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269 Cards in this Set
- Front
- Back
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How is performance done?
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By giving, doing, or not doing something
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How do obligations arise?
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From K's and other declarations of will
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Obligee's right and obligor's rights in obligation
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Obligee:
1) Enforce performance 2) Enforce performance by another at obligor's expense 3) Recover damages Obligor: 1) Obtain discharge when performed in full 2) Contest obligee's actions when obligation extinguished or nullified |
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Good faith
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Governs conduct of parties throughout obligation
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Burden
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Party demanding performance has burden to prove existence of obligation
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Requirements for a valid K
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Cause, consent, capacity, object
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Natural obligations
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Arise from circumstances in which law implies moral duty to render performance, but not enforceable by judicial action
What has been freely performed in compliance w/ natural obligation may not be reclaimed |
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How to turn natural obligation into a civil one?
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Obligor makes a promise that he will render performance
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How to make a moral duty a natural obligation?
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1) Duty felt towards a particular person, not all persons in general
2) Person involved feels so strongly about moral duty that he truly feels he owes the other party a debt 3) Performance of duty capable of pecuniary valuation 4) Does not upset public order to perform 5) Recognition of obligation by obligor must occur by performing obligation or promising to perform |
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Unilateral K
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Only one party bound by obligation
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Synallagmatic K
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Both parties have reciprocal obligations
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Onerous K
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Each party obtains advantage in exchange for obligation
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Gratuitous K
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One obligates himself towards the benefit of another, without receiving an advantage back
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Commutative K
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When performance of K is correlative to performance of other party
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Nominate K, Innominate K
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Special designation given to nominate such as sale, lease, etc
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General consent rule for form
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Offer and acceptance can be made orally, in writing, or by action or inaction that is clearly indicative of consent
No conformity necessary between way in which offer is made and way in which acceptance i made |
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Transfer of ownership under consent
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Made as soon as there is agreement and price is fixed, even though the thing is not yet delivered and the price is not yet paid
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Oral K form rule for corporeal movable
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$500 and below can be shown by evidence, above that must be proved by at least one witness and other corroborating circumstances
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Preliminary negotiations
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No code article, governed by A. 1759 good faith
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Irrevocable offer
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Offer that specifies period of time for acceptance irrevocable during that time
Offer which manifests intent to give offeree delay to accept is irrevocable for reasonable time Offer that invites acceptance by completed performance and performance commenced, irrevocable for a reasonable amount of time |
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Irrevocable offer- time limit for expiration
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Expires if not accepted either within specified period of time or reasonable time if intent to give delay for acceptance
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When can revocable offer be revoked
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Before accepted, effective when received by offeree prior to acceptance
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Revocable offer- time for expiration
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Expires if not accepted in a reasonable time
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Death or incapacity of offeror
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If before acceptance, offer expires, unless option
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How is reception defined as it relates to consent?
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Written revocation, rejection or acceptance received when it comes into possession of addressee or person authorized by him to receive it (A. 1938)
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General rules for offer
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Must be directed towards person who can accept, must be sufficiently definite and precise so that offeree can accept (lack of precision= invitation to negotiate)
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Specific rules for offer for sale or lease
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Sale= must be precise in thing sold and price, lease= must be precise in object, rent and time which lease will start
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Advertisement
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Offer can be made to several people but offeror incurs liability if does not make each offeree aware offer made to others
But advertisement is invitation to negotiate, not offer |
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General interpretation rule
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In case of doubt, provision in K is interpreted against party who wrote the text (A. 2056)
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Offer of reward
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Offer of reward made to public is binding upon offeror even if person who accepts does not know of offer (A. 1944)
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Revocation of offer of reward
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Can be done prior to acceptance if done in means equally effective as means offer was made in (A. 1945)
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Acceptance of irrevocable offer
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Effective when received by offeror (A. 1934)
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Acceptance of revocable offer
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Effective when transmitted, unless otherwise specified (A. 1935)
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Medium or manner of acceptance
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Reasonable if one used in making offer or customary in similar transactions at time and place offer is received, unless circumstances known to offeree indicate otherwise (A. 1936)
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Offer invites acceptance by commencement of performance
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K begins when offeree begins requested performance if invites offeree to accept by performance and according to usage or nature of terms of K, contemplates that performance will be completed if commenced
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Offer invites acceptance only by completed performance
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If offer can be accepted only by giving completed performance, offeror cannot revoke offer once offeree has begun performance for reasonable time necessary to complete performance
But in acceptance only by completed performance, offeree not bound to complete performance he has begun |
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Notice in acceptance
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If commencement of performance constitutes acceptance or makes offer irrevocable, offeree must give prompt notice unless offeror knows or should know that offeree has begun to perform
If acceptance contemplated by performance, offeree who fails to give notice is liable for damages |
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Offer accepted by silence
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Offer can be accepted by silence under special circumstances that lead offeror to reasonably believe K has been formed
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Acceptance not in accordance w/ terms of offer
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Counter offer
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Rejection of revocable offer
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Effective only upon receoption
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Acceptance limits, conditions, or modifies offer
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Considered a counter offeror and original offeror has right to withdraw
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Mere suggestion of different terms in acceptance
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Does not prevent formation of K
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Presumption of form
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If parties contemplate certain form, presumed they do not intend to be bound until K executed in that form (but rebuttable)
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Option K
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Parties agree offeror is bound by his offer for specific period of time and offeree can accept w/in that time
Survives death of offeror |
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Option requirements
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Must set forth thing and price, and meet formal reqs of sale it contemplates
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Option term
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Perpetual or indefinite term is null, must be specified period of time
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Option is really just...
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A promise to make a K later- unilateral promise to contract
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Option and PR doctrin
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Option/ROFR to sell immovable affecting against 3rd person only from time it is filed for registry. But if movable thing, effective against 3rd parties who had actual knowledge of that transaction
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Enforcement of RFR
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Specific performance
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Time for acceptance of RFR offer
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W/in 10 days from time it was received it movable thing, and 30 days if thing is immovable
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Grantor of RFR selling to other person
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Not unless offered to sell thing to holder of RFR on same terms or on those specified when right was granted if the parties have so agreed
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Time limit on RFR
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Cannot be granted for longer than 10 years for immovable, if granted for longer than 10 years then reduced to 10 years
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Exception to time limit on RFR
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Option or RFR granted in connection w/ K that gives rise to obligations of continuous or periodic performance, can be granted for as long as necessary for performance of obligations
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Retention of RFR
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Even if grantee of RFR fails to exercise it when offer was made to him, right in RFR subsists unless grantor concludes final sale or K to sell w/ 3rd person w/in 6 months
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Cause- definition and main requirement
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Reason a party obligates himself
Obligation cannot exist w/o lawful cause |
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Detrimental reliance definition
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Party knew or should have known promise would induce other party to rely on it to his detriment and other party was reasonable in so relying
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When is detrimental reliance unreasonable?
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If reliance was outside scope promisor intended, if promisee acts to his detriment in manner promisor could not have expected, reliance on gratuitous promise w/o formalities
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Requirements for detrimental reliance
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1) Representation was made
2) Justifiable reliance upon representation 3) Change in position to one's detriment bc of reliance (Edinburgh) |
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Recovery for gratuitous promise relied on to party's detriment
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Limited to expenses incurred or damages suffered as result of reliance
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Other rules re: cause
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Obligation may be valid even though cause not expressed
Even if cause in obligation is untrue, obligation still valid if valid cause can be shown Cause can change classification of K Subjective cause only becomes part of the K when revealed to the other party (and something along the lines of it's something one party could expect the other party's cooperation with) |
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Donation inter vivos form
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Authentic act under penalty of absolute nullity
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Exception to donation form
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Corporeal movable can be made by manual gift
Onerous donation, unless cost= less than 2/3 value of thing donated Remunerative donation, unless value of services= less than 2/3 value of thing donated |
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How to determine what kind of donation
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Q1: Promisor seeking advantage in exchange for promise? If yes, onerous, but still look at form; If no gratiutous, potentially donation but could be natural obligation
Q2: Does it deplete promisor's patrimony? Yes- donation, no, just gratuitous K (e.g. loan for use) Q3: Was primary motivation one of liberality? Yes- Remunerative donation; No- Onerous donation |
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One way to tell if simulated sale (donation in disguise), or real
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Price must not be out of proportion w/ thing sold
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Charitable subscription
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Intention to confer benefit is sufficient cause
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Flood v. Thomas
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Promise to pay debt of another enforceable if cause can be inferred
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Onerous donation
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No rules of donation inter vivos
Obligation imposed on donee that results in material advantage to donor, unless at time of donation cost of performing obligation less than 2/3 of value of thing donated |
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Remunerative donation
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No rules of donation inter vivos
Donation made to recompense for services rendered that are susceptible of being measured in money unless at time of donation value of services is less than 2/3 value of thing donated |
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Examples of absence of cause
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Thing is destroyed
Obligation is contracted as result of violence or threats or duress Pre-existing duty where no motive to reconsider Cause can be absent in part Cause no longer exists |
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When is K null?
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When requirements for formation have not been met (cause, consent, capacity, object)
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When is K absolutely null?
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When it violates rule of public order, as when K is illicit or immoral
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Rule of absolute nullity
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Cannot be confirmed, and court can raise sua sponte
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Relatively null K
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Can be confirmed, relatively null when violates rule intended for protection of private parties, as when party lacked capacity or did not give free consent
Can only be invoked by those persons whose interest ground for nullity was established |
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When is a gambling loan recoverable?
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If no mutual illegal intent to gamble, or not communicated that used for gambling
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How long do you have for action of annulment?
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Action for annulment of absolutely null K does not prescribe, 5 years for relatively null from time nullity ceased (incapacity or duress) or was discovered (error or fraud)
But nullity can be raised at any time as defense against action on K even after action for annulment has prescribed |
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A. 2033
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Absolutely null K or relatively null K declared null deemed never to have existed.
Parties must be restored to situation that existed before K was made. If impossible or impracticable to make restoration in kind, may be made through damages. Performance rendered under K that is absolutely null may not be recovered by party who knew or should have known of defect that makes K null. Performance can be recovered when party that invokes nullity to withdraw from K before purpose of K is achieved and in exceptional situations by ct. Absolute nullity can be used as defense even by party who knew or should have known at time K was made of defect |
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Remission of debt
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Extinguishes obligation, may be express or tacit
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Presumption of intention to remit
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Obligee's voluntary surrender to obligor of instrument evidencing obligation gives rise to presumption of intention to remit
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When is remission of debt effective
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When obligor receives communication from obligee
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Acceptance of remission of debt
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Presumed, unless obligor rejects remission w/in a reasonable time
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Not a presumption of remission of debt
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Release of real security given for performance of obligation
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Voluntary remission of partial fee
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When creditor makes clear intent to accept certain sum in full payment of debt owed, makes voluntary remission of other part of fee
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Remission of debt two general requirements
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Consent, but acceptance presumed
Both parties have capacity |
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Compromise
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For settlement of lawsuit
K where parties, through concession made by one of more of them, settel dispute or uncertainty concerning obligation or other legal relationship |
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Requirements for compromise
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1) Existence of litigation or prospect of
2) Intention to put an end to litigation 3) Reciprocal concessions by parties |
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Form requirements for compromise
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In writing or recited in open court where susceptible of being transcribed from record
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Compromise affecting other things
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If affects transfer or renunciation of rights, parties must have capacity and K meet requirements of form for transfer or renunciation
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Compromise over criminal action
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Civil consequences from criminal act can be object of compromise, but not extinguishment of criminal act itself
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Accord and satisfaction
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Claimant of disputed or unliquidated claim accepts payment other party tenders with clearly expressed written condition that acceptance of payment will extinguish obligation
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One party receives partial payment of compromise but wants to object
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Must give timely notice to other party, can still accept as partial payment disputed amount, but does not give up right to claim disputed amount, other party's silence in this situation imputed to be acceptance
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Compromise precludes
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Parties from bringing subsequent action based upon matter that was compromised
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Compromise rescission
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Can be rescinded for error, fraud, or other grounds for annulment of K's (including all vices), but not error of law or lesion
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Vices of consent
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Error, fraud, or duress (cause relative nullity)
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Requirements for error to vitiate consent
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1) Concerns cause w/o which obligation would not have been incurred
2) Cause was known or should have been known to other party 3) Error was excusable |
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Error concerns cause when
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Bears on nature of K, or thing that is contractual object, or substantial quality of thing, or person or qualities of other party, or law, or any other circumstances that parties regarded, or should in good faith have regarded, as cause of obligation
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When can a party not avail himself of an error that would otherwise vitiate consent?
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When other party willing to perform K as intended by party in error
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Liability of party who obtains rescission on grounds of his own error
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Liable for loss sustained by other party unless other person knew or should have known of error
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When may the court refuse rescission for error?
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When effective protection of other party's interest requires that K be upheld, in which case reasonable compensation for loss he sustained may be granted to party whom rescission is refused
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Mutual error
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Rescission of K for mutual error valid as long as 3 elements of error met, consent on both sides vitiated in this case
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Example of something which is not an excusable error
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Failure to read K- Shreveport
Error in value is not error of fact but error in judgment- Citizen's Bank |
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Fraud
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Misrepresentation or suppression of the truth made w/ intention to obtain unjust advantage for one party or cause loss or inconvenience to other
May also result from silence or inaction |
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Exception to fraud
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Fraud does not vitiate consent when party being defrauded could have ascertained the truth w/o difficult, inconvenience, or special skill
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Exception to the exception for fraud
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Exception of "could have found out" doesn't apply when relation of confidence reasonably induced party to rely on other's assertions or representations
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Error induced by fraud must concern
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Doesn't have to concern cause to vitiate consent, but must concern circumstance that has substantially influenced consent
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Fraud committed by 3rd person
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Vitiates consent of contracting party if other party knew or should have known of fraud
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Fraud, burden of proof
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Preponderance of evidence, can be established by circumstantial evidence
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Fraud: Damages
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Party against whom rescission is granted bc of fraud is liable for damages and attorneys fees
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Duress
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To vitiate consent, must be of such nature as to cause reasonable fear of unjust and considerable injury to a party's person, property, or reputation
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Circumstances taken into account for duress
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Party's age, health, disposition, and other personal circumstances, but in degree of violence or character of threats considered and weighed in reference to men of ordinary composure and nerve, not scales of imaginative alarmists- Oteri
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Duress cannot be
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Emotional strain (Adams) , economic duress (Wilson), threat of lawful act of threat of exercising right, but threat of doing act that is lawful in appearance only may constitute duress
Also, K made w/ 3rd person to secure means to prevent threatened injury may not be rescinded for duress if that person is in GF and not in collusion w/ party exerting duress (ex. K of loan to pay unrelated ranson) |
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Indirect duress
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Duress can also vitiate consent when threatened injury directed against spouse, ascendant, or descendant of contracting party
If threatened injury directed against other person, granting of relief left to discretion of court |
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3rd person duress
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Consent vitiated even when duress exerted by 3rd persons
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3rd party Duress: Recovery
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When rescission granted bc of duress exerted by 3rd person, parties to K who are innocent of duress may recover damages and attorneys fees from 3rd person
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Duress: Recovery
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When rescission granted for duress exerted or known by a party to the K, other party may recover damages and attorney fees
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Object
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Parties can contract for any object that is lawful, possible, and determined or determinable
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Object: Possible or not
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Possible or impossible according to its nature and not according to parties' ability to perform
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Object: Determinable
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Must be determined at least to its kind, quantity may be undetermined providing it is determinable
If determination of quantity is left to discretion of 3rd person, quantity is determinable If parties fail to name 3rd person, or person named unable or unwilling to make determination, quantity may be determined by the court Quantity can be determined by output of one party or requirements of the other |
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Object: Determinable: Output or requirements K
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Output or requirements must be measured in good faith
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Object: Future things
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Future things can be object, but succession of living person cannot other than antenuptial agreement and cannot be renounced
Coming into existence of thing is condition that suspends effects of sale Party who through his fault prevents coming into existence of future thing is liable for damages |
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Object: 3rd person
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Object of K can be 3rd person will incur obligation or render perfomrance
Party who promised obligation or performance liable for damages if 3rd person does not bind himself or does not perform |
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Object: Hope
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"Fisherman's haul in net"; Hope may be object, buyer is entitled to whatever is gained ("Whatever is caught in net"), according to parties' expectations, and even if nothing gained ("caught"), sale is valid
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Stipulation pour autrui
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Party can stipulate as object for benefit of 3rd person, 3rd party beneficiary
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Situations in which stipulation pour autrui arises
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1) Existence of legal relationship between promisee and 3rd person involving obligation owed by promisee to 3rd person which performance of promise will discharge
2) Existence of factual relationship between promisee and 3rd person where a) There is possibility of future liability either person or real on part of promisee to beneficiary against which performance of promise will protect the former b) Securing an advantage for 3rd person may beneficially affect the promisee in a material way c) There are ties of kinship or other circumstances indicating that benefit by way of gratuity was intended |
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Most important factor in stipulation pour autrui
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Relationship between stipulator and third person, even more important than parties' words
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3rd party rights in stipulation pour autrui
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Once third party has manifested intention to avail himself of benefit, parties may not dissolve K by mutual consent w/o beneficiary's agreement
Stipulation gives 3rd party beneficiary right to demand performance from promisor Stipulator, for benefit of 3rd party, can demand performance from promisor Acceptance of benefit does not have to be expressand lawsuit can be acceptance of stipulation (Andrepoint) |
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Revocation of stipulation in Stipulation pour autrui
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Stipulation can be revoked only be stipulator and only before 3rd party has manifested intention of availing himself of the benefit
If promisor has interest in performing, stipulation may not be revoked w/o his consent If stipulation revoked or refused, promisor shall render performance to the stipulator |
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Stipulation pour autrui: defense
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Promisor can raise against beneficiary same defenses he could have raised against the stipulator
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Incidental beneficiary:
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Party who, though having an interest related to a K between other parties, is not a 3rd party beneficiary in that K, does not have an action arising from that K
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To determine if stipulation pour autrui or incidental beneficiary
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(Joseph case)
1) Stipulation for 3rd party is manifestly clear 2) There is certainty as to benefit provided the 3rd party 3) Benefit is not mere incident of K between promisor and promisee |
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Capacity
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All persons have capacity to K, except unemancipated minors, interdicts, and PDR's at time of contracting
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K made w/o capacity
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relatively null and may be rescinded only at request of that person or his legal representative
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Capacity as grounds for rescission
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See K made w/o capacity, but also
Immediately after discovering incapacity, party who at time of contracting was unaware of incapacity of other party may require other party, if incapacity has ceased or from legal representative if it has not, that K be confirmed or rescinded If K is rescinded bc of incapacity, parties restore to other what he has received, when restoration impossible or impracticable, court may award compensation to party whom restoration cannot be made |
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Fully emancipated minor
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Has full contractual capcity
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K for incapacity cannot be rescinded when
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K was made for purpose of providing unemancipated minor with something necessary for support or education, or purpose related to his business
Also see mere representation of majority |
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Mere representation of majority
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By unemancipated minor does not preclude action for rescission of K, if other party reasonably relies on minor's representation of majority, K cannot be rescinded
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Noninterdicted person who was PDr at time of contract
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Can obtain rescission of onerous K upon ground of incapacity only by showing other party knew or should have known that person's incapacity
K made by noninterdicted PDR at time of K can be attacked after his death on ground of incapacity when K was gratuitous, or evidences lack of understanding, or made w/in 30 days of death, or when application for interdiction filed before his death |
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Interdiction
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Must be declared by court
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Putting the obligor in default: Delay
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Damages for delay in performance owed from time obligor put in default
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Putting the obligor in default: defective performance
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Damages for defective performance owed from time obligor has failed to perform
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Putting the obligor in default: nonperformance
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Damages for non performance owed from time obligor has failed to perform
If obligee bears risk of thing that is object of performance, risk devolves upon obligor put in default for failure to deliver the thing |
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When is obligor put in default?
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When term for performance is fixed or clearly determinable by circumstances, and term arrives
No term fixed or determinable, obligee puts obligor in default after performance is due |
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How to put in default?
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Written request of performance or oral request of performance made before two witnesses, or by filing suit for performance, or by specific provision in K
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Putting in default: reciprocal obligations
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If reciprocal obligation, obligor of one may not be put in default unless obligor of the other has performed or is ready to perform his own obligation
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Judicial dissolution
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When obligor fails to perform, obligee has right to judicial dissolution of K, or according to circumstances, to regard K as dissolved.
In either case, obligee can recover damages Obligor who failed to perform may be granted extension to perform, according to the circumstances |
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Judicial dissolution: partial performance
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K may not be dissolved when obligor has rendered substantial part of performance and part not rendered does not substantially impair interest of obligee
If partial performance rendered and that performance is of value to party seeking dissolution, dissolution does not preclude recovery for that performance |
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Judicial dissolution: notice to perform
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Upon failure to perform, obligee may serve notice to perform, within a certain time, with warning that unless performance rendered w/in that time K is dissolved
Time allowed for this purpose must be reasonable according to the circumstances Notice to perform subject to requirements governing putting obligor in default and for recovery of damages for delay shall have same effect as putting obligor in default |
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Judicial dissolution: Contractual Agreement
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Parties may expressly agree that K shall be dissolved for failure to perform, in which case K dissolved at time it provides for, or in absence of such a provision, at time obligee gives notice to obligor that he avails himself of the dissolution clause
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Judicial dissolution: Effects
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Parties shall be restored to situation that existed before K was made, if restoration in kind impossible or impracticable court may award damages
If partial performance rendered and that performance is of value to party seeking dissolution, dissolution does not preclude recovery for that performance |
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Judicial dissolution: Effects: Continuous or periodic performance
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In K's for continuous or periodic performance, effect of dissolution shall not be extended to any performance already rendered
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Judicial dissolution: Effects: Multiple parties
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If K made by more than 2 parties, one party's failure to perform may not cause dissolution of K for other parties, unless performance that failed was essential to K
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Judicial dissolution: Effect: 3rd parties
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Dissolution of K does not impair rights acquired through onerous K by 3rd party in GF, if K involves immovable property, public records doctrine applies
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Judicial dissolution: Effects: communtative K
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Either party to commutative K may refuse to perform obligation if other has failed to perform or does not offer to perform his at same time, if performance due simultaneously
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Judicial dissolution: Effects: Security
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If situation of party has become such as to clearly endanger ability to perform obligation, other party may demand in writing that adequate security be given and upon failure to give that security party may withhold or discontinue his own performance
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Judicial dissolution: K for unspecified duration
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May be terminated at will of either party by giving notice, reasonable in time and form, to the other party
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Specific performance
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Preferred remedy at civil law
Upon obligor's failure to perform obligation to deliver a thing, or not to do an act, or to execute an instrument, court shall grant specific performance plus damages for delay if obligee demands If specific performance impracticable, court may allow damages to obligee |
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When is specific performance at discretion of the court?
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Upon failure to perform obligation that has another object, such as object to do, but obligor may be restrained from doing anything in violation of obligation not to do
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Damages: Generally
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A. 1994: Obligor liable for damages caused by his failure to perform a conventional obligation that results from nonperformance, defective performance, or delay in performance
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Damages: Measurement
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Measured by loss sustained and profit deprived
When insusceptible of precise measurement, much discretion left to court for reasonable assessment of those damages Red Arrow- rare case where ct. allows projected damages cuz of strong evidence |
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Damages: Obligor in GF
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Only liable for damages foreseeable at time K was made
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Damages: Obligor in BF
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Liable for all damages, foreseeable or not, that are direct consequence of his failure to perform
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Damages: Measurement: Object is sum of money
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Damages for delay measured by interest on that sum from time it is due, at rate agreed by parties
In absence of agreement, rate fixed by statute |
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Damages: Burden of proof
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Obligee can recover damages where object is sum of money w/o having to prove loss, but can't recover more than loss suffered.
Obligee also entitled to attorneys fees if agreed in fixed or determinable amount by parties |
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Damages: Obligee's duties
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Must make mitigation efforts or else obligor may demand damages be accordingly reduced
Obligee cannot recover damages when his own BF has caused obligor's failure to perform or when at time of K he has concealed from obligor facts that he knew or should have known would cause failure If obligee's negligence contributes to obligor's failure to perform, damages reduced in proportion to that negligence |
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BF for Damages
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Intentionally and maliciously fails to perform obligation, probably done with purpose to injure other party
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Damages: Null clauses
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Any clause null that in advance excludes or limits liability of one party for intentional or gross fault that causes damage to other party
Any clause null that in advance excludes or limits liability of one party for causing physical injury to other party |
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Damages: Requirements
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Obligee must show
1) Existence of damages 2) Obligor at fault 3) Cause-effect relationship |
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Damages: Measurement for breach of sale
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Difference between K price and market price on date of breach
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Punitive damages, Nominal damages
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Punitive rarely given, only by statute
Cts. grant nominal damages in rare circumstances where plaintiff fails to prove damages alleged to have sustained or sustained no pecuniary damages |
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Stipulated damages: Generally
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Parties may stipulate damages and this gives rise to secondary obligation for purpose of enforcing principal one
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Stipulated damages: Nullity
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Nullity of principal obligation renders stipulated damages null, but nullity of stipulated damages clause does not render principal obligation null
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Stipulated damages: Restriction on request
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Obligee may demand either stipulated damages or performance but not both unless damages have been stipulated for mere delay
Obligor whose failure to perform obligation justified by valid excuse also relieved of liability for stipulated damages |
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Stipulated Damages: Burden of proof
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Obligee who avails himself of stipulated damges clause doesn't have to prove damage caused by obligor's delay, defective, or non performance
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Stipulated Damages for delay
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obligee may not avail himself of stipulated damages for delay unless obligor put in default
Party does not get stipulated damages for a delay he causes |
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Stipulated Damages for Non Performance
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May be reduced in proportion to benefit derived from obligee from partial performance rendered by obligor
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Stipulated Damages: Modification
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May not be modified in court unless so manifestly unreasonable as to be against public policy
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Moratory damages
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Temporary nonperformance that can be cured w/ subsequent performance + damages
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Stipulated Damages: Breach of K with specific term
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Putting in default not needed for breaches of K stipulating they must be executed w/in a specific time, where time is of the essence, or where a specific time for performance expires
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Nonpecuniary damages
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Can be recovered when K bc of nature is intended to gratify nonpecuniary interest and bc of circumstances surrounding formation or nonperformance of K, obligor knew or should have known that his failure to perform would cause that kind of loss.
Regardless of nature of K, nonpecuniary damages may be recovered when obligor intended, through his failure, to aggrieve the feelings of the obligee |
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Real obligation
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Duty correlative and incidental to real right
Transferred to successor who acquires thing to which obligation is attached w/o special provision Particular successor not personally bound, unless he assumes personal obligation of his transferor w/r/t the thing, and may liberate himself of real obligation by abandoning the thing |
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Heritable obligations
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Obligation is heritable when performance may be enforced by successor of obligee or against successor of obligor.
Every obligation is deemed heritable as to all parties, except when contrary results from terms or nature of K |
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Strictly personal obligation
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When performance can be enforced only by obligee or only against obligor
When performance intended for benefit of obligee exclusively, obligation is strictly personal on the part of that obligee |
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Presumption of strictly personal obligation
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When performance requires special skill or qualification of obligor, obligation presumed to be strictly personal on part of obligor, and thus all obligation to perform personal sservices presumed to be strictly personal
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Conditional obligations: Generally
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Obligation dependent on uncertain event
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Suspensive condition
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Obligation may not be enforced until uncertain event occurs
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Resolutory condition
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Obligation may be immeidately enforced but will come to an end when uncertain event occurs
If depends solely on the will of obligor, must be fulfilled in GF |
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Conditions: form
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Can be expressed or implied by law, nature of K, or intent of parties
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Suspensive condition that makes obligation null
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Suspensive condition that is unlawful or impossible
Suspensive condition that depends solely on whim of obligor, but not all |
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Potestative conditions
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Suspensive condition that depends solely on whim of obligor, normally makes obligation null
But if condition though dependent on will and power of obligor involves some detriment, disadvantage, or inconvenience to obligor if he brings about or hinds the happening of the event, condition does not render obligation null |
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Obligee's rights in condition
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Pending fulfillment of condition may take all lawful measure to preserve his right
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Condition: Default fulfillment
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Regarded as fulfilled when it is not fulfilled bc of fault of party w/ interest contrary to fulfillment
Regarded as fulfilled if condition is that event shall not occur w/in fixed time and time has elapsed w/o event occurring Fulfilled whenever it is certain that event will not occur, whether or not time fixed |
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Condition: Default failure
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Regarded as failed if condition is that event shall occur w/in fixed time and that time elapses w/o occurrence of the event
Condition is that event shall occur and it is certain that event will not occur |
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Condition: time for fulfillment if not fixed
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If no time fixed for occurrence of event, condition may be fulfilled w/in a reasonable time
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Term of obligation
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May be express or implied by nature of K, performance of obligation not subject to term is due immediately
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Term of obligation: uncertain
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Uncertain when not fixed but determinable by either intent of parties or occurrence of future and certain event
Also uncertain when not determinable, in which case obligation must be performed w/in a reasonable time Performance on term must be in accordance w/ intent of parties or w/ established usage when intent cannot be ascertained |
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Term of obligation: Presumption
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Presumed to benefit the obligor unless agreement or circumstances show that it was intended to benefit obligee or both parties
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Term of obligation: Renouncement
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Party for whose exclusive benefit term has been established may renounce it
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Term of obligation: recovery
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Obligor who has performed voluntarily before term ends may not recover performance
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Term of obligation: Insolvency
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When obligation is such that performance requires solvency of obligor, term is regarded as nonexistent if obligor is found to be insolvent
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Term of obligation: Period of time
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When term for performance not marked by specific date but period of time, term begins to run on day after K is made, or on day after occurrence of event that marks beginning of term, and includes last day of period
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Conjunctive obligation
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Obligation is conjunctive when it binds obligor to multiple items of performance that may be separately rendered or enforced, each item regarded as object of separate obligation
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Conjunctive obligation: Failure of performance
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Parties may provide that failure of obligor to perform one or more items shall allow obligee to demand immediate performance of remaining items
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Alternative obligation
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Obligation is alternative when obligor is bound to render only one of two or more items of preference
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Alternative obligation: choice of performance
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When obligation is alternative, choice of item of performance belongs to obligor unless it has been expressly or impliedly granted to obligee
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Alternative obligation: failure to select
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When party who has choice does not exercise it after demand to do so, other party may choose item of performance
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Alternative obligation: Impermissible performance
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Obligor may not perform alternative obligations by rendering as performance a part of one item and part of another
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Alternative obligations: Default choice- obligor
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When choice belongs to obligor and one is impossible or unlawful regardless of his fault must render the other one
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Alternative obligations: Default choice- obligee
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When choice belongs to obligee and one becomes impossible or unlawful w/o fault of obligor, obligee must choose one of items that remain
If w/ fault of obligor, obligee may choose either that remain, or damages for item of performance that became impossible or unlawful |
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Alternative obligations: All options impossible
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If all items of performance impossible or unlawful w/o obligors fault, obligation is extinguished
When choice belongs to obligor, if all items become impossible and impossibility of one or more is due to fault of obligor, he is liable for damages resulting from failure to render last item that became impossible If impossibility of one or more items is due to fault of obligee, obligor is not bound to deliver any of the items that remain |
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Several obligation
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Many obligors owe separate performance to one obligee or one obligor owes separate performance to each of different obligees; same effects as separate obligations owed
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Joint obligation
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Different obligors owe one performance to one obligee, but neither bound for the whole, obligation is joint for obligors
One obligor owes performance for common benefit of different obligees, neither or whom entitled to whole performance, obligation is joint for obligees Joint obligation can be divisible or indivisible Divisible= each bound to perform and receive only his portion Indivisible= subject to rules for solidary obligors/obligees |
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Solidary obligations
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Obligation is solidary for obligees when gives each obligee right to demand whole performance from common obligor
Obligation solidary for obligors when each obligor liable for whole performance |
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Solidary obligations: Extinguishment of obligation by single obligor
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Before solidary obligee brings action for performance, obligor may extinguish obligation by rendering performance to any solidary obligees
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Solidary obligations: Remission of debt
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Remission of debt by one solidary obligee releases the obligor but only for the portion of that obligee
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Solidary obligations: Prescription
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Any act that interrupts prescription for one of the solidary obligees benefits all the others
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Solidary obligatoins: Performance rendered by obligor
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Performance rendered by one of the solidary obligors relieves the others of liability toward the obligee
Obligee at his choice may demand whole performance from any of solidary obligors, solidary obligor may not request division of debt |
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Solidary obligations: presumption
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Solidarity of obligation not presumed, but arises from clear expression of parties' intent or from the law
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Solidary obligations: Effects: Failure to perform
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Failure to perform soildary obligation through fault or one obligor renders all obligors solidarily liable for resulting damages; obligors not at fault have remedy against obligor at fault
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Solidary obligations: Effects: Renunciation of solidarity
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Renunciation of solidarity by obligee in favor of one or more of obligors must be express
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Solidary obligatoins: Effects: Partial performance
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Obligee who receives partial performance from obligor separately preserves solidary obligation against all obligors after deduction of partial performance
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Solidary obligations: Effects: Remission of debt, Compromise
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Remission of debt by obligee in favor of one obligor, or transaction or compromise between obligee and obligor benefits other solidary obligors in amount of that portion of obligor
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Solidary obligations: surrender of instrument evidencing obliations
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Surrender to one solidary obligor of instrument evidencing obligation gives rise to presumption that remission of debt intended for the benefit of all the solidary obligors
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Solidary obligations: effects: insolvency
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Loss arising from insolvency of solidary obligor must be borne by other solidary obligors in proportion to their portion
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Solidary obligations: effects: Renunciation of solidarity
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Any obligor in whose favor solidarity has been renounced must nevertheless contribute to make up for the loss
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Assumption of obligation
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Obligor and third person may agree to assumption by latter of obligation by former. To be enforceable by obligee v. 3rd person, agreement must be in writing
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Assumption of obligation: effect as to original obligor
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Obligee's consent to agreement of assumption does not effect release of obligor, and unreleased obligor remains solidarily bound w/ 3rd person
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Assumption of obligation: 3rd party who assumes obligor's obligation
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Person who by agreement w/ obligor assumes obligation is bound only to extent of his assumption, and may raise any defense based on K by which assumption was made
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Assumption of obligation: Obligee and 3rd person
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Obligee and 3rd person may agree on assumption by latter of obligation owed by another to the former, but must be in writing and does not effect release of original obligor
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Assumption of obligation: 3rd party who assumes obligee's obligation
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Person who by agreement w/ obligee has assumed another's obligation may not raise against obligee any defense based on relationship between assuming obligor and original obligor
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Subrogation
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Obligation extinguished w/r/t original creditor (obligee) by payment which he has received from 3rd person or from debtor himself but w/ funds that 3rd person has furnished to that affect, is regarded as subsisting in favor of this third person who is entitled to assert the rights and actions of the ancient creditor
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Extinction of obligations: Performance
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Performance by obligor extinguishes obligation
Performance may be rendered by third person, even against will of obligee, unless obligor or obligee has interest in performance only by obligor Performance rendered by 3rd person affects subrogation only when so provided by law or agreement |
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Extinction of obligations: Transfer of a thing
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Obligation that may be extinguished by transfer of a thing is not extinguished unless thing has been validly transferred to obligee
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Extinction of obligation: Performance to unauthorized person
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Performance must be rendered to obligee or to person authorized by him, but performance rendered to unauthorized person valid if obligee ratifies
In absence of ratification, performance rendered to unauthorized person is valid if obligee has derived a benefit from it, but only for amount of benefit |
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Extinction of obligation: Performance to obligee w/o capacity
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Performance rendered to obligee without capacity to receive it is valid to extent of benefit he derived from it
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Extinction of obligation: Performance: Object
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When performance consists of giving a thing that is determined as to its kind only, obligor need not give one of the best quality but may not tender one of the worst
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Extinction of obligation: Partial performance
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Obligee may refuse to accept partial performance, but if amount of obligation to pay money is disputed in part and obligor willing to pay undisputed part, obligee may not refuse to accept that part
If obligee is willing to accept undisputed part, obligor must pay it. Either way obligee preserves right to claim disputed part |
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Extinction of obligation: Performance: Place
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Performance must be rendered in place either stipulated in agreement or intended by parties according to usage, nature of performance, or other circumstance
In absence of agreement or other indication of parties' intent, performance of obligation to give individually determined thing shall be rendered at place the thing was when obligation arose. If obligation is of any other kind, performance shall be rendered at domicile of the obligor. |
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Extinction of obligation: Performance: Expenses
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Expenses required to render performance are borne by the obligor
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Impossibility of performance: Obligor's liability
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Obligor not liable for failure to perform when caused by FE that makes performance impossible, but is liable for failure to perform when he has assumed risk of fortuitous event.
Obligor is liable when FE occurred after he has been put in default, and liable when FE that caused failure to perform has been preceded b his fault, w/o which failure would not have occurrred |
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Impossibility of performance: FE destroys object
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Obligor who had been put in default when FE made performance impossible is not liable for failure to perform if FE would have destroyed object of performance in hands of obligee had performance been timely rendered, but still liable for damage caused by delay
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Impossibility of performance: Fortuitous Event
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FE is on that at the time K was made, could not have reasonably foreseen
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Impossibility of performance: Entire performance impossible
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When entire performance owed by one party has become impossible bc of FE, K is dissolved and other party can recover any performance already rendered
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Impossibility of performance: Partial performance possible
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When FE has made party's performance impossible in part, court may reduce other party's counterperformance proportionally, or according to circumstances may declare K dissolved
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Impossibility of performance: K dissolved
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If K dissolved bc of FE that occurred after obligor has performed in part, obligee is bound but only to extent he was enriched by obligor's partial performance
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Novation
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Extinguishment of existing obligation by substitution of a new one
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Novation: requirements
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Intention to extinguish original obligation must be clear and unequivocal
Novation is not assumed |
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Novation: when it occurs
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Takes place when by agreement of parties new performance is substituted for that previously owed, or new cause is substituted for that of original obligation
If any substantial part of original performance owed, no novation Novation also takes place when parties expressly declare their intention to novate an obligation Mere modification of obligation, made w/o intention to extinguish it, does not effect novation NOvation can take place when new obligor is substituted for prior obligor who is discharge by obligee, in this case can be done w/o consent of prior obligor unless they had interest in performing themselves |
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Novation: Obligation Null
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Novation has no effect when obligation does not exist or is absolutely null, but if obligation is relatively null, novation is valid, provided obligor of new one knew of defect of extinguished obligation
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Novation: Security Given
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Security given for performance of extinguished obligation may not be transferred to new obligation w/o agreement of parties who gave security
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Novation: Solidary obligations
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Novation made by obligee and one of obligors of solidary obligation releases other solidary obligors
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Novation: 3rd party
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Delegation of performance by obligor to 3rd person effective when that person binds himself to perform, but effect novation only when obligee expressly discharges original obligor
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Novation: Discharge and Security
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If new obligor has assumed obligation and acquired thing given as security, discharge of any prior obligor by obligee does not affect security
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Compensation
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Takes place by operation of law when two persons owe to each other sums of money or quantities of fungible things identical in kind, and these sums or quantities are liquidated and presently due
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Compensation: Extinguishment
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In case of compensation, compensation extinguishes both obligations to extent of lesser amount, delays of grace do not preven this
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Confusion
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When qualities of obligee and obligor are united in the same person, obligation is extinguished by confusion
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Simulation
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K is a simulation when by mutual agreement it does not express true intent of the parties, and if true intent of parties is expressed in separate writing, that writing is a counterletter
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Simulation: Absolute
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A simulation is absolute when parties intend that their K shall produce no effect between them, and thus can have no effects between parties
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Simulation: Relative
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Simulation is relative when parties intend that their K produces effects between them though different from those recited in their K
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Simulation: Effects
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Relative simulation produces between parties the effects they intended if all requirements for those effects have been met
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Simulation: 3rd persons
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Any simulation may have effects as to 3rd persons, but counterletter can have no effects against 3rd persons in GF
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Simulation: presumption
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If the seller keep the thing sold, act is presumed to be a simulation
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Nullity: Provisions
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Nullity of provision does not render whole K null unless from nature of provision or intention of parties it can be presumed that K would not have been made w/o null provision
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Nullity: 3rd parties
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Nullity of K does not impair the rights acquired through onerous K by 3rd party in GF
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Revocatory action
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Obligee has right to annul act of obligor or result of failure to act of obligor made or effected after right of obligee arose that causes or increases the obligor's insolvency
Action of obligee must be brought w/in 1 yr from time he learned or should have learned of act, or result of failure to act, of obligor that obligee seeks to annul, but never after 3 years from date of that act or result |
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Oblique Action
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If obligor causes or increases his insolvency by failing to exercise right, obligee may exercise it for him, unless right is strictly personal to obligor
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Revocatory Action: Onerous K
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Obligee may annul onerous K made by obligor w/ person who knew or should have known that K would cause or increase obligor's insolvency; in that case person is entitled to recover what he gave in return only to extent that it has inured to the benefit of obligor's creditors
Obligee may annul onerous K made by obligor w/ person who did not know that K would cause or increase insolvency, but then person entitled to recover as much as he gave to obligor Lack of knowledge presumed when that person has given at least four-fifths of the value of the thing obtained in return from the obligor |
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Revocatory Action: Gratuitous K
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Obligee may attack a gratuitous K made by obligor whether or not other party knew that K would cause or increase obligor's insolvency
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Revocatory Action: Other K's
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Obligee may not annul K made by obligor in regular course of his business
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Lesion: What it applies to
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Lesion can only be claimed by seller and only in sales of corporeal immovables
Lesion cannot be alleged in sale made by order of the court Seller may invoke lesion even if renounced the right to claim it |
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Lesion: Sale of immovable
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Sale of immovable may be rescinded for lesion when price is less than 1/2 FMV of immovable
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