if: it concerns a cause without which the obligation would not have been incurred AND this cause was known or should have been known by other party

Question 22

when does unilateral error concern the cause?

Answer 22

when it bears on:
the nature of the contract
the object or quality of object
person or qualities of other party
anything the parties regarded or should have regarded in good faith as cause
law when a party has drawn erroneous conclusion of law
use but for causation

Question 23

what is fraud?

Answer 23

misrepresentation or suppresion of truth made with intent to obtain unjust advantage or cause loss or inconvenience to other party. may have fraud by commission and fraud by omission. It does NOT vitiate consent when party could have ascertained truth without difficulty unless a relation of confidence has reasonably induced party to rely. can be result of silence.

Question 24

what is duress?

Answer 24

conduct must have been of such a nature as to cause a reasonable fear of unjust and considerable injury to a partys person, property, or reputation.

Question 25

which is correct:

a. interpretation of a contract is the determination of the common intent of the parties
b. when words of K are clear and explicit and lead to no absurd consequences , interpretation in search of parties intent is appropriate when necessary to conform the parties agreement to prevailing usages
c. when the parties intend a K of general scope but to eliminate doubt, include a provision that describes a specific situation, the proper interpretation of the K is to restrict its scope to that situation alone
d. in case of doubt that cant otherwise be resolved a K must be interpreted against the obligor and in favor of the obligee
e. all of above

Answer 25

A. Interpretation is determination of common intent of parties.

Question 26

When is a contract null

Answer 26

when the requirements for its formation are not met, may be absolute or relative

Question 27

what is an absolute nullity

Answer 27

when contract violates a rule of public order (immoral). it cannot be confirmed and action to annul does not prescribe

Question 28

what is a relative nullity

Answer 28

violates rule intended for protection of private party. (lack of capacity or consent) can be confirmed. May be invoked only by the one it protects. Recission: Five year prescription from time nullity ceased or was discovered. May be raised as defense anytime.

Question 29

what are the effects of nullity?

Answer 29

K is deemed never to have existed. Restoration or damages can be awarded. Does not impaire the rights acquired through an onorous contract by a third party in good faith

Question 30

which is correct?

a. nullity of principal obligation renders a stipulated damages clause null
b. nullity of stipulated damage clause renders principal obligation null
c. obligor whose failure to perform the principal obligation is justified by a valid excuse is nonetheless bound for payment of stipulated damages

Answer 30

A. nullity of principal obligation renders a stipulated damages clause null

Question 31

what constitutes breach of contract

Answer 31

nonperformance, defective performance, or delay in performance

Question 32

what are the rights of obligee if obligor breaches?

Answer 32

damages and specific performance or dissolution

Question 33

What rights of obligor if Obligee breaches?

Answer 33

specific performance (discretionary to court if obligation is to do something or based on detrimental reliance) ; damages
if good faith, then reasonably foreseeable damages only. if bad faith then all damages direct consequence of failure to perform. (bad faith is intentional and malicious failure to perform); emotional distress; contract modification; stipulated damages

Question 34

which of the following is correct statement:
a . the choice of law by the parties to a contract is enforceable only to the extent that the law chosen is the law of the state whose policies would be most seriously impaired if its law were not applied to the contract
b. the choice of law by the parties to a contract is enforceable only if the law chosen is the law of a state in which at least one of the parties is domiciled
c. all issues of conventional obligations are governed by the law expressly chosen by the parties provided that the law chosen is 1. the law of the state of making 2. the law of state of performance or 3. the law of the state of common domicile or place of business of the parties
d. all issues of conventional obligations are governed by the law expressly chosen by the parties
e. none of the above

Answer 34

E. none of the above

Question 35

a judicial mortgage:

a. a general mortgage affecting all movable and immovable property of obligor
b. a general mortgage burdening only that immovable property owned by the obligor at the time that the judicial mortgage is created
c. a general mortgage burdening the property of the obligor as well as all property of his heirs
d. a general mortgage established all over property susceptible of mortgage that the obligor owns when the judicial mortgage is created and over furture property susceptible of mrotgage when the obligor acquires it
e. a special mortgage that is created by filing with the recorder of mortgages a judgment expressly declaring or recognizing that the judgment creditor has a mortgage upon property of mortgagor

Answer 35

D. a general mortgage established all over property susceptible of mortgage that the obligor owns when the judicial mortgage is created and over furture property susceptible of mrotgage when the obligor acquires it

Question 36

in a revocatory action seeking the annulment of a gratuitous contract made by an obligor, which of the following must the plaintiff prove?

a. that the contract caused or increased the obligors insolvency
b. that the plaintiff has rights against the obligor upon a claim that was liquidated by judgment prior to execution of the K
c. that the other party to the K knew the K would cause or increase the obligors insolvence
d. that the K was made in fraud of the plaintiffs rights
e. all of above

Answer 36

a. that the K caused or increased the obligors insolvency

Question 37

which is correct?

a. there is a management of affiars when a person acts with tacit authority to protect the interests of another in the reasonable belief that the latter has authorized the action
b. management of affairs is synonymous with unjust enrichment
c. management of affairs is subject to the rules of mandate to the extent those rules are compatible with management of affairs
d. the owner whose affair has been managed is not bound to fulfill an obligation that the manager has undertaken as a prudent administrator if he repudiates the obligation upon hte obligee’s demand for performance of the obligation
e. one who assumes the management of affairs of another must exercise the care of a purdent administrator but is answerable for any loss that results from his failure to do so only a showing of self dealing, breach of fiduciary duty, or bad faith

Answer 37

C. A management of affairs is subject to rules of mandate to the extent those rules are compatible with management of affairs

Question 38

which of the following must be in writing to be enforceable?

a. the sale, lease, and mtg of an immovable
b. a mortgage, a security agreement, and a contract having a price or value exceeding $500
c. a suretyship, a transaction or compromise that it reached out of open court and a conventional mortgage
d. the sale of future things, the sale of a hope, and sale of a thing pending litigation ownership
e. all of the above

Answer 38

c. a suretyship, a transaction or compromise that it reached out of open court and a conventional mortgage

Question 39

which of the following is essential to establishment of a conventional mortgage between the parties?

a. a statement that the promissory note secured by the mortgage has been paraphed for identification with the mortgage
b. the signatures of both mortgagor and mortgagee
c. filing of the mortgage in the mortgage records of the parish in which property is located
d. execution of mortgage is in authentic form
e. none of above

Answer 39

e. none of above. paraphs are no longer necessary, only themortgagor must sign, filing the mortgage is for effectiveness against third parties, not the original parties and an act under private signature is fully suficient for a mortgage.