Sales Flashcards
Warranty against Redhibition: Remedies
buyer entitled to rescind sale for breach
entitled to refund of purchase price and reasonable expenses (NO damages/attorney’s fees)
*however, buyer must give good faith seller opportunity to correct defect before seeking remission of the sale
Warranty against Redhibition
implied in every sale
protects buyer from:
(1) hidden defects in the thing:
(2) present at the time of delivery
(3) that qualify as redhibitory
Types of Redhibitory Defects
(1) defect that renders the thing either absolutely useless or so inconvenient to use that it must be supposed that the buyer would not have bought the thing had he known of the defect
Remedy –> rescission of the sale and damages and attorneys’ fees
(2) defect that diminishes the usefulness or value of the thing such that it must be supposed that the buyer would have paid a lesser price
Remedy –> quanti minoris
Quanti minoris
reduction of the price
remedy for the type of redhibitory defect that diminishes the usefulness or value of the thing such that it must be supposed that the buyer would have paid a lesser price
Hidden Defect
one that would likely not be discovered upon reasonably prudent inspection
Presence of Redhibitory Defect Upon Delivery
burden on buyer to prove
Waiver of Warranty against Redhibitory Defects
(1) must be clear and unambiguous (as is is likely not good enough)
(2) must be brought to buyer’s attention
IMPORTANT: waiver is ineffective against a seller who declared that a thing had a quality that seller knew it did not have
Liberative Prescription for Redhibitory Defects: Good Faith Sellers
the shorter of:
(i) 2 years from the date of perfection of the sale
(ii) 1 year from the date the buyer discovered the defect
Liberative Prescription for Redhibitory Defects: Bad Faith Sellers
bad faith = had knowledge of the defect
the shorter of:
(i) 10 years from the date of perfection of the sale
(ii) 1 year from the date the buyer discovered the defect
Warranty of Fitness
seller warrants that the thing sold is reasonably fit for its ordinary use
governed by the rules of contract
limited to ordinary uses, unless (extended to uses beyond ordinary when):
(i) buyer has some particular use in mind for the thing,
(ii) seller knows or should know the buyer’s particular purpose, and
(iii) the seller knows or should know that the buyer is relying on the seller’s skill and judgement in selecting the thing
Warranty of Fitness: Remedies
damages for the amount of loss sustained by the breach
Liberative Prescription of Breach of Warranty of Fitness
the shorter of:
(i) 2 years from the date the thing was delivered, or
(ii) 1 year from the date the buyer discovered the unfitness
Contract to Sell
bilateral agreement where the parties promisee to enter into a sale at a later date
MUST fulfill all requirements for a sale
Sale: Requirements
(1) object
(2) price
(3) consent of the parties
Contract to Sell: Earnest Money
money given by buyer to seller to secure the parties’ interests in the event of breach
must be EXPRESSLY stipulated
precludes possibility of seeking specific performance and damages (functions as stipulated damages)
Contract to Sell: Earnest Money Effects on Breach
if buyer recedes from contract: buyer forfeits earnest money
if seller recedes from contract, seller must pay the earnest money given to the buyer plus the same amount
if either party’s failure to perform is excused, earnest money is not owed
Sale of an Immovable: Prescription of Action for Failure to Perform
5 years
Warranty against Eviction
seller warrants the buyer against eviction (the buyer’s loss of or danger of losing the hole or part of a thing sold because a third person’s right existed in the thing at the time of sale)
Warranty against Eviction: Servitudes
warranty against eviction extends to undeclared, nonapparent conventional servitudes
does NOT extend to natural or legal servitudes
Warranty Against Eviction: Waiver/Modification by Warranty Sale
parties do not address the matter of the warrant or they state that the sale is a “warranty sale”
Remedies for buyer:
- restitution of the price
- restitution of fruits if buyer has to pay them to the owner who evicts him
- all costs incurred by the lawsuit concerning the warranty/eviction
- damages –> BUT only if the buyer did not know about danger of eviction
- improvements (all improvements if bad faith seller, only “useful improvements” if good faith seller
Warranty against Eviction: Waiver/Modification by Non-Warranty Sale
seller renounces the warranty
Remedies for buyer:
- restitution of the price –> BUT only if buyer did not know about danger of eviction
Warranty against Eviction: Waiver/Modification by Buyer’s Peril and Risk
non warranty sale +
(1) buyer was aware at the time of the sale the danger of eviction, or
(2) regardless of the buyer’s knowledge, the buyer declared that he was buying the property at his peril and risk, or
(3) the seller’s obligation of returning the price of the property has been expressly excluded
Remedies for buyer: nothing
Warranty against Eviction: Quitclaim Deed
assignment of any rights the transferor has in the thing to the transferee without warranting the existence of those rights
Remedies for buyer: nothing
Warranty against Eviction: Partial Eviction
buyer is entitled to proportionate reduction in price
if buyer’s principal cause was to get the part on which the eviction occurred, buyer could get complete rescission of sale
Right of First Refusal
unilateral contract in which one party agrees that she will not sell a certain thing without first offering it to a certain person
may be enforced by specific performance
need not contain a term
need not contain a price
immovable must be in writing and cannot extend past 10 years
Sale on View or Trial
buyer retains the right to test the goods
sale is not perfected until the goods have been checked
Sale on a Suspensive Condition
title does not transfer (sale is not perfected) until the condition is fulfilled
Sale on a Suspensive Condition
title does not transfer until the condition has been fulfilled
Types of Warranties
(1) warranty against redhibition
(2) warranty against eviction
(3) warranty of fitness
Option Contract
an option contract is a contract where a party gives another the right to accept an offer to sell a thing within a stipulated time
Option Contract: Requirements
(1) thing
(2) price
(3) correct form (immovables = writing)
(4) term (but can be tied to another contract with a definite term, but no longer than 10 years for an immovable UNLESS tied to a contract that gives rise to obligations of continuous and periodic performance, ie a lease)
Lesion Beyond Moiety
the sale of an immovable may be rescinded by the seller for lesion when the price is less than 1/2 the fair market value of the immovable, the value being evaluated at the time the contract was entered into
