Effects of Contracts - Damages; Moratory Damages

Question 1

When is the obligor liable for damages?`

Answer 1

Failure to Perform, Generally—An obligor may fail to perform an obligation in one of three ways: (1) nonperformance, (2) defective performance, or (3) delay in performance. If any of these occur, the obligor is liable for damages.
Note: this applies to all forms of damages, not just moratory damages

Question 2

Putting in default required

Answer 2

Putting in Default Required——“Damages for delay in the performance of an obligation are owed from the time the obligor is put in default. Other damages are owed from the time the obligor has failed to perform” (La. Civ. Code art. 1989) Be sure to read the comments to this article carefully.
(a) Explanation—Putting the obligor in default is required for the recovery of damages for delay in performance. Putting in default is not required to recover damages for nonperformance or defective performance. (La. Civ. Code art. 1989) As we shall see, similar notice is required in some cases of dissolution. See La. Civ. Code art. 2015.

Question 3

Distinction from other failures to perform

Answer 3

i. Defective Performance—Delayed performance is distinguished from defective performance, which is performance rendered on time but substantively lacking. Thus, if A agrees to sell his car to B and delivers said car on time, but the car is substantially damaged, then performance is defective.
ii. Nonperformance –Delayed performance is distinguished from nonperformance, which is performance that is not rendered in any form. Thus, if A agrees to sell his car to B and never delivers the car, then nonperformance has occurred.
iii. Anticipatory Breach—Delayed performance is distinguishable also from the common law concept of “anticipatory breach.” This concept is subsumed in the civil law category of nonperformance, as it is in the common law. Thus, if A agrees on Monday to sell his car to B and to deliver on Wednesday, and on Tuesday A informs B he will never deliver the car, then nonperformance has occurred.

Question 4

Damages for Delayed Performance

Answer 4

Damages for delay or moratory damages presuppose a performance is actually rendered, but late. Thus, these damages compensate for untimeliness in performing. These damages may stand alone, as a case where performance is late but eventually rendered. See La. Civ. Code art. 1989 cmt. (b).

Question 5

Methods of putting in default

Answer 5

a. By the Arrival of a Term—“When the term for the performance of an obligation is either fixed, or is clearly determinable by the circumstances, the obligor is put in default by the mere arrival of that term. In other cases, the obligor must be put in default by the obligee, but not before performance is due.” (La. Civ. Code art. 1990)
i. Explanation—When the obligor is supposed to perform by a particular time, he is put in default automatically when she fails to perform at that time.
(a) A fixed term. A agrees to make a dress for B. A and B agree that the dress will be delivered to B on May 1. A fails to deliver on time. A is put in default automatically by the failure to perform on time.

								- Performanc was arguable 223 days late. Plaintiff is asking for delay damages. Defendant was automatically place in deafult due to the arrival of the term.
								- The state was also at fault for the lateness of the performance, because they were not ready to perform.
							(b) A clearly determinable term.  A agrees to make a dress for B’s wedding.  A knows that the wedding is on May 1, but no specific date for delivery is set forth in the contract.  A fails to deliver by May 1.  A is put in default automatically by the failure to perform on time.  See La. Civ. Code art. 1990 cmt. (b).

ther Methods—“An obligee may put the obligor in default by a written request of performance, or by an oral request of performance made before two witnesses, or by filing suit for performance, or by a specific provision of the contract.” (La. Civ. Code art. 1991)

						i. Written Notice—No special wording is required, as long as the writing communicates a request for performance.
						ii. Oral Notice Before Two Witnesses—Oral communication is sufficient if made before two witnesses.  What is the purpose of the witnesses?  
						iii. Suit for Performance—La. Civ. Code art. 1991 refers to a “suit for performance.”  However, Louisiana courts have held that the suit need not be a suit for “specific performance.”   Any suit for performance, damages, or dissolution, will suffice to put the obligor in default.    
						iv. Contractual Provision—The contract can provide for a putting in default under certain circumstances or even automatically.  If this is done, then the delay damages are owed from that time without the necessity of additional notice to the obligor.