Obligations Flashcards
An alternative obligation is an obligation in which
an obligor is bound to perform only one of two or more items of performance. By default, the choice of which item to perform belongs to the obligor, unless the agreement grants it to the obligee. If one item of performance becomes impossible through no fault of the obligor, and the choice of which item belongs to the obligor, the obligor must render one of the remaining items. When the item of performance is susceptible to division, the obligation is a divisible obligation. When each item of performance is the object of a separate legal obligation, the obligation is conjunctive and the obligor must render performance for every item.
Fraud must be proved by what standard?
A preponderance of the evidence
A contract that is not required to be in writing, but that is valued at over $500, can be proved by
at least one witness and corroborating circumstances. Witness testimony alone is not sufficient. A contract not required to be in writing valued at $500 or less can be proved by competent evidence. When the law requires a contract to be in writing, it cannot be proved by witness testimony. The party demanding performance of an obligation bears the burden of proving the obligation exists.
Does the obligee’s consent to the transfer release the obligor from the obligation?
No. The original obligor remains solidarily bound with the assuming obligor.
A transfer of an immovable requires
either an act under private signature or an authentic act. It also can be effectuated by actual delivery of the land and an oath by the transferor recognizing the transfer. An oath recognizing the transfer without delivery is not sufficient.
An obligee’s consent to a transfer of the obligator’s obligation to another person . . .
does not release the obligor.
An obligation that may be extinguished by the transfer of a thing is extinguished only when
the thing has been validly transferred to the obligee of performance.
If an obligor is obligated to pay a sum of money, but disputes the obligation in part, the obligee must
accept payment of the undisputed part, if offered by the obligor. The parties can then resolve the dispute over the remaining payment.
An obligor
is the person who is bound to render the performance.
An obligee
is the person who is going to receive the performance
an obligation is
a legal relationship, whereby a person (the obligor) is bound to render performance in favor of another person (the obligee)
Natural obligations arise from
circumstances in which the law applies some moral duty to do something. A natural obligation is not legally enforceable, though some legal obligations might attach.
EXAMPLE: When a civil obligation has been extinguished by prescription or discharged in bankruptcy.
EXAMPLE: When an obligation is incurred by a person who lacks mental capacity.
If performance is freely rendered pursuant to a natural obligation
it cannot thereafter be reclaimed
A promise to pay a natural obligation can serve as
onerous cause
Are natural obligations enforceable by judicial action?
No.
Real Obligations
a duty incidental to a real right (a mortgage, for example)
It is transferred to the successor who acquires the thing to which the obligation is attached and needs no special provision to be transferred.
c. The successor is not personally bound, unless he assumes the personal obligations of the transferor with respect to that thing and may liberate himself from having the obligation by abandoning the thing
A strictly personal obligation is:
one that can be enforced only by the obligee or only against the obligor–it is not transferable
(1) An obligation for personal services is presumed to be strictly personal on the part of the obligor.
(2) If the performance of the obligation is intended for the benefit of the obligee exclusively, the obligation is considered to be strictly personal on the part of the obligee
An obligation is heritable when
its performance may be enforced by a successor of the obligee or against a successor of the obligor.
(1) It is transferable between living persons.
(2) Every obligation is deemed heritable to all parties, unless the contract terms or nature of the contract dictate otherwise
Conditional Obligations
an obligation subject to a condition; dependent upon an uncertain event
Suspensive conditions
When an obligation may not be enforced after an uncertain event occurs, the condition is suspensive.
A suspensive condition that is unlawful or impossible makes the obligation
null
A suspensive condition that depends solely on the whim of the obligor:
nullifies the entire obligation. WHIM is not the same as WILL (e.g., I’ll sell you my house if I move to Paris is ok–not exactly done on a whim)
Resolutory conditions
If an obligation may be immediately enforced, but will come to an end when the uncertain event occurs, it is resolutory.
resolutory condition that depends solely on the will of the obligor
must be fulfilled in good faith.
EXAMPLE: I’ll let you use my car until you pass the bar. Cannot intentionally fail the bar to keep the car.
If the condition is that an event must occur with a fixed period of time and that period of time elapses without the occurrence of the event
the condition is considered to have failed.
If no time was fixed for the occurrence of the event
the condition may be fulfilled within a reasonable time.
If the condition is that an event shall not occur within a fixed period of time, it is considered fulfilled once
that period of time elapses without the event having occurred
Fulfillment of a condition has effects retroactive to the beginning of the obligation, but does not impair
the rights acquired by third persons while the condition was pending
Obligations with a Term
The term may be express or implied by the nature of the contract
When is performance due, if the contract has no term
performance is due immediately
A term is presumed to benefit the obligor unless
the agreement or circumstances demonstrate that it was intended to benefit the obligee (or both parties).
A term is certain when
it is fixed
A term is uncertain when
it is not fixed but it can be determined by the intent of the parties or by the occurrence of a future and certain event.
If the term cannot be determined by the intent of the parties
then it is considered to be uncertain and the obligation must be performed in a reasonable period of time
Performance cannot be demanded before the term ends. If an obligor performs voluntarily before the term ends, he may
not recover the performance
If the term is not marked by a specific date but is a period of time, the term begins to run
on the day after the contract is made or the day after the occurrence of the event that marks the beginning of the term. The term includes the last day of the period.
When multiple obligors owe a separate performance to one obligee
the obligation is several for the obligors.
When one obligor owes a separate performance to multiple obligees, the obligation is
several for the obligees.
When multiple obligors owe one performance to an obligee but none are bound for the whole performance, the obligation is
is joint for the obligors.
When one obligor owes just one performance intended for the common benefit of multiple obligees, none of whom is entitled to the whole performance, the obligation is
joint for the obligees.
Solidary obligations are
not presumed; they arise from a clear expression of the parties or operation of law.
An obligation may be solidary even if
it derives from a different source for each obligor and even if it is subject to a condition or term for one or more obligors
An obligation is solidary for the obligees if
each obligee has the right to demand the entire performance from the common obligor.
Before a solidary obligee brings an action for specific performance, the obligor may
extinguish the obligation by rendering performance for any of the solidary obligees.
obligation is solidary for the obligors when
each obligor is liable for the entire performance.
A performance rendered by one of the solidary obligors
relieves the other obligors of liability to the obligees.
An obligee may demand
the whole performance from any of the solidary obligors.
May a solidary obligor request division of the debt?
No.
Prescription against one solidary obligor
affects all other obligations equally
Renunciation of solidarity by the obligee in favor of an obligor must be
express. If partial performance is received from an obligor, the obligee maintains the obligation against all obligors, minus deduction of the partial performance.
Remission of debt by the obligee in favor of an obligor benefits the other solidary obligors in the amount
of that portion of that obligor. If the obligee surrenders to one solidary obligor the instrument of the obligation, there is a presumption that the remission of debt was intended to benefit all solidary obligors.
A solidary obligor may raise defenses that arise from the nature of the obligation, that are personal to him, or are common to all solidary obligors, but not:
defenses that are personal to other obligators
Each solidary obligor is liable for
his virile portion. If the obligation arose from a contract, virile portions are equal unless otherwise provided.
a loss arising from the insolvency of a solidary obligor
With respect to the obligee, there is very little effect (can still get full performance from the other part(ies)); but, with respect to obligator to obligator, the other obligators absorb the debt
An obligation is conjunctive when:
it binds an obligator to multiple items of peformance, which may be separately rendered or enforced (for example, making rent payments each month; each month is its own obligation)
Each item is considered to be the object of a separate obligation.
(a) The parties may provide that failure of the obligor to perform one or more items shall allow the obligee to demand immediate performance of all remaining items.
An obligation is alterative if
the obligator is bound to render obnly one of two or more items of performance (I’ll either lend you my car, or pay for a cab)
(2) The choice of item to be performed belongs to the obligor, unless expressly or impliedly granted to the obligee.
(3) If the choice belongs to the obligor and one item of performance becomes impossible or unlawful (even though through no fault of the obligor), he must render one of the items that remain.
(4) If all items of performance become impossible or unlawful, not through the faults of the obligor that makes it impossible, and the obligation becomes extinguished
An obligation is divisible if
the object of the performance can be divided
A divisible obligation must be divided among
successors of the obligor or obligee. Each successor is liable for or entitled to only his share of the divisible obligation.
An obligation is indivisible when
you cannot divide it (mortgage)
An indivisible obligation may not be divided among the successors of the obligor or obligee. The successors are subject to the rules of solidary obligation.
May an obligor and a third person agree that the third person will assume the obligation of the obligor?
Yes.
For the obligee to enforce the agreement against the assuming obligor
the agreement must be in writing.
The obligee’s consent to the assumption
doesn’t matter.
The original obligor remains
solidarily bound with the assuming obligor
The assuming obligor is bound only
to the extent of his assumption
The assuming obligor may raise any defense based on
the contract by which the assumption was made
May an obligee and a third person agree that the third person will assume the obligation owed to the obligee?
Yes. The agreement must be in writing to be enforceable by any party.
An assuming obligor may not raise against the obligee any defense
a defense that is personal to someone other than the previous obligee
The assuming obligor may raise any defense based on
any defense based upon the original contract between A and B; any defense based on C’s relationship agreement with A, or any defenses personal to himself
Subrogation is
an agreement between the obligee and the assuming obligor; this must be in writing
Example: A gives B money; C assumes the obligation to pay back A, agreeing with B to do so.
subrogation results from a person’s performance of the obligation of another
that obligation continues to exist in favor of the person who performed it (who may avail himself of the action of the original obligee against the obligor) but is extinguished for the original obligee.
An obligor who borrows to pay a debt may subrogate the lender to the rights of the obligee
The agreement must be in writing, stating that the express purpose of the loan is to pay the debt.
Subrogation by operation of law occurs
a. In favor of an obligee who pays another obligee whose right is preferred because of a privilege, pledge, mortgage, or security interest;
b. In favor of a purchaser of property who uses the purchase money to pay creditors holding any privilege, pledge, mortgage, or security interest on the property;
c. In favor of an obligor who pays a debt he owes with or for others and who has recourse against them as a result of the payment;
d. In favor of a successor who pays estate debts with his own funds;
e. in other cases provided by law
The party who demands performance of an obligation must prove
the existence of the obligation
A party who asserts the obligation is null, modified, or extinguished must prove
the facts giving rise to the nullification, modification, or extinction.
If the law requires the contract to be in written forms, it may not be proved by testimony, unless
the written instrument was lost, stolen, or destroyed.
If a writing is not required by law, a contract not reduced to writing for a value not in excess of
$500 may be proved by competent evidence.
If the value is in excess of $500, the contract must be proved by
at least one witness and other corroborating evidence
An act under private signature need not be written by the parties but must
be signed by them
An act under private signature is prima facie evidence of
the act of the party executing it if his signature has been acknowledged, and needs no further proof to be admitted into evidence
A party against whom an act under private signature is asserted must
acknowledge his signature or deny that it is his. If he denies the signature, any means of proof may be used to show that it is his signature.
A transfer of immovable property must be made by
authentic act or act under private signature.
However, an oral transfer is valid when the property is actually delivered and then transferor recognizes the transfer under oath.
An act under private signature may be acknowledged by a party if
the party recognizes the signature as his own before a court or notary public, in the presence of two witnesses, or in any other manner provided by law.
An authentic act is
(notarial act) two parties go before a notary public and two witnesses and they sign a contract
An authentic act is full proof of the agreement, as against parties, heirs, and successors.
Confirmation is
an act that fixes relative nullaties; the effects of confirmation are retroactive
An express act of ratification must evidence
the intent to be bound by the ratified obligation
Tacit ratification occurs when
a person with knowledge of an obligation incurred on his behalf by another person, accepts the benefit of that obligation.
Performance must be rendered to the obligee or his designee. Performance rendered to an unauthorized person is valid if
the obligee ratifies it. If the obligee does not ratify it, it is valid if the obligee derived a benefit from it, but only for the amount of the benefit
An obligee may refuse to accept partial performance. However, if
the amount of an obligation to pay money is partially in dispute, and the obligor is willing to pay the undisputed portion, the obligee may not refuse to accept it.
An obligor who owes several debts to an obligee has the right to
impute payment to the debt he intends to pay.
When the object of the performance is the delivery of a thing or sum of money and the obligee fails to accept performance tendered by the obligor, the tender, followed by deposit to the court, produces the effects of
performance from the time the tender was made, if declared valid by the court.
A fortuitous event is
something not in contemplation of the parties when the contract was made – it cannot reasonably be foreseen
obligor is not liable for failure to perform when the failure is caused by a fortuitous event that makes performance impossible, unless:
a. he has assumed the risk of such an event; or
b. if the fortuitous event was preceded by his fault and would not have occurred without that fault.
An obligor who is in default at the time a fortuitous event makes performance impossible is not liable for failure to perform if
the fortuitous event would have destroyed the object of performance in the hands of the obligee had performance been timely rendered.
If the performance is impossible in part, because of a fortuitous event:
the court can either dissolve the contract or reduce the other party’s obligation (e.g., the house sold is only partly destroyed, the buyer just might have to pay less).
Novation
extinguishing some existing obligation and substituting a new one in its place
Intention to extinguish must be
clear and will not be presumed
Objective Novation occurs when
the parties agree to substitute a new performance for that previously owed or when the parties expressly declare an intention to novate
Subjective Novation takes place when
a new obligor is substituted for a prior obligor, who is discharged
An express or tacit remission of debt by an obligee
extinguishes the obligation.
A remission of debt is effective when
the obligor receives the communication from the obligee
Acceptance is presumed, unless
rejected within a reasonable time
Suretyship (remission)
if the bank remits the principle obligator, the sureties are also released. But, if the surities are remitted, the principle obligator is still on the hook. If only one surety is remitted, the others are still obligated to pay, less the remitted surety’s virile share
Compensation takes place
by operation of law when two persons owe sums of money or quantities of fungible things identical in kind, and those sums or quantities are liquidated and presently due
Compensation extinguishes
both obligations to the extent of the lesser amount.
The obligation is extinguished by confusion when
merger – one party cannot be both obligator and obligee
