good bilbe obligations outline 100

8/13/2019 Good Bilbe Obligations Outline 100

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Conventional Obligations- Spring 08

Bilbe

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

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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


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

7.


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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

32


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Bilbe

;. "urley v. "urley


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Bilbe

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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Bilbe

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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Bilbe

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


. 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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Bilbe

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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Bilbe

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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Bilbe

(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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Bilbe

. 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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Bilbe

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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Bilbe

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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Bilbe

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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Bilbe

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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Bilbe

3III. Cause concerned in 'raud

A. CC 1&5 'raud *a+ result fro* *isrepresentation or silence

1.


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Bilbe

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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Bilbe

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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Bilbe

. 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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Bilbe

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

53


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Bilbe

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


55/98


Bilbe

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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Bilbe

(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

57


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Bilbe

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

58


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Bilbe

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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Bilbe

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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Bilbe

. 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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Bilbe

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


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

good bilbe obligations outline 100

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