Effects of Contracts - In General

Question 1

General Effects

Answer 1

a. General Effects
(i) Effect of Law—“Contracts have the effect of law for the parties and may be dissolved only through the consent of the parties or on grounds provided by law.” (La. Civ. Code art. 1983)
(ii) Effects Between the Parties—Conventional obligations produce the same effects between the parties as obligations in general.
(a) Effects as to Obligee—“An obligation may give the obligee the right to: (1) enforce the performance the obligor is bound to render; (2) enforce performance by causing it to be rendered by another at the obligor’s expense; (3) recover damages for the obligor’s failure to perform, or his defective or delayed performance.” (La. Civ. Code art. 1758(A)).
(b) Effects as to the Obligor—“An obligation may give the obligor the right to: (1) obtain the property discharge when he has performed in full; (2) contest the obligee’s actions when the obligation has been extinguished or modified by a legal cause.” (La. Civ. Code art. 1758(B)).

Question 2

Good Faith Requirement

Answer 2

b. Good Faith Requirement—“Contracts must be performed in good faith.” (La. Civ. Code art. 1983) What is meant by “good faith”?

Question 3

Heritability

Answer 3

c. Heritability—“Rights and obligations arising from a contract are heritable and assignable unless the law, the terms of the contract or its nature preclude such effects.”

Question 4

Effects as to Third Parties

Answer 4

Effects Against Third Parties—“Contracts may produce effects for third parties only when provided by law.” (La. Civ. Code art. 1985) Contracts may create effects as to third parties, such as in the case of third party beneficiary contracts, or contracts creating real rights in immovables that are filed for registry.