Good Bilbe Obligations Outline 100
Transcript of Good Bilbe Obligations Outline 100
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Obligations in General
I. General Principles
A. Obligations: Law dealing with propriety rights in personam
B. CC 1756 Obligations; defined
1. Legal relationship whereby obligor (debtor) bound to render
performance in favor of obligee (creditor)
2. Basis for legal remedies if obligation not performed
C. CC 1757 Sources of Obligations
1. rom contracts and other declarations of wills
2. !irectly from the law" regardless of declaration of will
a) #rongful acts
b) $anagement of affairs of another
c) %n&ust enrichment
. CC 175! General "ffects#$ig%ts of t%e Parties
1. Obligee
a) 'ight to enforceperformanceobligor bound to
b) 'ight to recover damagesfor obligors failure to perform
or for defective or delayed performance
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2. Obligor
a) 'ight to obtain proper dischargewhen performed in full
b) 'ight to contest obligees actions when obligation isetinguished or modified by legal actions
". CC 175& Good 'ait%
1. Obligor and Obligee must follow these principles in eecuting
obligations
a) *onest in belief and purpose
b) aithfulness to ones obligation
c) +bsence of intent to defraud
II. Gratuitous Obligations
A. CC 176( )oral uties t%at *a+ gi,e rise to natural obligations
1. ,atural obligation eists where there is a moral" but not
enforceable" duty to performB. CC 1761 "ffects of -atural Obligations
1. Cannot be enforced by judicial act: Obligee cannot compel
performance- Obligor not bound to perform
2. Cannot reclaim Freely Rendered Performance: ven if obligor
not aware that obligation was natural obligation
a) reely 'endered/ acted without compulsion
0. ontract for natural obligation is onerous: ,ew promise to
perform is fully enforceable obligation
a) CC 1&(& Onerous Contract: 'eason that parties bind
themselves is to obtain advantage in return
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b) romise must be epress: 3clear" distinct" une4uivocal
recognition and renewal of debt as binding obligation5
c) 6f natural obligation is prescribed debt" new promise must
be in writing
7. 8 if person pays debt that has epired cannot later reclaim
that payment
C. CC 176 Situations /%ere -atural Obligations Arise
1. ivil obligation has been discharged by prescription or in
ban9ruptcy
a) $ust loo9 at intent if purely gratuitous" must be in
authentic form
2. #hen obligation has been incurred by person who although
endowed w8 discernment" lac9s legal capacity
a) 8 1; yr fully capable of entering into obligation but not
legally bound for lac9 of capacity
0. #hen universal successors are not bound by civil obligation toeecute donations and other dispositions made by deceased which are
null for want of form
a) 6f will of deceased parent leaves certain sum to friend
and remainder to only son but lac9s formalities" son not
re4uired to pay sum to friend but under natural obligation
could.
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7. 'ecognition of obligation made by either 1) performing
obligation or 2) promising to perform it
>. ulfillment must not impair public order
". $e0uire*ents for -atural Obligation to beco*e Ci,il Obligation
1. erforming obligation out of own free will- can no longer
reclaim
2. ?ive obligee promise that performance will be made- obligee
can enforce promise
Con,entional Obligations Contracts2
I. General Principles
A. CC 1&(6 efinition of Contract
0. +greement by 2@ parties where obligations are created"
modified" or etinguished
7. ?enerally" intentto incur legal conse4uences is enough.
Donationsre4uire certain formalities
5. $e0uire*ents for 3alid Contract
a) apacity
b) onsent (offer and acceptance)
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c) Lawful cause (reason why party obligates himself)
d) Lawful ob&ect (sub&ect matter of contract)
'. =hird arty Beneficiary
1. General $ule4 erson cannot assert claim for nonperformance unless
party to contract
a) "ception40rd party Beneficiary can enforce contract in some
situations without being party
. CC 1&7! Stipulation for t%ird part+
a) ontracting party may stipulate a benefit for 0rd person called 0rd
party beneficiary
b) Once 0rd party has manifested intention to avail himself of benefit"
parties may not dissolve contract by mutual consent without beneficiarys
agreement
c) Aomment b Beneficiarys intent may be implied
G. ffects of onventional Obligations
1. ?eneral ffects
a) CC 1&!a/ for parties; perfor*ance in good fait%
(1) ontracts have effect of law for parties and may be
dissolved only through consent of parties or on grounds provided
by law
(2) ontracts must be performed ingood faith
2 CC 175& Good 'ait%
(a) ?ood faithshallgovern conduct of obligor and
obligee in whatever pertains to obligation
b) CC 1&!8 $ig%ts and obligations /ill pass to successors
(1) 'ights and obligations arising from a contract are heritable
and assignable unless law" terms of contract or its nature precludes
such effects
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(2) Aomment b 6ncludes universal heirs" universal legatees
and legatees by universal title
2. $easure of damages
(1) !amages are measured by loss sustained by obligee and
profit of which he has been deprived
(2) ut in position had both parties performed6
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b) 1DDF Obligor in good faith
(1) Obligor in good faith is liable only for damages that were
foreseeable at time contract was made
c) 1DD; Obligor in bad faith
(1) Obligor in bad faith is liable for all damages" foreseeable or
not" that are direct conse4uence of his failure to perform
(2) Aomment b Obligor is in bad faith if he intentionally and
maliciously fails to perform his obligation
d) 1DDE !amages for nonpecuniary loss
(1) !amages for nonpecuniary loss may be recovered when
contract" because of its nature" is intended to gratify nonpecuniary
interest and" because of circumstances surrounding formation or
nonperformance of contract" obligor 9new" or should have 9nown"
that his failure to perform would cause that 9ind of loss
(2) 'egardless of nature of contract" these damages may be
recovered also when obligor intended" through his failure" to
aggrieve feelings of obligee
(0) Aomment c ontract for gratification of nonpecuniary
interest/ intended to satisfy interest of spiritual order. 8 create
wor9 of art" contract to conduct scientific research" contract
involving matters of sentimental value
(7) Aomment d #orry or veation not compensable non
pecuniary loss
(>) ut C value on things which do not have C e4uivalent
e) CC ((( a*ages for dela+ *easured b+ interest; no need of
proof; attorne+ fees
(1) #hen ob&ect of performance is sum of C" damages for delay
in performance are measured by interest on that sum from time it is
due" at rate agreed by parties or by law.
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(2) Obligee may recover these damages without having to
prove any loss" and whatever loss he may have suffered he can
recover no more.
(0) 6f parties" by written contract" have epressly agreed thatobligor shall also be liable for obligees attorney fees in fied or
determinable amount" obligee is entitled to that amount as well
f) 2II7 lause that ecludes or limits liability
(1) +ny clause is null that" in advance" ecludes or limits
liability of one party for intentional or gross fault that causes
damage to other party
(2) +ny clause is null that" in advance" ecludes or limits
liability of one party for causing physical in&ury
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(1) arties may epressly agree that contract shall be dissolved
for failure to perform particular obligation. 6n that case" contract is
deemed dissolved at time it provides for or" in absence of such
provision" at time obligee gives notice to obligor that he avails
himself of dissolution clause
II. 9inds of Contracts
:. 1DI; %nilateral contract
1. 6f only 1 party to contract incurs obligation and other party does
not assume reciprocal obligation
I. 1DIE Bilateral or synallagmatic contracts
1. 6f both parties to contract bind themselves reciprocally so that
obligation of each party is correlative to obligation of other
2. 'e4uirements
a) Both parties must have incurred obligations
b) 'eason why each party bound himself was to receive
performance promised by other party
0. "ffect: ach party is both obligor and obligee
. CC 1&(& Onerous Contract
1. ach of parties obtains advantage in echange for obligation
2. 3'eason why parties bind themselves is to obtain advantage in
return5
0. "ffect: 6f !onation not enforceable because of lac9 of form"
may be enforced as Onerous ontract
7. Thielman v. Gahlman ! promised that he would give
property to him at his death if cared for him in his final years. !eed
drawn conveying property for C1.
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a) ,ot valid donation b8c lac9ed authentic form
b) ,ot valid sale b8c C1 insufficient amount for property
c) $ule4 6f there is valid eisting cause can be enforcedwithout fitting into certain category of contracts
(1) ! relin4uished property for care until end of life-
gave his time8services for property at death of !
(2) 1D1> 6nnominate ontracts: have no special
designation under ode
9. CC 1&1( Gratuitous Contract
1. One party obligates himself towards another for benefit of
another" without obtaining any advantage in return
2. 3'eason why obligor bound himself was to benefit obligee or
some other person5
0. Be/are: !etermine whether it is gratuitous contract or onerous
contract without cause
. 1D10 rincipal8+ccessory ontracts
1. rincipal ontract obligation secured by accessory contract
2. +ccessory ontract provides security for performance of
another obligation
). CC 1&18 -o*inate#Inno*inate Contracts
1. ,ominate ontracts have special designation
2. 6nnominate ontracts have no special designation
-. 1D11 ommutative ontracts
1. erformance of obligation of each party is correlative to
performance to other
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2. Aomment b !istinct from bilateral contract which has
correlative obligations. ommutative contracts have correlative
performances
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c) omment (b): offeror who specifies time for acceptance which is
too long under circumstances is not bound beyond reasonable time
. CC 1&& "piration of irre,ocable offer for lac> of acceptance
a) 6rrevocable offer epires if not accepted within time prescribed
0. 1D0I 'evocable offer
a) Offer which is not irrevocable under 1D2E may be revo9ed
before it is accepted
b) omment (b): strong fact situation is necessary to imply that offer
is irrevocable for any substantial length of time
7. 1D01 piration of revocable offer
a) 'evocable offer epires if not accepted within reasonable time
>. 1D02 piration of offer by death or incapacity of either party
a) Offer epires by death or incapacity of offeror or offeree before it
has been accepted
. Acceptance
1. CC 1&8 ?i*e /%en acceptance of irre,ocable offer is effecti,e
a) +cceptance of irrevocable offer is effective when received by
offeror
b) omment (b): within time named in offer or within reasonable
time
2. 1D0> =ime when acceptance of revocable offer is effective
a) %nless otherwise specified by offer or law" acceptance of
revocable offer made in manner and by medium suggested by offer or in
reasonable manner and by reasonable medium is effective whentransmitted by offeree
b) omment (b): Jmailbo ruleJ8rule of acceptance on dispatch gives
protection to offeree by allowing him to rely upon contract being formed
when he transmits acceptance
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c) omment (c): effective transmission is to be determined by courts
based on business practices. +ct of entrusting communication of
acceptance to employee of offeree would not constitute transmission until
communication is actually posted
d) Burden of stating particular method of communication is upon
offeror
0. 1D0F 'easonableness of manner and medium of acceptance
a) $edium or manner of acceptance is reasonable if it is one used in
ma9ing offer or one customary in similar transactions at time and place
offer is received unless circumstances 9nown to offeree indicate otherwise
7. 1D0D +cceptance by performance
a) #hen offeror invites offeree to accept by performance and
according to usage or nature or terms of contract" it is contemplated that
performance will be completed if commenced" contract formed when
offeree begins reuested performance
>. 1D7I +cceptance only by completed performance
a) #hen according to usage or nature of contract or its own terms
offer made to particular offeree can be accepted only by rendering
completed performance offeror cannot revo!e offer once offeree has
begun to perform for reasonable time necessary to complete performance.
Offeree not bound to complete performance he has begun.
b) OfferorKs duty of performance is conditional on completion or
tender of re4uested performance
F. 1D71 ,otice of commencement of performance
a) #hen commencement of performance either constitutes
acceptance or ma9es offer irrevocable offeree mustgive prompt notice of
commencementunless offeror !nows or should !nowthat offeree hasbegun to perform.
b) Offeree who fails to give notice is liable for damages
;. 1D72 +cceptance by silence
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a) #hen because of special circumstances offereeKs silence leads
offeror reasonably to believethat contract has been formed" offer is
deemed accepted
E. 1D70 +cceptance not in accordance with offer
a) !eemed to be a counteroffer
". $e,ocation
1. 1D0; =ime when revocation is effective
a) #hen received by offeree prior to acceptance
2. 1D0E 'eception of revocation" re&ection" or acceptance
a) #ritten revocation" re&ection" or acceptance is received when it
comes into possession of addressee or of person authoried to receive it or
when deposited in place addressee has indicated as place for this or similar
communications to be deposited
b) *ow is this in accord with 1D0> +cceptance effective when
transmitted by offeree
c) omment (b): adopts the Jreception theoryJ
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2. 'ecovery may be limited to epenses incurred or damages
suffered as result of reliance
0. Aomment a: ause is defined by 3reason5 rather than
3motive5 to enhance importance of &udicial discretion in
characteriing obligation as enforceable. #hat was the inducing
factorM
a) 'eason is more objective- motive is moresubjective
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E. "ebert v. #cGuire !r tries to collect on unpaid bill. under
belief that !r office was ta9ing care of insurance claim. laim never
filed" insurance refuses to pay. !r office cannot collect amount from
patient
a) nforceable as ?ratuitous ontract: ause was benefit of
filing insurance claim for patient
b) nforceable w8 !etrimental reliance: atient relied to
detriment (insurance wouldnt cover claim) which reasonably
&ustified in believing
D. $dinburgh v. $dinburgh $arried couple agreed to fi up and
pay mortgage on owners house in return that owner promised to
leave house to them in will.
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11. #artin v. 'chlunt( rented out property to ! at reduced rate
believing that would remain for etended amount of time.
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(>) Ob&ect can be lawful while cause (reason) is
unlawful
a) CC (( Absolute nullit+ of contracts
(F) Niolates rule of public order illicit or immoral
(;) $ay be invo9ed by party or court
b) CC ( "ffects of @nla/ful Cause
(1) ontract deemed never to have eisted- arties
must be restored to position before contract was made
(2) erformance under contract which is null becausecause is unlawfulmay not be recovered by party who
!new or should have !nown of defect. erformance may
be recovered when party invo9es nullity to withdraw
before purpose is achievedand in eceptional
circumstances allowed by court that wouldfurther
justice.
(0) Aomment c 6f performance rendered under null
contract" other party may 9eep that performance
(7) Aomment g arty who has performed under null
contract w8 9nowledge of defect may recover if denial
would led to result against public policy
c) CC &! Actions of pa+*ent for ga*ing debts and
bets
(1) Law grants no action for payment of what has beenwon at gaming or by bet" ecept games promoting use of
arms" gun and foot" and horse and chariot.
d) CC &!8 Actions for reco,er+ of pa+*ents *ade on
ga*ing debts and bets
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(1) 6f the law refuses action to winner to recover" law
also refuses to allow loser to reclaim what he has
voluntarily paid
e) *amy v. +ill loaned C to ! for purpose of ! to be able
to gamble. attempts to recover debt owed.
(1) annot recover debt because cause was unlawful
(gaming debt). annot be treated as transaction separate
from gaming
(2) 6nnocent party not involved in gaming may be
allowed to recover
f) *auer v. Catalanotto gave ! C to gamble in Las
Negas- agreed they would share profits" losses.
(1) nforceability of contract based on La law- since
gaming not legal cause in La cannot recover debt
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(2) %nlawful cause by one party un9nown to other
cannot be basis to nullify contract. Other party still able
to collect
g) TeleRecovery v. #ajor ! issued ,
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". 'ailure of Cause
1. ause may eist at inception and then fail
2. 8 ircumstances change by time of actual transaction andob&ect not what thought to be or unavailable
0. Carpenter v. +illiams ! purchased house to be closer to wor9-
then wor9 no longer needed him to move
a) ause to purchase was to be closer to wor9. +t time of
contract" ob&ect of cause no longer available
7. *osecco v. Gregory contracted to buy oranges over period of
time. %nprecedented freee 9illed entire grove of orange trees- unable
to produce oranges
a)
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2. CC 186! onations Inter 3i,os donation inter vivos(b8w
living persons) is act by which donor divests himself" at present and
irrevocably" of thing given" in favor of donee who accepts it
a) $e0uire*ent of 'or*
12 CC 156 onation of i**o,ables or
incorporeals for* re0uired
(a) +ct shall be passed before notary publicand
2 witnesses of every donation inter vivosof
immovable property or incorporeal things" such as
rents" credits" rights or actions" under penalty of
nullity
2 CC 157 onation of *o,ables for* re0uired
(a) !onation inter vivos" even of movable
effects will not be valid" unless act be passed of
same" as is before prescribed
(0) 'panier v. Doe $other sold daughter property for
C>- real cause was love and affection
(a) ould not be valid sale b8c C> insignificant
purchase price
(b) ?ratuitous transfer re4uires authentic form
(7) "ceptions:
(a) CC 15& )anual Gift actual delivery of
corporeal movabledoes not re4uire authentic form(b) 1(4 (1 -egotiable Instru*ents e8
promissory notes do not re4uire authentic form to
transfer
b) !onative 6ntent
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(1) ause: !onors intention to benefit donee by way
of liberality
(2) $ust show by clear and convincing proof that
donor had intent to irrevocably divest himself of thing
and delivery was made
c) 9inds of onations Inter 3i,os
(1) urely ?ratuitous : traditional donation- made out
of 9indness
(2) Onerous : donated but with charges on donee
(a) CC 158,ot valid if value of ob&ect given
does not manifestly eceed charges imposed on
donee
(b) CC 156 6n order for rules of donations to
apply value of ob&ect given must eceed charges
by
(0) 'emunerative : ob&ect of donation is for services
previously rendered
(a) CC 155 ,ot valid value of services to be
recompensed should be little inferior to that of the
gift
(b) CC 156 6n order for rules of donations to
apply value of ob&ect given must eceed services
by
(7) 'uccession of *awrence Lawrence epressed to
nephew intention to donate C in their &oint ban9 account.
,ephew provided services to Lawrence for 0> yrs
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(a) Onerous !onation: nephew burdened w8
charges- value of C to be donated didnt eceed
value of services
(b) ormality rules not re4uired
d) 1>2; harges or conditions imposed by donor
(1) !onor may impose on donee any charges or
conditions he pleases if they are not contrary to law or
public policy
e) CC 15! onation of future propert+ nullit+
(1) !onation inter vivos only involves present
property of donor. 6f it comprehends property to come it
shall be null
f) CC 158( onations effecti,e fro* date of acceptance
(1) !onation inter vivos shall be binding on donor and
shall produce effect only from day of acceptancein
precise terms
(2) +cceptance may be made during lifetime of donor
by posterior and authentic act" shall have effect only from
day of being notified of act establishing acceptance
g) CC 1581 Corporeal possession in lieu of acceptance
(1) 6f donee has been put by donor into corporeal
possessionof effects given" donation" though not in
epress terms has full effect(2) "ception to CC 158(which ma9es donation
effective on day of acceptance- and that acceptance be in
authentic form
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(0) 8 !onor signed document transferring house to
donee. !onee didnt accept in authentic form but moved
into house. an give effect to this donation.
h) $e,ocation of onations Inter 3i,os
12 CC 155& Causes for re,ocation or dissolution
(a) 6ngratitude of donee
(b) ,onfulfillment of eventual conditions
which suspend consummation
(c) ,onperformance of conditions imposed on
donee
(d) Legal or conventional return
2 CC 156( $e,ocation for ingratitude
(a) !onee has attempted to ta9e life of donor
(b) !onee guilty of cruel treatments" crime" or
grievous in&uries toward donor
(c) !onee refused donor food when in distress
(0) Perry v. Perry ather gave son company stoc9-
ompany later agreed to buy it bac9 to help son pay for
school. ompany became unable to ma9e payments- son
had father property seied
(a) 1>FI ?rievous in&uries includes seiure
of donor property instituted by donee
. Ot%er Gratuitous Contracts
a) General Principles
(1) !o not re4uire authentic form
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(2) !onor is not re4uired to get anything in return
b) oan
(1) 2ED1 Loan for use: ?ratuitous contract bywhich lender delivers nonconsumable thing to borrower
for him to use and return
(a) 8 Let another farmer use tractor
(b) an incur conse4uences for brea9ing
promise
(c) Ob&ect ceases to belong to donor for only
short time
(2) 2DI7 Loan for consumption: Lender delivers
consumable things to borrower who binds himself to
return to lender e4ual amount of things of same 9ind and
4uality
c) eposit
(1) 2D2F !eposit: !epositor delivers movablething to depositary for safe9eeping under obligation of
returning it to depositor upon demand
(2) 8 +llow to 9eep froen food in freeer- fail to
9eep generator running $ay be re4uired to pay cost
d) )andate
(1) 2DED $andate: rincipal confers authority on
mandatary to transact one or more affairs for principal
(2) 8 Bilbe agrees to conduct business for neighbor
when he goes to town. Bilbe does not- failure costs
neighbor C Bilbe sub&ect to conse4uences
B. In,alid onation but 3alid Onerous Contract27
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1. CC 1&18 Inno*inate Contract no special designation
a) Thielman v. Gahlman ! promised that he would give
property to him at his death if cared for him in his final years.
!eed drawn conveying property for C1.
(1) ,ot valid donation b8c lac9ed authentic form
(2) ,ot valid sale b8c C1 insufficient amount for
property
(0) $ule4 6f there is valid eisting cause can be
enforced without fitting into certain category of contracts
(7) Onerous ontract b8c each received advantages: !
relin4uished property for care until end of life- gave his
time8services for property at death of !
(>) 1D1> 6nnominate ontracts: have no special
designation under ode
. C%aritable Subscriptions
a) "ceptionto general rule that donation needs form
b) nforceable as matter of public policy
c) Nalid onerous contract (cause/ intent to confer benefit)
d) *ouisiana College v. %eller ! agreed to pay C if Leg
allowed school to be built. ! then refused to do so
(1) Nalid ause be benefactor- promote education
(2) romise was not in authentic form but enforced as
onerous contract
(a) ! pays C- receives college in hometown
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e) &aptist "ospital v. Cappel ! began payments for bldg
of nursing school- stopped payments when school built on
alternative location
(1) General $ule: 'elying on gratuitous promise is
unreasonable
(2) "ception: haritable institutions can rely on
gratuitous promise
. CC 1!87 ebt of anot%er rd person and debt etinguis%ed
b+ prescription
a) arol (oral) evidence inadmissible to establish eitherpromise to pay debt of 0rd person or promise to pay debt
etinguished by prescription
b) Flood v. Thomas ! promised to pay anothers debt due
to .
(1) !ebt of another is sufficient consideration to
support contract of surety or promise to pay it
(2) $ust be in writing
7.
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3I. Appl+ing t%e ?%eor+ of Cause
A. -atural Obligations
1. erformance or romise to perform natural obligationcreatesonerous contract
a) ause: ,atural obligation
b) 6f type where form re4uired" must meet formalities to be
valid
2. !ebtor must clearly show intention to bind himselfto fulfill
natural obligation
0. Does not reuire epress acceptancesince no return promise is
epected of onerous contract
7. Thomas v. &ryant no longer had C to 9eep son in hospital- !
agrees to put up C if willing to repay costs. Both cosigned on
promissory note
a) ! clearly intended to fulfill natural &ustice
b) Onerous ontract w8 natural obligation as cause
c) ,ot gratuitous
(1) romise made collectively to care for son
(2) !etrimental 'eliance father relied on promise of
! to pay epenses
>. +ortmann v. French *usband transferred to former wife house
worth C7">II for only C1I b8c he had breached marriage fidelity.
=ransaction b8w husband and wife as recompense for debt owed or
harm done
a) *usband felt natural obligation to repay wife for his
infidelity
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b) $ule4 Once payment rendered for natural obligation
cannot regain
F. 'ervice Finance of &aton Rouge v. Daigle ! owed debt to
sub&ect to ban9ruptcy. sues on note to secure debt- ! filed for
ban9ruptcy discharging financial obligations. ! made oral promise to
still pay ! what was owed.
a) 1;F2 !ebt from ban9ruptcy can give rise to natural
obligation
b) Oral promise can be enforced if clear and une4uivocal
(1) ounterargument: 1E7; +rgue thatban9ruptcy is li9e debt prescribed so oral evidence
cannot be used to establish promise to pay
;. 'toll v. Goodnight Corp employed by ! accepted forged"
bad chec9 from customer. ! suggested it was right for to repay C
lost b8c of her actions. +fter repaying C" fired
a) romise to pay created onerous contract w8 natural
obligation as cause
b) annot recover what was freely given
B. $e*ission of ebt
1. 'emission of debt is gratuitous in principle
a) !onations 6nter Nivos: !oes not re4uire authentic act
b) !onations $ortis ausa: 'e4uires formalities of will
. CC 1!!! "press or ?acit $e*ission
a) 'emission of debt by obligee etinguishes obligation.
$ay be epress or tacit
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b) Aomment b $e*ission is gratuitous but does not
re0uire aut%entic for* or to be in /riting
. CC 1!!& Presu*ption of $e*ission
a) Obligees voluntary surrender to obligor of instrument
evidencing obligation gives rise to presumption that obligee
intended to remit debt
b) 6n absence of eplanation" returning document containing
promise to another is evidence of remission of debt.
8. CC 1!&( $e*ission effecti,e /%en co**unication is
recei,ed b+ obligor
a) 'emission of debt is effective when obligor receives
communication from obligee
b) +cceptance of remission is alwayspresumedunless
obligor re&ects remission within reasonable time
c) 8 #rite letter releasing obligor of debt owed to you.
=hen change your mind and see9 to retract remission
+cceptance is presumed but still give obligor option to re&ect.
. 1ED1 'elease of real security
a) 'elease of real security given for performance of
obligation does not give rise to presumption of remission of
debt
F. "ic!s v. "ic!s paid notes to mother as mortgage. ! returnednotes to but not in authentic form.
a) 'emission of debt is gratuitous but does not re4uire
authentic form
b) 'emission occurs when communication was made
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;. "urley v. "urley
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b) ontract must be either reduced into writing or recited in
open court and capable of being transcribed. +greement recited
in open court confers upon each of them right of &udicially
enforcing its performance although its substance may be writtenin more convenient form
>. 0I;2 apacity of parties- authority of tutors or curators
a) $an to transact must have capacity to dispose of thing
included in transaction
b) =utor of minor or curator of person interdicted or absent
can not ma9e transaction without being authoried by the &udge
6. CC (7 Scope of transaction
a) =ransactions regulate only differences which appear
clearly to be comprehended in them by intention of parties"
whether it be eplained in general or particular manner" unless
it be necessary conse4uence of what is epressed- and they do
not etend to differences which parties never intended to
include
b) 'enunciation" which is made to all rights" claims" and
pretensions" etends only to what relates to differences on
which transaction arises
;. 0I;7 'ights ac4uired after transaction unaffected
a) 6f he who has transacted concerning a right which he had
in his own person" ac4uires afterwards a li9e right which
belonged to another" transaction can not be pre&udiced to his
new right
E. 0I;>
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a) One may add to transaction the stipulation of penalty
against party who fails to perform it- and nonperformance of
what has been agreed on" gives right to eact penalty according
to tenor of agreement" and pursuant to rule concerningonventional Obligations
&. CC (76 "ffect of transaction /# suret+ or /it% debtor
a) reditor who transacts w8 surety of debtor" may
discharge surety only and transaction will not diminish right
against debtor. But if it is with debtor that he has transacted"
surety will li9ewise have benefit of transaction" b8c his
obligation is only an accessory to that of principal debtor
1I. 0I;; =ransaction by one of interested parties" effect to
others
a) =ransaction made by one of interested parties is not
binding for others- can not be opposed by them
11. CC (7! $es udicata; lesion
a) =ransactions have" b8w interested parties" force e4ual toauthority of things ad&udged. =hey can not be attached on
account of any error in law or lesion. But error in calculation
may always be corrected
1. CC (7& $escission for error fraud or ,iolence
a) =ransaction may be rescinded notwithstanding whenever
there eists error in person or on matter in dispute. 6t may
li9ewise be rescinded in cases where there eists fraud or
violence
10. 0IEI 'escission of transaction based on void title
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a) =ransaction may also be rescinded when it has been
made in eecution of title which is null" unless parties have
epressly compromised on nullity
17. 0IE1 ,ullity of transaction based on false documents
a) ompromise entered into on documents which have since
been found false" is null in toto(altogether)
1>. 0IE2 ,ullity of transaction concerning rights already
ad&udicated
a) =ransaction respecting suit terminated by &udgment"
which ac4uired force of thing ad&udged and of which parties oreither of them was ignorant is null. 6f &udgment is one from
which there could eist an appeal" transaction is valid
16. CC (! General co*pro*ise of all differences
a) #hen parties have compromised generally on all
differences" which they might have had with one another" titles
which they then 9now nothing of and which were afterwards
discovered are not a cause of rescinding transaction" unless theyhave been 9ept concealed on purpose by deed of one of parties
b) But transaction becomes void if it relates only to ob&ect
upon which it is proved by titles newly discovered" that one of
the parties has no right at all
1;. Robbert v. Carroll involved in collision- settled claim.
!iscovers that in&ury worse than thought
a) 0I;E =ransactions have force of ad&udication-cannot retry same claim8issue
b) 0IE0 cannot rescind based on new information
learned
c) 0I;D didnt agree under fraud or duress36
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1E. 0amison v. *udlow ! owed C- ! lied about finances and
convinced to only collect C owed. released >IP ! debt.
a) 0I;D agreed based on ! fraudulent statements
b) 1E7; ! could argue it was gratuitous. *owever it
would be similar to debt discharged by ban9ruptcy or
prescription and would re4uire it to be in writing.
1D. #eyers v. 1cme "omestead had to wait 10 months to receive
chec9 from !. wants dividends from he wanted to withdraw and time
it too9 affect. did cash chec9 even though argued ! owed more w8
added stipulation that 3all rights reserved5
a) One to whom chec9 is tendered must accept or re&ect it-
cannot add own stipulation
b) +mount admittedly due is sufficient to etinguish debt
2I. RT* Corp v. #anuf $nterprises ! entered into agreement w8
for rental of agreement. !ispute arose over payment due- allowed
payment for undisputed portion. ! tendered payment w8 stipulation
3payment in full.5 crossed out stipulation- wrote 3partial payment5
a) ompromise withdrawn when ! agreed to have payment
serve as partial payment
3ices of Consent
I. General Principles
. 3ices of Consent: invalidated by vice which affects freedom of party
from freely giving consent
". ircumstances which affect freedom of consent do not necessarily
destroy it but impairs in
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3II. Cause Concerned in "rror
A. General Principles
1. CC 1&8& "rror ,itiates Consent
a) Nitiates only when it concerns the cause without which
the obligation would not have been incurred and that the cause
was 9nown or should have 9nown to other party
b) Aomment d Bilateral "rror: when both parties are in
error" contract rescinded b8c both parties misunderstood one
another
c) Aomment e @nilateral "rror: when only 1 party is in
error" rescinding contract will un&ustly in&ure party who is free
from error.
(1) ourts generally refuse relief
(2) $ay grant relief if it is principal cause for entering
into contract and other party 9new8should have 9nown of
error
d) 8 Bilbe has in mind to sell one ob&ect. Buyer has in
mind to purchase another
(1) =ransaction cannot be enforced based on error.
$ust leave parties as they are found
2. rror is false representation of reality
a) result from ignorance of eistence of something that
really eists or
b) result from wrong belief in eistence of something that
actually does not eist
0. onsent is epress will of party
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a) 6f prompted by error it does not epress partys true will"
consent given ineffectiveb8c party in error is consenting to
something to which he did not intend to consent to
7. Limitations
a) $ust loo9 at circumstances of both parties
>. $elief can be granted /%en:
a) rror is inecusable
b) Other party has changed position in significant way
c) arty see9ing rescission did investigate contract prior toconsent
d) Other 9new or should have 9nown of error
F. &ordelon v. %opici ! signed purchase agreement to buy
house- told that would ma9e renovations to property" not that
property would be epanded. ! wished to get out of agreement when
learned of servitude which would ma9e epansion impossible
a) 1D7D ! never communicated to cause for contract
was to epand house- cannot enforce b8c lac9ed 9nowledge of
error
7. CC 1&51 Ot%er part+ /illing to perfor*
a) arty may not avail himself of his error if other party is
willing to perform contract as intended by party in error
b) 36f party not in error allows party in error to eecutecontract as he believed it was agreed upon- cannot enforce to
rescind contract b8c of error5
!. CC 1&5 $escission; iabilit+ for a*ages
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a) arty who obtains rescission on grounds of ownerror is
liable for loss sustained by other party unless other party 9new
or should have 9nown of error
b) ourt may refuse rescission when effective protection of
other partys interest re4uires that contract be upheld.
'easonable compensation for loss he sustained may be granted
to party to whom rescission is refused
c) Aomment b annot be relieved for carelessness if party
in error ma9es mista9e. $ust suffer conse4uences
d) Aomment c ompensation is designed to protect
reliance interest limited to loss actually sustained
e) Aomment d #hen deciding whether to rescind or award
damages" courts loo9 at
(1) whether error was ecusable or inecusable
(a) arty in error not entitled to relief for
inecusable error b8c of own negligence
(2) whether other party has changed position-
importance of such change
f) Aomment e #hen interest of party not in error can be
protected by upholding contract" reasonable compensation may
be granted toparty in errorif upholding contract results in
unfair detriment
g) 3Let party off hoo95 for contract- still ma9e pay
h) 8 Bilbe agrees to do construction pro&ect for C1I"III-
discovers will cost him much more.
(1) ?enerally cannot rescind for mista9e- unless
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(2) rice was so low to warrant that other party
9new8should have 9nown of mista9e
i) 8 Bilbe has 2 ad&oining tracts of land. 6 want to
purchase 1 lot but Bilbe thin9s 6 want to purchase other lot.
!ocument describes tract 6 want to purchase but price paid
ma9es more sense toward other tract.
(1) =his is misunderstanding to principal cause and is
grounds for rescission
D. Twin City Pontiac v. Pic!ett made mista9e in computing
purchase price of car.
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. D%en it Occurs
a) #utual #ista!e: despite eplanation as to desired
4ualities of thing- can be annulled at re4uest of either party
b) $ista9e by 1 party@ B by other party- probably
rescinded based on fraud
c) $ista9e by 1 party@ ? by other party- damages may be
allowed by 1D>2
7. Calhoun v. Teal sold land to !- surveyor miscalculated
acreage so conveyed more land. . 'aunders v. 2ew -rleans Public 'ervice B8c !octor didnt
fully eamine after accident" missed certain in&uries. relied on
diagnosis and entered into agreement w8 ! for in&uries
a) Both parties in error believing in&uries were minimal" can
rescind
b) ontrast w8Robbert v. Carroll
6. )isunderstandings
a) efinition4 ach party attributes different meaning to
word
b)
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d) *yons #illing v. Cusimano ! ordered certain type of
flour from . ach had different type of flour in mind
(1) Both parties in error. But since error was e4ual
cannot grant relief for either
C. @nilateral "rror
1. CC 1&8&
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b) 1D>2 entitled to return of deposit
>. )niversal /ron +or!s v. Falgout Refrigeration ! submitted
bid to do air conditioning wor9 for .
a) rror must be principal cause to contract
b) Other party must be fully apprised to error
F. 'hreveport Great $mpire &road v. Chicoine ! claims verbal
agreement by entitled him to certain Q of spea9ing engagements and
was reason for entering into contract.
a) ?o pre,ail on defense of error
(1) ause of obligation
(2) rror affected cause
(0) Other party 9new or should have 9nown of cause
;. Citi(en,s &an! v. 0ames ! agreed to purchase property for
C>I"III then learned it was worth much less- refused to pay Ban9
purchase price
a) rror injudgmentis ,O= reason for rescission
. CC 1&5( "rror t%at concerns Cause
1. #hen it bears on nature of contract" or thing" that is contractual
ob&ect or substantial 4uality of that thing" or person or 4ualities of
other party" or law" or other circumstance that parties have regarded"
or should in ? have regarded as causeof obligation
2. GGAomment f rror within partys sub&ectivity !O< ,O=
invalidate contract
. "rror as to t%e Person
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a) &ischoff v. &rothers of 'acred "eart applied for
teaching position at Brother $artin- contract withdrawn when
school learned was divorced
(1) rror was to person marital status
(2) didnt disclose marital status b8c 9new it was
unli9ely that hed be hired
(0) /ntentional deceptionon part of was sufficient to
allow rescission
8. "rror in -ature of Contract
a) +ise v. Prescott ! ad&ustor met w8 day after her
accident to have her sign waiver. didnt believe it was a
liability release
(1)
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b) CC (7! $es udicata; error; lesion
=ransactions have" between the interested parties" a force e4ual
to the authority of things ad&udged. They can not be attac!ed
on account of any error in lawor any lesion. But an error incalculation may always be corrected.
c) =ransaction8ompromise not invalidated by error of law
d) amples
(1) *eir who sells property he has inherited in
erroneous belief that under law of successions he has
received only the na9ed ownership but actually he
received full ownership ntitled to rescission b8c error
of law caused him to sell more than intended
(2) erson buys immovable property under erroneous
interpretation of oning regulation that it may be used for
certain purpose when in fact it cannot ntitled to
rescission b8c ac4uired ob&ect w8 4uality different than
one he had in mind
e) "ill v. "ill ntered into compromise concerning
ownership of gas and oil royalties
(1) =ransaction8ompromise cannot be invalidated
based on error of law
". Anal+sis
1. 6dentify the rror
a) !id it affect the ause of consent so that party would nothave agreed absent the error
2. !id other party 9now8should have 9nown of error to cause
without which party would not have obligated himselfM
0. #as error ecusable46
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3III. Cause concerned in 'raud
A. CC 1&5 'raud *a+ result fro* *isrepresentation or silence
1.
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0. #hen person to whom alleged false representation is made does
not rely on representations but conducts own investigation" cannot
claim fraud
C. CC 1&55 "rror induced b+ 'raud
1. rror does not need to be concerned w8 cause
2. $ust concern circumstance that substantially influenced
consent
0. rror is element of fraud
. CC 1&56 'raud co**itted b+ rd Person
1. Nitiates consent of contracting party if other party 9new or
should have 9nown of fraud
2. Aomment b #hen fraud has been committed by 0rd person
without 9nowledge of party who benefited from it" other party is still
bound
0. !oesnt include situations where price is so close to 3correct5
price where party doesnt 9now8shouldnt 9now he had been misled
". CC 1&57 Proof
1. raud only needs to be proved bypreponderanceof evidence
and may be established by circumstantial evidence
2. Aomment b ourts have always ac9nowledged how difficult
it is for one to prove fraud by positive and direct testimony" realiing
full and well that those who indulge in it generally prepare themselves
in such manner as to cover up and leave no traces of practice behindthem
'. CC 1&5! a*ages
1. arty against whom rescission is granted b8c of fraud is liable
for damages and attorney fees48
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2. Aomment c 6f fraud is committed by 0rd person" that person is
also liable for damages
G. $rror as to valuemay constitute fraud but will not afford remedy b8c
party could have found out true value
:. Griffing v. 1t!ins erson see9ing to determine value of piece of
&ewelry. ,umber of &ewelers involved in assessment of value- 9nowing it to
be false. Only one enters into contract
1. 1D>7 Hewelers have special 9nowledge that would enable
them to determine truth
2. 1D>F !o not need to be involved form outset to be found a0rd party
I. -rr v. +al!er ! agreed to purchase land from on behalf of =alley
9nowing that would not sell land to =alley. ! told that =alley was
moving away in few wee9s
1. raudulent statement cannot vitiate contract based onfuture
event. $ust bepresent eventto vitiate contract
2. iece of paper representing sale was a present event
. -verby v. &each wanted to buy property from !- had them certify
what rent prices would be. later learned that rent prices eceeded
maimum allowed value
1. 1D>7 reasonably relied on ! assertions
2. ,ot within eception that consent not vitiated if truth can be
easily ascertained
IE. uress
A. CC 1&5& -ature
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1. onsent is vitiated when it has obtained by duress of such a
nature as to cause reasonable fear of un&ust and considerable in&ury to
partys person" property" or reputation
a) Ob&ective
2. +ge" health" disposition" and other personal circumstances of
party must be ta9en into account in determining reasonableness of fear
a)
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. CC 1&6 ?%reat of "ercising $ig%t
1. =hreat of doing lawful act or threat of eercising right does not
constitute duress
2. =hreat of doing act that is lawful in appearance onlymay
constitute duress
". Couder v. -teri ! tried to recover C from that wife had turned over.
,o record of violence or threats used by !- meeting b8w two parties seemed
to reunite them. +fterwards relin4uished C to !.
1. had no reasonable ob&ective fear
a) 1D>D para 2 doesnt include character of person to
determine if fear was reasonable
'. +ilson v. 1etna Causality 4 'urety ! forced out of hospital because
could no longer pay. ntered agreement w8 for lac9 of any other choice.
,ow see9s to recover more C than received under release
1. duress was caused by eternal circumstances.
2. 6n order for duress to vitiate consent by be caused by an actornot &ust from the entire set of ob&ective circumstances causing N to act
as he did
G. 1dams v. 1dams *usband and wife used same attorney to settle
community property as 4uic9ly as possible. +t time of agreement she gave
up many rights to community assets- she now regrets signing document.
#ife made to believe that if she didnt sign that husband would file for
ban9ruptcy and she would receive nothing
1. 1D>D motional strain does not constitute legal duress
2. 1DF2 =hreat of lawfulact is not duress
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:. 0ordan v. City of &aton Rouge car impounded after arrested for
burglary. =o retrieve car had to sign waiver releasing police of liability as to
any damage. Hun9 yard had already begun to disassemble car- had to pay
to have it repaired
1. !uress vitiated force of waiver b8c had no other choice but to
sign document
2. did not act out of own volition
9inds of Obligations
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6. $eal Obligations
A. 'elationship betweenpersonand thing
B. CC 176 efinition: incurred as result of ownership or possession ofthing burdened by real right
0. 'eal 'ight/ right connected w8 thing rather than person
7. 8 predial servitude
I. CC 1768 C%aracteristics#"ffects
1. 'ight transferable to person who ac4uires thing
2. erson who ac4uires thing is not bound by personal obligations
of previous owner (unless chooses to assume obligation)
a) 0rd arty Beneficiary: a party who is not party to contract
can pursue &udicially the one who involved in agreement.
0. $ay abandon thing and liberate self of real obligation
. :+po
1. + wants to buy piece of land- ban9 wont lend without security.
=a9e out mortgage on property- mortgage holder then has real rights
as to property. 'ights include: have property seied and sold if
secured obligation not performed.
a) 6f person ta9es out 2 mortgages then defaults and
property seied and sold" payment goes to 1st lender than
whatever is left goes to 2nd lender. Both are real rightsbut one
is inferior to other
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b) roperty w8 mortgage sold to B. 6f + fails to ma9e
payments" property can be seied from B b8c mortgage is real
right which runs w8 property.
2. + purchases house from B- assumes portion of debt. reditor
can now collect debt from either + or B since + promised to ta9e on
debt.
a) romise of + does not relieve B of debt
b) FSale /# Assu*ption
0. roperty worth C1II"III w8 CDI"III mortgage. + buys
property from B. 6f B fails to pay debt" property can be seied.
a) + is not responsible for debt b8c never assumed debt
through promise to pay
7. + purchases house from B. 'oof has recently been redone-
begins to lea9. + cannot assert claim against roofer unless he
epressly too9 on rights.
9. Cases
1. &reau v. *aird 6ns. o. issued bond on construction co. to
guarantee faithful performance- would pay if construction co. failed to
perform.
a) *olding: urchaser of home (with no privity to ins co
could bring O+ for lac9 of performance by construction co)
b) CC 1768) *eir or other ac4uirer of property w8 real
right also ac4uires right to enforce any contract as seller had2. #cGuffy v. +eil + sold property to B with B.'.- recorded it.
purchased land.
a) *olding: 'ecorded B.'. binding on
b) GB'/ real rights running w8 land54
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c) stablishment of servitude must be clear
d) $ust be recorded to affect 0rd persons
E. Strictl+ Personal and :eritable Obligations
A. CC 1765 :eritable Obligation: erformance may be enforced by
successor of oblige or against successor of obligor
1. G+ll obligations deemed heritable unless
a) ,ature of contract says differently
b) ontrary results from terms of contract
2. Obligation is transferable
B. CC 1766 Strictl+ Personal Obligation: erformance can be enforced
only by original obligee or only against original obligor
1. ill or
0ualification defined: all contracts for hire of labor"
s9ill" industry" without any distinction whether they can
be performed by any other as by obligor" unless special
agreement to contrary" are considered personal on part
obligor" but heritable on part of obligee
(0) ommitment to marry is personal
2.
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a) #hen benefit is intended for the benefit of the obligee
eclusively
C. :+po
1. +greement b8w + and B for future performance
a) + promises property to B
(1) + obligor- B obligee
b) 6n return" B promises to pay +
(1) B obligor- + obligee
c)
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(a) ,o- special s9ills or 4ualifications are
strictly personal
(7) #hat if + dies before payment is made and heirs
refuse to payM
(a) Obligation was heritable as to obligee so
heirs breached R by refusing to pay
c) Obligation to pay C (+/ obligor- B/ obligee)
(1) + sells house to epressing all rights to him. B
refuses to paint house for .
(a) ainter must paint house b8c right was
transferrable
(2) + transfers rights" B paints house" no payment
made
(a) + still owes but B could also collect from
who assumed rights
. Cases
1. /n Re #inor Female Child mothers parental rights terminated-
dies while awaiting appeal. $others heirs try to continue suit
a) *olding: $others death terminated rights
b) Obligation arises out of nature of situation (facts)
c) Parental Rightsare strictly personal- can only be
enforced by obligee (mother)
2. &ogart v. Caldwell + sells property to B and B agreed not to
operate movie theater as long as he owned property. + dies" B begins
to operate movie theater
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a) *olding: Obligation not to operate was heritable- did not
end w8 death of +.
0. *arocca v. *arocca *usband filed for divorce- wife see9s
return of property she had given him during time of marriage. !ivorce
appeal suspends effectiveness of divorce. #ife died while awaiting
appeal.
a) *olding: #ifes death ended marriage not divorce- heirs
can follow through with effort to regain property
b) "ception to General $ule: #here property interests
are at sta9e and one party dies during appeal allow continuation
of otherwise personal obligation
EI. Conditional#Si*ple Obligations
A. efinition: Obligation dependent upon uncertain event
1. !istinguished from Obligation w8 =erm which relies on certain
event
2. onditional Obligation: 36ll give you this ring if helsea diesbefore the end of the year5
0. Obligation w8 =erm: 36ll give you this ring if helsea dies5
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B. General Principles
1. 1;FE pressed and 6mplied onditions
a) onditions may be either epressed in stipulation
b) 6mplied by Law
c) ,ature of ontract
d) 6ntent of parties (but cannot be unlawful)
2. 1;;1 Obligees 'ight pending ondition
a) Once condition fulfilled" obligee may ta9e all lawful
measures to preserve right
. ?i*e fra*e for conditional obligations
a) CC 177 ",ent /%ic% s%all occur4
(1) 6f condition to occur within fied time and time
elapses without event" condition fails
(2) 6f no time frame for event condition may be
fulfilled within reasonable time frame
b) CC 1778 'or e,ent /%ic% s%all not occur
(1) 6f event is not to occur within time frame"
condition is considered fulfilled once time has elapsed
without event occurring
(2) ondition fulfilled whenever certain that the event
will not occur whether there is time frame or not
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c) CC 177 'ault of part+
(1) ondition regarded as fulfilled when reason why
condition not fulfilled is b8c of fault of a party w8 interest
contrary to fulfillment
8. CC 1775 $etroacti,e "ffects
a) ulfillment of conditional obligation is retroactiveto
inception of obligation but does not
(1) 6mpair validity of acts of administration duly
performed by party
(2) 6mpair ownership of fruits produced
(0) 6mpair rights ac4uired by 0rd person while
condition pending
C. CC 1767 ?/o ?+pes of Conditional Obligations
1. 'uspensive Obligation not enforced untiluncertain event
occurs. 3%ncertain event enforces agreement5
a) 1;FD %nlawful or 6mpossible ondition
(1)
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. Potestati,e Condition: ulfillment of condition is within partys
power
1. CC 177( Condition t%at depends on D%i* or Dill of
Obligor
a)
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e) 1!7( Code2 CC (5 Conditions upon /ill of obligor
otestative conditions ma9e obligations depend solely on
eercise of obligors will- but if conditions be that obligor shall
do or not do certain act" although it depends on will of obligor"yet obligation depending on such condition is not void
(1) "umble -il uncertain event within sellers power
to ma9e happen8not to ma9e happen
f) 1!7( Code2 CC (6 Conditions depending on /ill of
obligeeobligation may also be made" by consent of parties" to
depend on will of obligee for its duration.
g)
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a) *olding: ontract binding when both agreed to terms
b) 'ault of Part+4#here condition would have occurred
ecept for ! misbehavior" person who 9ept condition should
not be refused to go forward b8c condition did not occur
2. &acon v. Ford ! entered into contract to purchase house
conditioned upon ability of purchaser to borrow C. ! didnt do what
was necessary for sale to meet deadline
a) *olding: 6t was suspensive contract which relied upon
condition to be enforced but condition not fulfilled within
re4uired time therefore contract wasnt enforceable
b) $ule: #here purchaser" through no fault of his own"
unable to obtain loan upon which agreement conditioned on"
obligations imposed by agreement not binding and parties
released from obligations
0. #anuel v. 'haheen in&ured while using boat of !. trying to
collect C from boat seller claiming they still owned it
a) *olding:
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b) 6n weighing probability that ! will lease land" he
probably will b8c it would be beneficial to him
F. 2at,l 'afe v. &enedict 4 #yric! ! had eclusive right to
mar9et product of !- certain employee made mar9eting very
successful. created new company and turned it over to employee.
6nducement inconsistent w8 arrangement
a) *olding: 6nducement was against ideals of fair play
b) CC 1&! Perfor*ance in G' ontracts have effect of
law for parties and must be performed in ?
c) CC (58 -o pro,ision of parties for particularsituation $ust assume that parties intended to bind themselves
to law" e4uity" or usage regards as implied of that 9ind or
necessary to achieve purpose
d) CC (55 "0uit+ and @sage ,o one is allowed to ta9e
unfair advantage of another and that no one is allowed un&ust
enrichment
e) Significance: ontracts can have implied obligationsbased on law" e4uity or custom which are not eplicitly
stipulated
;. *ong v. Foster 4 1ssoc had contract to be employed for >
yrs unless he decides to terminate. 2 yrs into contract" radio station
is sold and employee is fired.
a) *olding: 'esolutory contract b8c obligation
unenforceable immediately but dependent on employee not
terminating- obligor must eercise in ?
b) ?: must consider own advantage and hardship to other
party
c) One party can determine duration of agreement
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EII. Obligations /it% a ?er*
A. CC 177! efinition: eriod of time allowed for performance of
obligation
1. Certain: =ime frame is fied
2. )ncertain: =ime frame is not fied but is determinable by
(1) 3%ncertainty as to when event will occur5
b) 6ntent of parties
c) Occurrence of future certain event
d) 6f not determinable must be performed within reasonable
time
B. ?eneral rinciples
1. CC 1777 "press or I*plied term for performance of
obligation may be epressed or implied by nature of contract
a) erformance not sub&ect to term is due immediately
2. CC 177& ?er* Presu*ed to benefit Obligor unless
agreement or circumstances show that it was intended to benefit
obligee or both parties
0. CC 17!( $enunciation of ?er* party for whose eclusive
benefitterm has been established may renounce it
a)
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1. Castano v. &ellina originally paying note to ! in monthly
installments- then wishes to pay remainder in lump sum. ! trying to
enforce penalty fee
a) *olding: annot enforce penalty fee
b) CC 177& term presumed to benefit obligor () and
circumstances dont show otherwise
c) CC 17!( had eclusive benefit of term and had right to
renounce by paying remainder all at once- t didnt find that
monthly payments benefited !
2. Caston v. +omen,s "ospital photographer purchasede4uipment after being hired to ta9e pictures of newborns. ired after
&ust a few days. !uration of agreement was indefinite.
a) *olding: !uration should be assumed for reasonable time
(t found reasonable time to be F months)- entitled to recover
what he would have made during that time
b) CC (8 Contract ter*inated b+ parties initiati,e
contract can be recognied even if indefinite duration. #illrecognie rights of party if contract not upheld for reasonable
time. =ermination must be given notice reasonable in time and
form.
0. 'tate v. -r!in Or9in promised that price wouldnt go up
throughout lifetime of structure but then increased prices.
a) *olding: ontract for lifetime of structure was for
definite and ascertainable period
b) ,o uncertainty as to when term will end structure no
longer eists
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7. 'outhern 'tates #asonry v. 0.1. 0ones Const ! was gen
contractor hired by #orld air (#). ! hired subcontractor.
ontract read: 3pay when paid5 ! refused to pay until he was paid
by # b8c # unable to pay
a) *olding: ! has to pay regardless if they are paid by
#
b) 36ll pay you when 6m paid5 was term not condition
?en contractor obligated to pay within reasonable time
c) 6ntent shows that epected to be paid- uncertain as to
when that time would be must be within reasonable time
d) 'easonable time for payment ended when ! realied
wouldnt be paid by #
EIII. CC 17!6 Obligations /it% )ultiple Persons when obligation binds 1@
obligor to one obligee" or binds one obligor to 1@ obligee" or binds 1@ obligor
to 1@ obligee
A. ffects
1. 'everal: Obligee could proceed against each obligor but only
for performance promised by that obligor (not entire amount)
2. 0oint: Obligee could proceed against all of obligors but only for
their share
0. 'olidary: Obligee could proceed against one of his obligors or
against all of them" for whole amount in either case
B. CC 17!7 Se,eral Obligation
1.
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0. roduces same effects asseparate obligationowed to each
obligee by obligor or by each obligor to obligee
C. CC 17!! oint Obligations for Obligors or Obligees
1. . 2abors v. Producers -il > parties granted oil lease over
property- ! re4uired to drill within 1 yr to maintain lease. ! drilled on
2 properties within yr
a) 1;EE #hen several persons &oin in same contract to
do same thing" it produces &oint obligation on obligors.ommon benefit for all
. istinguis%ing b#/ Se,eral and oint Obligations
1.
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2. Hoint: Only one ob&ect single performance
". Solidar+ Obligation in solidio- &oint and severable- &ointly and
severally2
1. CC 17&8 Solidar+ Obligation for Obligors
a) ach owes whole performance
. CC 17&( Solidar+ Obligation for Obligees
a) ach entitled to receive whole performance
0. CC 17&6 Solidarit+ not Presu*ed $ust arise from clear
intention of parties or by law
a) "ception 4 H 116 -egotiable Instru*ents4if signed
by 2 parties considered solidary despite epress mention
b) "ception 4 CC (85 Suret+s%ip: each surety liable to
creditor for full amount b8c sureties are in solidio without
epress mention
7. CC 17&& Interruption of Prescription interruption against
one solidary obligor interrupts prescription against all
>. 1EI2 'enunciation of
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d) Aomment d
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h) :+po#T reditor- +"B""!
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b)
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2. arties may provide thatfailure of obligor to perform one or
more items shall allow obligee to demand immediateperformanceof
all remaining items
0. Aomment b Liberative prescription runs separately on each
7. +cceleration lause: 6f obligor fails to perform 1 or more of
obligations" obligee can demand performance of all remaining items-
>. 8 $onthly rent payments are each separate obligations
F. 'unning of prescription starts separately for each item
;. Gardiner v. #ontegut see9s payment for last few months of
wor9. !idnt see9 payment until yrs later but claims prescription
interrupted by collection of some payments.
a) *olding: ach payment was own distinct debt ( 1EI;)
b) $ule: #hen salaries" wages" or rents are earned on
periodical basis" amount due for each period represents claim
separate and distinct from each other" and as to each"
prescription commences to run from due date unaffected by
anything that may be done concerning similar claim for other
period
B. CC 1!(! Alternati,e Obligation: ARey term: O' Obligor bound to
render only one of two or more items of performance. hoice of which
obligation is going to be performed lies w8 obligor.
1. CC 1!11 Obligor cannot c%oose part of one item
erformance does not include part of one obligation and part of
another
2. CC 1!(& C%oice belongs to obligor unless it has been
epressly or impliedly granted to obligee
0. CC 1!1 I*possibilit+ or @nla/fulness of One Ite*
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a) -bligor Choice: 6f one item of performance becomes
impossible or unlawful" obligor must render one of items that
remain even absent own fault
b) -bligee Choice: 6f one item of performance becomes
impossible or unlawful" obligee must choose one of items that
remain
8. CC 1!1 I*possibilit+ or @nla/fulness of All Ite*s
a) 6f all of items of performance become impossible or
unlawful without obligors fault" obligation is etinguished
>. #adere v. Cole owner of daddy puppy made contract to geteither pic9 of litter or C2>I from mommy puppy. =ime period epired
for payment- one of puppies died
a) 1E12 since only one option left had to choose that
one- couldnt bac9ed out of deal all together
E3. i,isible and Indi,isible Obligations
A. CC 1!15 i,isible and Indi,isible Obligation
1. Obligation is divisible when ob&ect of performance is
susceptible of division
2. Obligation is indivisible when ob&ect of performance" because
of its nature or because of intent of parties" is not susceptible of
division
B. CC 1!1! "ffects of indi,isible obligations b#/ *ore t%an one
obligor or obligee
1. 6ndivisible obligation w8 more than 1 obligor or obligee sub&ect
to rules governing solidary obligations
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?ransfer of Obligations
I. General Principles
A. %nless obligation isstrictly personalobligation may be transferred
from original party to 0rd party
II. Assu*ption of Obligation
A. =ransfers Obligation from vantage point of obligor- erson who
assumes anothers obligation stands in shoes of original obligor
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B. :o/ Assu*ption Arises
1. CC 1!1 Assu*ption b+ Agree*ent b#/ Obligor and rd
Person
a) Obligor and 0rd person may agree that 0rd person
assumes obligation of Obligor
b) Obligees consent to agreement does not release original
obligor from debt
c) %nreleased obligor remains solidarily bound w8 0rd
person
d) :+po#+ owes something to B. promises + to pay
obligee.
(1) $ust be in writing for B to enforce nonpayment
against
(2) !oes not need to be in writing for + to enforce
against for nonpayment
(0) + remains obligated to B if does not pay
e) :+po#urchaser of land assumes mortgage.
(1) reditor is 0rd party beneficiary
(a) ermitted to directly enforce commitment
made in contract to which not party
(b) annot assert against purchaser unless made
in writing that debt of seller is assumed
. CC 1! Assu*ption b+ agree*ent bet/een Obligee and
rd Person
a) Obligee and 0rd person may agree that the 0rd person
will assume obligation owed to obligee by another
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b) +greement must be made in writing
c) t ception (1E7;" 1E20): 6f it can be shown that 0rd
person had interest in promise" then may allow testimony to
prove promise absent written instrument
C. $ig%ts and iabilities of Person Assu*ing Obligation
1. CC 1! rd Person Bound for A*ount Assu*ed
a) erson" who" by agreement w8 obligor" assumes
obligation of Obligor is bound only to etent of assumption
(1) !o not have to do more than promised
2. 1E27 !efenses
a) +ssuming 0rd party mayraise any defenses based on
contract
b) +ssuming 0rd party mayraise any defenses based on
relationship b8w original obligor and obligee
c) +ssuming 0rd party may notraise any defense based on
relationship b8w assuming 5rd party and original obligor
. 'elease of the Obligor
1. 1E20 +ssumption by agreement b8w Obligee and 0rd
person =hat agreement does not effect a release of obligor
III. Subrogation
". O,er,ie/
1. =a9es place from vantage point of obligee. erson in whose
favor subrogation ta9es place stands in shoes of obligee
2. +llows security interest to continue8subsist to secure original
indebtedness
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0. tinguishes debt through payment by 0rd person but allows
that 0rd party to be reimbursed for payment
'. CC 1!5 efinition
1.
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:. Con,entional Subrogation
1. CC 1!7 Con,entional Subrogation b+ Obligee
a) Obligee who receives performance from 0rd person maysubrogate that person to rights of obligee" even without
obligors consent
b) IR" what
are s rights against +M +nswer: 1IIR.
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g) CC Assign*ent effecti,e fro* ti*e of >no/ledge or
notice
(1) +ssignment of right is effective against debtor and
0rd persons only from time debtor has actual 9nowledge"
or has been given notice of assignment
(2) 6f partial assignment unreasonably increases
burden of debtor he may recover from either assignor or
assignee a reasonable amount for increased burden
h) 2F77 erformance by debtor before 9nowledge of
assignment
(1) #hen debtor" without 9nowledge or notice of
assignment" renders performance to assignor" such
performance etinguishes obligation of debtor and
effective against assignee and 0rd persons
i) 2F7> +ccessories included in assignment of right
(1) +ssignment of right includes its accessories such
as security rights
&) 2F7F #arranty of eistence of debt" solvency of
debtor
(1) +ssignor of right warrants its eistence at time of
assignment
(2) +ssignor does not warrant solvency of debtor"
unless he has agreed to give such warranty
9) 2F7E
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l) 2F7D +ssignors 9nowledge of debtors insolvency-
effects
(1) #hen assignor of right did not warrant solvency of
debtor but 9new of his insolvency" assignee without such
9nowledge may obtain rescission of contract
m) 2F>I #arranty in assignment of succession rights
(1) erson who assigns rights in estate of deceased
person" without specifying any assets" warrants only his
right of succession as heir or legatee
n) 2F>7 !ocuments evidencing right
(1) +ssignor of right must deliver to assignee all
documents in his possession that evidence the right
(2) ailure by assignor to deliver such documents does
not affect validity of assignment
(0) #hen a right is assigned only in part" assignor may
give assignee original or copy of such documents
. CC 1!! Con,entional Subrogation b+ obligor
a) Obligor who pays debt w8 money or other fungible things
borrowed for that purpose may subrogate the lender the rights
of obligee" even without obligees consent
b) +greement for subrogation must be made in writing
epressing that purpose of loan is to pay debt
0. +il!in v. Dev Con +greement for ! to construct buildings- !re4uired to get bond and surety. paid subcontractors on behalf of
surety-
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I. egal Subrogation
1. CC 1!& Subrogation b+ operation of la/
a) #hen 1 obligee pays another obligee w8 superior rights(privilege" pledge" mortgage" or security interest)
b) #hen purchaser of property uses purchaser C to pay
creditor w8 real right to property (privilege" pledge" mortgage"
security interest on property)
c) #hen obligor owes debt 3with other or for others5 pays
that debt and has recourse against other obligors on account of
payment.
(1) "ception: *ealth and accident insurer of tort
victim not legally subrogated to insureds O+ against
tortfeasor
d) #hen successor pays estate debt w8 own funds
e) 6n other cases provided by law
f) Aomment d reditor who pays another creditor is notlegally subrogated to rights of the 2nd creditor if 1st creditor as
principal obligor of debt
. CC 1!( "ffects of legal subrogation
a) ,ew obligee may recover from obligor only to etent of
performance rendered to original obligee
b) ,ew obligee may not recover more by invo9ing
conventional subrogation
0. 't 0ames &an! and Trust v. ' 4 " $nterprises Ban9 lent C to
!- secured up to DIP by L+$B!+. #hen ! didnt pay C owed to
Ban9" L+$B!+ paid DIP of claim but wanted Ban9 to turn over
remaining 1IP for them to bring against !.
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a) 1E2D para 1
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a) 1E2D para 0 Both insurer and insured have claim for
same thing fiing of roof
0. #artin v. *a Farm &ureau in&ured in car accident. *is
insurance company paid his epenses- company sought to recover C
from tortfeasor
a) *ealth and accident insurers are not bound 3with or for5
tortfeasor whose actions give rise to medical epenses. 6nsurers
simply doing what is called for in contract w8 insured
7. Copeland $nterprises v. 'lidell #emorial paid medical
epenses of one of its employees.
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9. CC 1!58 "tinction b+ perfor*ance
1. erformance by obligor etinguishes obligation
. CC 1!55 Perfor*ance b+ rd person
1. erformance may be rendered by 0rd person" even against will
of obligee" unless obligor or obligee has interest in performance only
by obligor
2. erformance rendered by 0rd person effects subrogation only
when so provided by law or by agreement
0. 1rby &rothers v. Tillman $rs. LeBlanc paid ! on behalf of .
hec9s found to be ,
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(1) t must find the action appropriate
F. 'tandard #otor Car v. 'tate Farm was driving a car left by
customer for repair when involved in accident caused by negligence
of other driver. pays costs of repair- see9s to recover cost from !"
insurer of negligent driver
a) appropriately discharged responsibility for
management of affairs of other" entitled to reimbursement from
that party (!)
). 1E>F Nalid transfer of ob&ect of perf