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C.C. Article 1756 – Obligations; definition
1)An obligation is a legal relationship whereby a person, called the obligor, is bound to render a performance in favor of another, called the obligee. Performance may consist of giving, doing, or not doing something
2)Every obligation contains a duty, as a necessary element, but not every duty amounts to an obligation
3)There is in every obligation an active subject, the creditor or oblige, to whom the right to demand performance belongs, and a passive subject, the debtor or obligor, who is under the duty to perform
4) Classifications of Obligations
Classifications of Obligations
a. obligation to give – obligor binds himself to transfer to the oblige the ownership of a thing
b. obligation to do – obligor binds himself to carry out or execute an act
c. obligation not to do – obligor binds himself to abstain from undertaking a certain course of action
Salles v Stafford
When a proposal for the sale of property provides a provision which allows the Δ, at his discretion, to cause a new map or
resurvey to be made of the property, providing the same number of square feet and location be retained, the agreement of the sale is not a nullity for uncertainty of the property sold or as containing a potestative condition.
Sources of Obligations - C.C. Article 1757
1) Obligations arise from contracts and other declarations of will. They also arise from the law, regardless of a declaration of will, in instances such as wrongful acts, the management of the affairs of another, unjust enrichment and other acts or facts.
2) Four sources
i. contracts – willful and lawful acts where people agree to bind themselves by obligation
ii. quasi-contracts – without agreement of persons involved which is necessary for the formation of a contract
iii. delicts – intentional torts
iv. quasi-delicts – negligent acts (unintentional torts)
Harrison v Gore
When a student is molested and sexually harassed by a former coach and the alleged act occurred 8 years before the institution of a suit, the nature of the duty breached determines whether the action is in tort or in contract. If in tort, a one year prescriptive period applies and 10 years if in contract.
C.C. Art 1927 - Consent
A contract is formed by the consent of the parties established through offer and acceptance. Unless the law prescribes a certain formality for the intended contract, offer and acceptance may be made orally, in writing, or by action or inaction that under the circumstances is clearly indicative of consent. Unless otherwise specified in the offer, there need not be conformity between the manner in which the offer is made and the manner in which the acceptance is made.
Four elements required for a valid contract
a. parties must have legal capacity to contract
b. parties’ mutual consent must be freely given
c. there must be a lawful cause or purpose
d. the object of the contract must be lawful, possible and determined or
determinable
Belgard d/b/a Belgard Construction Co. v Collins
If a store owner who has suffered damage to property due to a tornado, has a belief that a contractor is merely submitting a bid on the job, while the contractor
believes he has by his actions been hired as a consultant, there is not a
“meeting of the minds”, thus no valid contract has been formed.
Expressing Consent
a.Express – words (verbal or written)
b.Implied – conduct or performance
c.Silence or inaction
North LA Milk Producers v The Southland Corp
When a merchant, on
request, sends a price list to a customer who orders goods in accordance
with the price list, there is a contract formed between them for the price
and upon conditions mentioned in the price list. (Implied consent)
Marine Ins. Co., Ltd of London, Eng v Rehm
A proprietor of a parking
lot who collects fees for parking automobiles is considered a compensated depository and is obligated to take as good care of the deposited cars as he would his own.
Cashio v Amco Transmission
When a person parks his vehicle in an unattended lot, with signs posted informing of same and retains his keys, a contract of deposit does not exist, one is hiring or letting out space, thus releasing the lot from the obligations or responsibilities of a depository for losses.
Note Statute:
1. Retain keys
2. Person knows lot is unattended
The Offer
1) Unilateral declaration of will that a person, the offeror,to addresses another, the offeree, whereby the former proposes to the latter the conclusion of a contract
2) Advertisement in newspapers catalogues sent by mail, handbills
1) mere invitations to invite negotiations or entice offers
2) In Louisiana, may constitute an offer susceptible of giving rise to a binding contract upon acceptance when involving contests and prizes
3) Offer may be made by action without words and, under certain circumstances, even by inaction
Johnson v Capital City Ford Co. Inc.
When a car dealer places a newspaper advertisement to lure customers onto his lot and the wording used in
the advertisement is specific to the offer; the offeror is bound by the obligation previously offered by him in exchange for the act which the obligee has performed in response to the offer.
North Central Utilities, Inc. v Walker Comm Water System, Inc.
Requests for bids are considered only as invitations to others to make offers. For a proposal to constitute an offer, it must firmly reflect the intent of the author to enter into a contract.
Duration of the Offer
1) Proposition to enter into a contract is not intended to remain open indefinitely or for an unreasonably long period of time
Schulingkamp v Aicklen
When an offeror manifests intent to give the offeree a delay within which to accept his offer, without specifying a time, the offer is irrevocable for a reasonable time.
Meyers v Burger King Corp
When an offer is said to last “at least 45 days” the court says that that is not a specified period of time and the court will determine a reasonable time which may be beyond that noted period.

CC. art 1928
CC. art 1928
An offer that specifies a period of time for
acceptance is irrevocable during that period of time. CC art 1934-
an acceptance of an irrevocable offer is effective when received
by the offeror.
Heroman v Saia
When a custom prevails in the bldg trade to the effect
that a subcontractor’s bid to a general contractor, in the absence of a pro-
vision to the contrary, may be considered irrevocable after it has been used in preparation of the general contractor’s bid to the owner, and has been
accepted by the owner prior to the attempted revocation by the subcontractor.
Irrevocable Offer (1-3)
1) In LA law, an offer that specifies a period of time for acceptance is irrevocable during that time.
2). Even when no time for acceptance is named in the offer the offeror may be bound not to revoke. That is the case when he has manifested an intent to give the offeror a delay within which to accept, though without specifying a time. In such a situation the offer is irrevocable for a reasonable time.
3) If the parties negotiate face to face, in the absence of any indication to the contrary, the intended reasonable time may be no longer than the time during which they remain together.
Irrevocable Offer (4-6)
4) If the parties communicate by correspondence, the time required for their messages to arrive in destination must be regarded as a minimum reasonable time.
5) The nature of the contractual object comes into the picture also, since an offer involving commodities subject to a rapidly fluctuating market calls for an acceptance made within a reasonable time shorter than the reasonable time needed to accept an offer involving immovable property or other things the price of which is less volatile.
6) An offeror is bound not to revoke an irrevocable offer, but only from the time that offer comes to the knowledge of the offeree, which means that, before the offeree acquires such knowledge, the offeree, the offeror may revoke his irrevocable offer if he succeeds in overtaking it by a revocation sent by a faster means.
Revocable Offer – operate in good faith
When the offeror does not specify a period of time for acceptance, or when he does not otherwise manifest an intent to give the offeree a delay within which to accept, the offer may be revoked before it is accepted.
Liability for Revocation of an Irrevocable Offer
1) LA courts do grant recovery of the full contractual benefit when offers intended as irrevocable are untimely revoked, thereby affording protection to the positive contractual interest, or expectation interest.
2) A contract may be formed under the law of LA in spite of the dissent of one of the parties.
Option Contracts
1) An option is a contract whereby the parties agree that one of them, the grantor of the option or offeror is bound by his offer for a specified period of time and that the other, the grantee of the option or offeree, may accept or reject the offer within that time.

2) How do options contracts and irrevocable offers differ?
(a) Option Contracts
• is a contract
• does not expire at death
• can be assigned
(b) Irrevocable offer
• is not a contract
• expires at death of either the offeror or the offeree
• cannot be assigned
Glover v Abney
Π says Δ, when alive, created an option contract to sell
land within 5 years. If it was an irrevocable offer then there is no agree-
ment (thus no option), only a unilateral declaration of will. To be valid as
as option, the instrument must be supported by a valuable consideration.
The instrument does not recite a consideration and evidence showed there
was no consideration, thus merely a naked promise to sell.
Specified Period of Time
(a) In LA law, thus, a specified time is a requirement for the validity of an option. There is no such requirement for a valid irrevocable offer.
(b) An option may be valid, though no time has been specified for its duration, when it is given in connection with another contract that has a specified duration of its own. In that case the option is valid for as long as the other contract remains in force.
Example: An option contained in a lease is valid for the
duration of the lease even if no time has been
specified for the option.
Consideration
(a) Cause, rather than consideration, is one of the requirements for
a valid option in Louisiana law.
Right to Accept, Rejection and Counteroffer Under an Option
(a) A counteroffer implies a rejection of the original offer and puts an end to the right to accept it. This is true when the offer is irrevocable.
(b) The grantee of the option, as obligee, is privileged to avail himself of the full length of the term or not.
i. If making a rejection, before the deadline, the grantee is expressing an intent not to avail himself of the time not yet elapsed, clearly amounting to a renunciation of the term.
ii. If a counteroffer is made during the course, but before the expiration, of the time specified in the an option, if the grantee clearly intends to counterpose, rather than to inquire about the grantor’s consent to a possible modification of the offer, then such intent implies a rejection of the original offer and the counteroffer should be handled accordingly.
Right of First Refusal
(a) A right of first refusal is a promise whereby the promisor obligates himself to give the promisee a first choice to make a certain transaction should the promisor ever decide to make that transaction.
Communication of the Acceptance and the Time of Contract Formation
1. Acceptance – general rules
2. Acceptance by performance
3. Acceptance by Silence
4. Nonconforming Acceptance
5. Offer of Reward to the Public
1) Acceptance – general rules
(a) Revocable Offer – Acceptance of a revocable offer is effective when the offeree transmits it (mail box rule), so long as the acceptance is made in a manner and by a medium suggested by the offer or in a reasonable manner, which is one used customarily in similar transactions at the place and time the offer is received.

(b) Irrevocable Offer – Acceptance of an irrevocable offer is effective when the offeror receives it, which occurs when the acceptance comes into the offeror’s possession.
2) Acceptance by performance
(a) Acceptance by commencement of performance – If the offeror invites acceptance by performance and it is contemplated that the performance will be completed if commenced, a contract is formed when performance begins.
(b) Acceptance by completion of performance – If an offer can be accepted only by a completed performance, the offeror cannot revoke the offer once performance has commenced for a reasonable time necessary to complete the performance. The offeree, however, is not bound to complete the performance he has begun.
(c) Duty of Offeree to give prompt notice – If the offer is made irrevocable by or is accepted by performance, the offeree must give prompt notice unless the offeror knows or should know that the offeree has commenced performance.
3) Acceptance by Silence
(a) When silence leads the offeror to reasonably believe that the offer has been accepted, the contract is deemed accepted.
4) Nonconforming Acceptance
(a) An acceptance not in accord with the terms of the offer is a counteroffer.
5) Offer of Reward to the Public
(a) Communication to Offeree – An offer of reward made to the public is binding on the offeror regardless of whether the person who performs the requested act knows of the offer.
(b) Revocability of Reward Offers – An offer of reward made to the public is revocable before completion of performance but can be revoked only by the same or equal means used for the offer.
(c) Performance by more than one person – If more than one person has performed the requested act, the reward goes to that person who first gave notice to the offeror of the completion of the performance.
Ryder v Frost
When a party voluntarily offers a sum of money as a mere
goodwill gesture for payment of a debt for a friend, he is bound by his
promise, if the friend’s unequivocal assent is given with in such time as
the situation of the parties and the nature of the contract prove that it was
the intention of the proposer to allow.
Cardinal Wholesale Supply v Chaisson
When co-owners sign personal
guarantees in order for a company to obtain credit for their company and
guarantees contain a waiver of written acceptance, such a waiver does not
eliminate the necessity for an unequivocal assent where it was obvious the
intent of the co-owners was not to guarantee the loan for 8 years later.
Ambrose v M & M Dodge, Inc.
When an attorney negotiates a settle-
ment and his client signs all the settlement documents, but changes his
mind and cancels his signatures, the executed documents must be returned
and received by the offeror in order for the acceptance to be effective.
Ever-Tite Roofing Corp v Green
When a party enters into an agreement
to re-roof his residence with the provision the agreement shall be binding
only upon written acceptance or upon commencement of the work, with
no time, within which it is to be accepted, a reasonable time must be
allowed, in accordance with the facts and circumstances and intent of
the parties for the stated mode of acceptance.
Rodrique v Gebhardt
When a party offers to sale his house, the accep-
tance must conform in all respects to the offer to constitute a contract.
Any modification in the acceptance of an offer constitutes a new offer which must be accepted in order to become a binding contract.
Breaux Bros Construction v Assoc Contractors, Inc.
When parties to a contract verbally agree upon all terms of the alleged contract however agree from the beginning to reduce their negotiations to a written contract, no valid contract would have existed until all parties sign the written document.

*The sale of immovable property must be made in written form,
either by authentic act or by a writing under private signature.
In the absence of a legal requirement of form, parties are free
To express their consent in any manner and to choose to make
Their contract in a certain form even when none is required.
Barchus v Johnson
The acceptance or assent of an option to buy or not to buy immovable property must be evidenced by a written instrument, the acceptance of the offer made in such instrument must equally be evidence in writing, and it must be tendered to the proposer before the time limited in the option has expired.
Requirement of Cause
1) For an obligation to exist, there must be either:
(a) a lawful cause – one not prohibited by law or public policy
(b) detrimental reliance
2) Cause is the reason why a person obligates himself. Cause is the functional equivalent of consideration at common law. Both explain why some promises are enforceable while others are not. CAUSE IS NOT THE SAME AS CONSIDERATION.
Cause as a Criterion for the Classification of Contracts
1) Onerous Contract
2) Gratuitous Contract
3) Bilateral or synallagmatic contract
4) Commutative contract
5) Aleatory Contract
Onerous Contract
a contract is onerous because the reason that prompts the parties to bind themselves is to obtain an advantage in return.
Gratuitous Contract
a contract is gratuitous because the reason that prompts a party to bind himself is to confer a benefit on the other party. (suretyship, mandate, loan for use)
Bilateral or synallagmatic contract
when the reason why a party binds himself is the reciprocal obligation incurred by the other party
Commutative contract
when that reason is the performance of the other party’s obligation
Aleatory Contract
when the reason that prompts a party to incur an obligation is to protect himself against a risk that may not occur, or to procure an advantage that may not materialize
Invalid Gratuitous Contract but Valid Onerous Contract
an act which, as a donation, is invalid for the lack of proper form may be however, a valid onerous contract.
1) If a manual gist is made of a promissory note signed by the donor, the donation is invalid because, the note is an incorporeal thing, a donation thereof must be made by authentic act.
2) If note was not given with donative intent but as recompense for services rendered in the past by the one to whose order the note is made, or in fulfillment of a natural obligation, then the giving of the promissory note, though an invalid donation, is classified as a valid onerous contract.
3) Charitable subscriptions are gratuitous acts and therefore invalid if made by writing under private signature rather than by an authentic act. Nevertheless, since the satisfaction of some interest such as the promotion of the arts or education can be the reason that prompts one to make a charitable subscription, this will suffice to conclude that a charitable subscription not made in authentic form is an enforceable onerous contract.
Invalid Onerous Contract but Valid Gratuitous Contract
1) If no price in a sale is paid, because the parties never intended for the price to be paid, that onerous contract is invalid for the lack of one of its requirements.
2) If an intention to donate immovable property results from the circumstances, and the invalid sale was made by authentic act, the invalid onerous contract is a valid donation.
Invalid Onerous Contract and Invalid Gratuitous Contract
An apparently onerous contract that is invalid for a lack of cause in the obligation on one party may not be a valid gratuitous contract, in spite of the existence of a donative intent, if the requirement of form has not been met.
1) When a promissory note is given for an alleged loan but it is proved such loan was never made and that the maker of the note actually intended to make a gift to the alleged lender, no valid donation can be found if the act was not made by an authentic act.
Donations Inter Vivos
donations given while one is living
Types of donations inter vivos
(a) Purely gratuitous – made without conditions, merely from liberality
(b) Onerous – burdened with charges imposed on the donee;
NOT a real donation, if the value of the object given
does not manifestly exceed that of the charges imposed
on the donee, because then you are not bestowing a
liberality.
(c) Remunerative – to recompense for services rendered
NOT a real donation, if the value of the services to be
recompensed thereby being appreciated in money, should be little inferior to that of the gift; Remunerative donations
usually involve familial or close relationships whereas
natural obligations, such as fulfillment of past debts do not.

Onerous and remunerative donations are not subject to the rules and peculiar to donations inter vivos, except when the value of the object given exceeds by ½ that of the charges or of the services
Spanier v DeVoe
Donation of immovable property – Instead of having a notary and 2 witnesses, had the commissioner sign as a private person. A price which is out of all proportion with the value of the thing sold invalidates the sale, and that such a contract is a donation improperly called a sale.

An act under private signature, though acknowledged, cannot substitute for an authentic act when the law prescribes such an act. The only exception to authentic form for donations is the donations of incorporeal movables such as negotiable instruments (savings certificates and stock transfers)
Succession of Lawrence
When a nephew has helped his uncle for 35
years doing various acts of manual labor and they are very close and the
uncle desires to leave his money to his nephew and manifests his intent to donate by opening a joint bank account and the testament which he had
notarized indicating simply and without elaboration that he wanted his
nephew to have his property, the gift of the money constituted a donation
inter vivos remunerative and onerous donations since the value of the bank
accounts at the time of the uncle’s death did not exceed by ½ that of the services rendered by the nephew and the charges imposed upon him during the uncle’s lifetime.
Perry, Jr v Perry, Sr
When a son directs a sheriff to seize his parents’
personal property to collect a judgment, these actions are sufficient
evidence of ingratitude to support revocation of any donations made to
him such as a substantial amount of stock in the family corporation.
Thielman v Gahlman
When a grantor agrees to convey property in con-
sideration of $1, providing the grantee gives him a home during his
remaining lifetime and bury him when dead with the condition the grantor
should continue to collect and enjoy the revenue of the property to be
conveyed, the contract cannot be invalidated for lack of the existence of a
true and sufficient consideration.
Louisiana College v Keller
When a donor promises to make a charitable
subscription in exchange for the establishment and endowment of a
college in his hometown, the intention of the donor to confer a benefit is
sufficient consideration to bind the promise.
Baptist Hospital v Cappel
When a donor receives the expected benefit from his pledge or subscription and it has not been in anyway lessened or he has not in any way been injured by a change in plans, the donor is bound by his pledge; as when a physician pledges $500 for the building of a new nurse’s home to prevent the school’s standing from being withdrawn and the site of the new school has to be changed.
Flood v Thomas
When a party promises to pay the debt of a 3rd party,
the debt of that party is sufficient consideration to support a contract of surety, or a promise to pay the debt. The promise to pay the debt of the 3rd party must be made in writing.
Absence of Cause
1) If there is no cause, the obligation is ineffectual.
2) Cause is also absent when the obligation is contracted as the result of violence or threats, or duress.
(a) consent given does not express the party’s true will, as that will is being imposed upon and no reason existed, therefore, for the party to bind himself
3) The cause of an obligation may be only partially absent
(a) when the thing sold has perished only in part at the time of the sale.
US Fidelity & Guaranty Co v Crais
When it is clear Δ receives no benefit from an agreement to pay a partial retribution for a friend, the promise to perform the existing contractual obligation to the 3rd party, or the performance of it does not constitute a valid and legal consideration.
*The performance of, or the promise to perform, an existing
legal obligation is not a valid consideration.
Failure of Cause
1) A cause may exist at the inception of an obligation and then fail, thus the obligation ceases to exist
2) A cause may fail only in part.
Carpenter v Williams
A cause may exist at the inception of an obligation and then fail. When such is the case, the obligation ceases to exist as when an employer orders his employee to move closer to work requiring him to purchase a new house and later rescinds his order and then the employee refuses to proceed with the purchase and the seller was aware of the orders being the impetus for the employee’s move.
LoSecco v Gregory
CC art 2450 – Sale of Future Things: A future thing may be the subject of a contract of sale. In such a case, the coming into existence of the thing is a condition that suspends the effects of the sale. A party, who through fault prevents the coming into existence of the thing, is liable for damages. CC art 2451 – Sale of a Hope: A hope may be the object of a contract of sale. Thus, a fisherman may sell a haul of his net before he throws it. In that case the buyer is entitled to whatever is caught in the net, according to the parties’ expectations, and even if nothing is caught, the sale is valid.
Unlawful Cause
1) An obligation must not only have a cause, but that cause must be lawful, that is, neither illegal nor immoral, not contrary to public policy.
(a) illegal – forbidden by law
(b) immoral – runs counter to the moral standard of the community
(c) against public policy – contrary to values recognized as paramount by the community
Lamy v Will
When two parties are involved in a gambling activity and one writes the other a check for money loaned to cover gambling losses, the Π is precluded from maintaining an action for recovery of the money loaned as the cause of the obligation is false or unlawful.
Lauer v Catalanotta
A loan made by a 3rd party to a gambler, where the loan is clearly for the purpose of gambling or repaying a gambling debt will not be an enforceable obligation. However, if the lender is an innocent bystander and has no intent to gamble and is not aware of the other party’s intent to gamble, the agreement is not null and no formal form is required depending on the relationship between the parties.
McMahon v Hardin
When a wife hires a private investigator to obtain evidence of her husband’s infidelity to secure grounds for a divorce and conditions payment upon his finding this proof, and upon getting the divorce the investigator is not paid and sues the wife for hiring him and also the husband as master of the former community, the contract is condemned or void as contrary to public policy.
Gravier’s Curator v Carraby’s Executor
When a party simulates the sales of his property to another to prevent seizure by his creditors and it is made to appear to the world the other is the owner of the property, no action can be maintained to recover the value of the property when sold by the other since the intent of the party was fraudulent and the cause wicked and prohibited by law.
Unlawful Cause - Price of Fraud
NO action lies for the price of fraud. The law, whose mission is to right the innocent and to enforce the performance of licit obligations only, leaves parties who traffic in forbidden things and then break faith with each other to such mutual redress as their own standard of honor may award.

When only one party to a contract engages in doing something illicit, such as rendering services for which he is not licensed, but the other has no reason to know of the unlawfulness, the latter, that is the innocent party, may recover the payment made in performance of his own obligation.
Cahn v Baccich
When one party, in no way participates in a scheme devised by the other and a promise is made in their name though unauthorized, the scheming party is bound by the promise made as when an agent for the party is adjudicated as the last and highest bidder in an auction and his partner schemes with another party to induce that party to abstain from further bidding. The innocent party will be able to recoup!

Freedom of contract to those engaged in an illegal transaction is not curtailed if exercised for a legitimate purpose, separable from and independent of such a transaction and not so closely connected with it as to be infected or tainted by its illegality. “The illegality of one contract does not extend to another contract unless the two are united either in consideration or promise.”
Detrimental Reliance
A party may be obligated by a promise when he knew or should have known that the promise would induce the other party to rely on it to his detriment and the other party was reasonable in so relying.
Detrimental Reliance
1) If the promise was a gratuitous one made without required formalities, then the promisee’s reliance is deemed not reasonable.
2) Recovery under this doctrine is discretionary with the court. The court can limit recovery to either the expenses incurred or the damages suffered by the promise.
3) In Louisiana, there are three (3) elements of detrimental reliance:
(a) a representation by conduct or word
(b) justifiable reliance
(c) a change in one’s position to one’s detriment

ESTOPPELS ARE NOT FAVORED IN OUR LAW!
Hebert v McGuire
– When a physician performs a surgery on a patient with the promise to file an insurance claim in order to be paid, and this promise is made prior to the performance of the surgery, that promise is part of an enforceable contract. However, if the promise to file the insurance claim is made after the surgery, it could be deemed a gratuitous promise in which recovery based on detrimental reliance would reasonably apply.
Edinburgh v Edinburgh
When a homeowner promises to leave a house to a husband and wife upon her death, in exchange for payment of needed repairs and payment of the mortgage until her death and the husband performs as requested however, the homeowner only leaves the house to the wife, the husband who assumed the responsibilities he was under no obligation to assume, he entitled to recover the money he spent on the house as he relied to his detriment upon the homeowner’s promise.
Gray v McCormick
When a father informally promised to his daughter and her husband that he would donate to them five and one half acres of land for them to build a house, a promise he did not fulfill though he allowed them to build such a house, the court concluded that daughter and husband could not recover on the grounds of detrimental reliance because their reliance on the father’s promise had not been reasonable. THE DONATION WAS NOT IN AUTHENTIC FORM.
Applying the Theory of Cause
A. Natural Obligations
B. Remission of Debt
C. Transaction or Compromise
A. Natural Obligations (1-5)
No form is required for natural obligations

1) A natural obligation operates as a cause of an obligation.
2) When a person feels a moral duty that is so strong toward another person, that duty becomes an element of a clearly identifiable relation called a natural obligation.
3) Through his own action, the obligor may promote his natural obligation to a civil one:
a) performing the obligation out of his own free will in which case he may no longer reclaim that performance because the oblige has now a right to keep it, OR
b) by giving the oblige a promise that he will render a performance in which case the oblige now acquires a right to demand performance.

4) Requirements to turn a moral duty to a natural obligation:
a) moral duty felt towards a particular person
b) feels he owes a debt to the person
c) a performance whose object is of pecuniary value
d) perform or promise to perform
e) must not impair public order
5) A natural obligation is not enforceable by judicial action. Nevertheless, whatever has been freely performed in compliance with a natural obligation may not be reclaimed. A contract made for the performance of a natural obligation is onerous.
Thomas v Bryant
When a stepfather executes a promissory note for payment of ½ of his stepson’s alcohol and drug addiction treatment and this note is voluntarily signed while he is married to the stepson’s mother, upon their divorce, he is bound by the note as his natural obligation was turned into a civil one by execution of the promissory note.
1) The stepdad felt a duty was owed to the stepson specifically.
2) The stepdad felt so strongly about the moral duty, he truly felt he owed a debt – he was married to the child’s mother
3) Duty was fulfilled thru rendering a performance of which the object had a pecuniary value- ½ cost of his stepson’s medical treatment
4) Performing the obligation or a promise to perform – executed the promissory note
5) The moral duty was not unlawful
Wortman v French
When a husband, guilty of adultery seeks to transfer a house worth $4500 for $10 along with other goods and valuable consideration to his wife in exchange for a uncontested, quick divorce, this transfer is not a sale nor a legally enforceable obligation because public policy will prevent one spouse from suing another spouse for damages for breach of marital obligations. However, is the donation is to make reparations to the wronged spouse; the obligation would be natural and not able to be nullified by the court.
A. Natural Obligations (6-9)
6) Performance is not recoverable
(a) If the debtor only pays a part of what he owes, the creditor must satisfy himself with that performance spontaneously rendered by the debtor, as he has no action to demand the balance.

7) According to Louisiana jurisprudence, to be enforceable, a debtor’s promise to perform his natural obligation must be clear, distinct and unequivocal, though no particular words need to be used.

8) Where the cause is unlawful, the civil obligation will have no effect.

9) When the necessary requirements are present, the contract that results from the debtor’s promise to perform his natural obligation is onerous. (the debtor’s intent is not to make a gift to the oblige but that he rather intends to pay a debt he feels he owes. He is not promising to give something w/o receiving anything in return, in which case the contract he makes would be a donation, and therefore gratuitous, but he is promising something to compensate the oblige for something else from him received in the past, which suffices to make the contract onerous). Therefore, if the obligor intends to perform his natural obligation by making the kind of onerous contract for which a formality is exceptionally required, like the transfer of immovable property for example, the resulting onerous contract must be made in that form.
Service Finance Co. of BR, Inc. v Daigle
When a debtor files bankruptcy but verbally says he will continue payments after the creditor was properly notified of the bankruptcy proceedings and the creditor based on the promise takes no active role in the bankruptcy, there must be a clear, definite and unequivocal recognition and renewal of the debt to create a binding obligation. The mere knowledge of the discharged debt or the expression of hope, desire, expectation or intention to pay or revive the debt is not sufficient and is considered only recognition of a moral obligation.
Stoll v Goodnight Corporation
A natural obligation cannot be enforced by judicial action, but once a debtor recognizes and freely performs in response to a natural obligation, he cannot recover or reclaim what she has done or paid as when a travel counselor accepts a check containing a forged endorsement which is returned unpaid and she reimburses the company since accepting the check was in violation of company policy and is subsequently terminated two weeks after paying the debt tries to recover the amount paid.
B. Remission of Debt
a remission of debt by an obligee extinguishes the obligation; a forgiveness of the debt by the creditor as it has been put in LA jurisprudence.

1) Remission may be either:
(a) Express – may be made orally or in writing
(b) Tacit – ¹when the creditor speaks no words, as when he destroys the instrument that evidences the obligation in the presence of the debtor; ²when it is the natural result of other words of the creditor, as when he gives the debtor a receipt for the full amount owed w/o having received payment; ³when he returns to the debtor the instrument that evidences the obligation after writing on the back thereof that the debt was canceled for services rendered that the creditor acknowledged as the equivalent of cash.
Hicks v Hicks
The remission of a debt is tacit when the creditor voluntarily surrenders to his debtor the original title under private signature which establishes the obligation. There is no form prescribed for the remission and is presumed always to have been accepted by the debtor and cannot be revoked by the creditor as when a mother takes three notes back from her son and writes “Cancelled for services rendered to me which I acknowledge as the equivalent of cash” which makes them a tacit remission because the son accepted on the spot.
Hurley v Hurley
Donations inter vivos are liable to be revoked or dissolved on account of (1) the ingratitude of the donee; (2) the nonfulfillment of the eventual conditions, which suspend their consummation; (3) the nonperformance of the conditions imposed on the donee as when a father sold land to his son and then took the note from him on the condition that if the son would take care of him for the rest of his life, he would cancel the note however after about 3 months the son so ill-treated, abused and threatened his father using vile and obscene language, the donation of the note can be nullified because of the ingratitude of the son.
C. Transaction or Compromise
1) Transaction – an agreement whereby the parties put an end to litigation or prevent litigation from taking place; needs to be a written agreement in effect; must be a knowing and clear acceptance
2) Requirements:
(c) existence of litigation
(d) the intention of putting an end to it
(e) reciprocal concessions of the parties
3) Compromise – specifically taken as agreements
4) Accord and satisfaction- when approached from the standpoint of the discharge of duties
RTL Corp v Manufacturer’s Enterprises, Inc.
Δ admits it owes a certain undisputed amount. Π claims Δ owes the disputed amount. Δ says there was a compromise transaction when Π signed and cashed his check which read “Payment in full”. Π, however, substituted the words “partial payment” but still cashed the check which constitutes the acceptance.
One to whom a check is tendered containing such a stipulation, must either accept or reject the stipulation, as written, and may not obtain the benefit of the check and, at the same time, avoid the obligation resulting from the stipulation by adding other stipulations intended to nullify the first.
Vices of Consent
A. Error (Subjective)
B. Fraud
C. Duress
A. Error (Subjective)
1) Types of Error
(a) Bilateral error – consent is vitiated if both parties are in error; in the alternative, the parties may reform the instrument to reflect their true mutual intent
(b) Unilateral error – where only one party is in error, error will vitiate that party’s consent if:
(i) it concerns a cause w/o which the obligation would not have been incurred, i.e., the error concerns the principle cause; and
(ii) this cause was known or should have been known to the other party
2) Problems with Unilateral Error
(a) Error concerns a cause when it bears on:
(i) the nature of the contract
(ii) the contractual object or a substantial quality of that object
(iii) the person or the qualities of the other party
(iv) anything the parties regarded or should have regarded in good faith as a cause; or
(v) the law when a party has drawn erroneous conclusions of law and entered into a binding contract based on them
(b) The “Principal Cause” Requirement – ensures parties do not invoke error to get out of contracts on insignificant grounds. Thus, a party can rescind on the basis of error only if that party would not have bound himself if he had not suffered from this error. If the party would have entered into the contract despite the error, there is no vice of consent.
(c) The Knowledge Requirement – an attempt to treat the other party fairly. If the other party neither knew nor should have known that the party in error was binding himself because of this erroneous belief, then there is no vice of consent. Note that the requirement is that the other party knew or should have known of the cause. There is no requirement that the other party knew of the error, or that the other party held the same erroneous belief.
Oil City Realty v Bordelon
When a buyer executes a purchase agreement for the sale of a three bedroom house and lot ample to accommodate renovations for adding an additional bedroom, but prior to the closing learns the lot is burdened by a right-of-way pavement, which reduces the size of the lot thus making the intended renovations impossible and this buyer refuses to go through with the agreement, the contract is not invalid due to error if the seller did not know or have reason to know of the buyer’s principal cause (lot big enough to renovate for 4 bedroom house) for executing the purchase agreement.
B. Fraud
the misrepresentation or suppression of the truth made with the intent to obtain an unjust advantage or cause a loss or inconvenience to the other party. Jurisprudence does distinguish between fraud by commission and fraud by omission.
1) Fraud does not vitiate consent when a party could have ascertained the truth without difficulty or special skill unless a relation of confidence has reasonably induced a party to rely on the other’s assertions.
2) Fraud need not concern the principal cause, as long as it substantially influenced consent. There must be reliance on the statement.
3) Fraud may be the result of silence or inaction. Jurisprudence, however, considers silence or inaction as fraud only when the facts justify the imposition of a duty to speak.
4) Fraud committed by a third party vitiates consent if the party not in error knew or should have known of the fraud.
Griffing v Atkins
Where an illiterate, unintelligent man finds a ring and takes it to an employee of a jeweler at the advice of the employee, to be tested and the employee offers to buy the ring for $130, knowing it to be worth $1250, the contract to sell can not be rescinded for error and fraud since the man made no further effort to find out the real value of the ring. He clearly always had the option to take it somewhere else to be appraised.
Orr v Walker
Π seeks to annul a deed that transfers a strip of property to Δ claiming the deed is null for fraud. Δ showed Π a fake deed which purported to convey Talley’s land to Δ. Π and Talley were at odds and Π did not want Talley to have the land. Δ is guilty of misrepresentation because the deed was false and this misrepresentation influenced a cause w/o which Π wouldn’t have obligated himself. Δ’s misrepresentation caused inconvenience (emotional distress and inconvenience of dealing with his hated neighbor who proceeds to do things like take down his fence) to Π.
A person may have his contract annulled when it has been obtained through the practice of artifice by another designed to cause him inconvenience; the sustaining of a pecuniary loss is not essential.
Overby v Beach
When allegations are made that Π was induced to purchase an apartment house by seller’s misrepresentations as to the legally collectible rental for each apartment, a cause of action may not lie for rescission of the purchase on ground of error or fraud if Π did not take all possible precautions and proceed with ordinary attention to inquire regarding the validity of the representations. For a cause of action to lie, the allegations must be taken as true.
C. Duress
party whose consent was vitiated knew the truth but agreed to the contract anyway because he felt that he was forced to consent. The conduct constituting the duress must have been of such a nature as to cause reasonable fear of unjust and considerable injury to a party’s person, property or reputation.

1) Elements of Duress
2) Recovery by Victim of Duress
1) Elements of Duress
(a) must threaten injury of considerable magnitude and must be accompanied by the apparent ability to bring about that injury. The act must be threatening enough to cause fear in a reasonable person of unjust and considerable injury.
1. Reasonable Person – same age, health, disposition and circumstances as the victim
2. Fear of Unjust Injury – must be unjust; if the threat is to perform a lawful act or to exercise a legitimate legal right, there is no duress
3. Other party need not perpetrate or know of duress – can be a third person, and there is no requirement in this case that the other party to the contract either know or should know of the duress.

(b) act must have actually resulted in a reasonable fear of considerable injury, which prompted the party to consent to the contract. The contracting party whose consent was vitiated by duress need not have been the same party against whom the violence was threatened. Could be a spouse, ascendant, descendant or close friend of the contracting party.
2) Recovery by Victim of Duress
(f) person whose consent was vitiated by duress can recover damages and attorney fees.
(g) This is recoverable from the other party to the contract if the other party exerted the duress or knew of it
(h) If the duress was exerted by a third person, then both the party whose consent was vitiated by duress and any other parties to the contract innocent of the duress can recover from this third person
Cooder v Oteri
Where one seeks to obtain the cancellation of notes which he claims to have given w/o consideration and through fear of bodily injury, he having signed the notes before a notary with knowledge of their tenor, the burden of proof is upon him to prove duress for the contract to be annulled.
Wilson v Aetna Casualty & Surety, Co.
Where one seeks to obtain the cancellation of notes which he claims to have given w/o consideration and through fear of bodily injury, he having signed the notes before a notary with knowledge of their tenor, the burden of proof is upon him to prove duress for the contract to be annulled.
Wilson v Aetna Casualty & Surety, Co.
A release discharging a motorist’s liability insurer from all claims arising out of an accident for consideration of $5k precludes Π from further recovery from insurer even though at time he executed the release, Π was illiterate, immobilized from injuries, in financial straits and had been advised by his doctor that the only way he could get a prompt settlement was to accept the amount offered to him. The duress mentioned does not constitute a code recognizable ground to rescind the settlement.
Object of Contract - A. General Principles
1) All things that are lawful may be the object of a contract.
(a) future thing
(b) hope
Object of Contract - B. Stipulation Pour Autrui –3rd party-beneficiary situation
1) The Tripartite Relation
(a) Stipulator – a promissee, in the sense he bargains for and receives the promise, he is not a regular promise since he will not receive the performance of which the benefit consists
• A creditor stipulates
• Bound by their contract even after the 3rd party avails himself of the benefit
• Unless an agent or mandatary, a party may not stipulate, or make a contract, for another, that is, in the latter’s name
• Acting in his own name, a party to a contract may stipulate an advantage or benefit for a third party as a provision of that contract

(b) Promisor
• Stipulator may demand performance from the promisor even though such performance is not for his benefit
• May also demand dissolution for the promissor’s failure to perform, and even damages for nonperformance

(c) Beneficiary
• Has an action of his own against the promisor for specific performance of the benefit
• Does not have an action for dissolution in case of nonperformance because, though a beneficiary, he is not a party to the contract
• In Louisiana, courts have allowed raising the stipulator’s failure to perform as a defense against the beneficiary
• A contracting party may stipulate a benefit for a 3rd person called a 3rd party beneficiary since stipulations are made in favor of 3rd parties outside the framework of a commutative contract or onerous donation (examples – matrimonial agreements or family settlements where provision are made in favor of children to be born of a certain marriage or charitable subscriptions made for the benefit of a particular class of persons)
Commerce Insurance Agency, Inc. v Hogue
The object of a contract must be determinate at least to kind; however, the quantity of a contractual object may be undetermined, as long as it is determinable.
State v Lewis
A plea bargain is a contract between the state and one accused of a crime. Consent of both parties is required for a valid contract. Consent may be vitiated by error, fraud or duress. Error vitiates consent only when it concerns a cause w/o which the obligation would not have been incurred and that cause was known or should have been known to the other party. Error may concern a cause when it bears on the nature of the contract, or the thing that is the contractual object, or the law, or any other circumstance that the parties regarded, or should in good faith have regarded, as a cause of the obligation.
Liles v Bourgeois
Future things may be the object of an obligation. One cannot, however, renounce the succession of an estate not yet devolved, nor can any stipulation be made with regard to such a succession, even with the consent of him whose succession is in question. In Louisiana, when there is an unjust enrichment of one at the expense or impoverishment of another, then the value of that enrichment or else, in some cases, the amount of the impoverishment must be restituted.
*Succession of a living person cannot be contracted in this way. Prevent others from hastening the death of another for their advantage.
Schiffman v Service Truck Line, Inc
a compromise agreement whereby a wife released the Δs from all claims she had or might in the future have in the event her husband should die as a result of the accident was invalid as against the public policy prohibiting dealing in or renunciation of rights whose coming into existence requires the death of a living person.
Daigle v Clemco Industries
the LA Supreme Court held enforceable a provision in a contract between the wife of an injured person and the Δs in which, prior to her husband’s death which resulted from that injury, she released the Δs from all claims which she may now or at any time in the future for the alleged wrongful death of her husband as a result of or in any connection to the alleged injuries described in the suit.
Object of Contract - Act of Another
1) Promesse de port-fort – contract in which the object is an act to be done by another person
Example: A party, acting in his own name, may promise that the contract he is making will be ratified or performed by another party. When such is the case, if the 3rd party does not ratify or does not perform the promisor is liable in damages to the party with whom he contracted.
(i) a security device that resembles suretyship in that the promisor, or porte-fort, is bound only if the 3rd party does not satisfy the creditor, but differs from suretyship in that the promisor never becomes an accessory obligor.

2) Difference between a promesse de porte-fort and a stipulation pour autrui
(j) stipulation pour autrui – a 3rd party derives a benefit from a contract made by others
(k) promesse de porte-fort – by expressing his consent, substitutes himself for a party to a contract and therefore binds himself
Lamy v Will
When two parties are involved in a gambling activity and one writes the other a check for money loaned to cover gambling losses, the Π is precluded from maintaining an action for recovery of the money loaned as the cause of the obligation is false or unlawful.
Lauer v Catalanotta
A loan made by a 3rd party to a gambler, where the loan is clearly for the purpose of gambling or repaying a gambling debt will not be an enforceable obligation. However, if the lender is an innocent bystander and has no intent to gamble and is not aware of the other party’s intent to gamble, the agreement is not null and no formal form is required depending on the relationship between the parties.
McMahon v Hardin
When a wife hires a private investigator to obtain evidence of her husband’s infidelity to secure grounds for a divorce and conditions payment upon his finding this proof, and upon getting the divorce the investigator is not paid and sues the wife for hiring him and also the husband as master of the former community, the contract is condemned or void as contrary to public policy.
Gravier’s Curator v Carraby’s Executor
When a party simulates the sales of his property to another to prevent seizure by his creditors and it is made to appear to the world the other is the owner of the property, no action can be maintained to recover the value of the property when sold by the other since the intent of the party was fraudulent and the cause wicked and prohibited by law.
NO action lies for the price of fraud.
The law, whose mission is to right the innocent and to enforce the performance of licit obligations only, leaves parties who traffic in forbidden things and then break faith with each other to such mutual redress as their own standard of honor may award.
Cahn v Baccich
When one party, in no way participates in a scheme devised by the other and a promise is made in their name though unauthorized, the scheming party is bound by the promise made as when an agent for the party is adjudicated as the last and highest bidder in an auction and his partner schemes with another party to induce that party to abstain from further bidding. The innocent party will be able to recoup!
Detrimental Reliance
A party may be obligated by a promise when he knew or should have known that the promise would induce the other party to rely on it to his detriment and the other party was reasonable in so relying.
Detrimental Reliance
1) If the promise was a gratuitous one made without required formalities, then the promisee’s reliance is deemed not reasonable.
2) Recovery under this doctrine is discretionary with the court. The court can limit recovery to either the expenses incurred or the damages suffered by the promise.
3) In Louisiana, there are three (3) elements of detrimental reliance:
(a) a representation by conduct or word
(b) justifiable reliance
(c) a change in one’s position to one’s detriment
Hebert v McGuire
When a physician performs a surgery on a patient with the promise to file an insurance claim in order to be paid, and this promise is made prior to the performance of the surgery, that promise is part of an enforceable contract. However, if the promise to file the insurance claim is made after the surgery, it could be deemed a gratuitous promise in which recovery based on detrimental reliance would reasonably apply.
Edinburgh v Edinburgh
When a homeowner promises to leave a house to a husband and wife upon her death, in exchange for payment of needed repairs and payment of the mortgage until her death and the husband performs as requested however, the homeowner only leaves the house to the wife, the husband who assumed the responsibilities he was under no obligation to assume, he entitled to recover the money he spent on the house as he relied to his detriment upon the homeowner’s promise
Gray v McCormick
When a father informally promised to his daughter and her husband that he would donate to them five and one half acres of land for them to build a house, a promise he did not fulfill though he allowed them to build such a house, the court concluded that daughter and husband could not recover on the grounds of detrimental reliance because their reliance on the father’s promise had not been reasonable. THE DONATION WAS NOT IN AUTHENTIC FORM.
Natural Obligations
No form is required for natural obligations
Natural Obligations
1)A natural obligation operates as a cause of an obligation.
2) When a person feels a moral duty that is so strong toward another person, that duty becomes an element of a clearly identifiable relation called a natural obligation.
3)Through his own action, the obligor may promote his natural obligation to a civil one:
a)performing the obligation out of his own free will in which case he may no longer reclaim that performance because the oblige has now a right to keep it, OR
b)by giving the oblige a promise that he will render a performance in which case the oblige now acquires a right to demand performance.
Requirements to turn a moral duty to a natural obligation
a) moral duty felt towards a particular person
b) feels he owes a debt to the person
c) a performance whose object is of pecuniary value
d) perform or promise to perform
e) must not impair public order
Natural Obligations
A natural obligation is not enforceable by judicial action. Nevertheless, whatever has been freely performed in compliance with a natural obligation may not be reclaimed. A contract made for the performance of a natural obligation is onerous.
Thomas v Bryant
When a stepfather executes a promissory note for payment of ½ of his stepson’s alcohol and drug addiction treatment and this note is voluntarily signed while he is married to the stepson’s mother, upon their divorce, he is bound by the note as his natural obligation was turned into a civil one by execution of the promissory note.
1) The stepdad felt a duty was owed to the stepson specifically.
2) The stepdad felt so strongly about the moral duty, he truly felt he owed a debt – he was married to the child’s mother
3) Duty was fulfilled thru rendering a performance of which the object had a pecuniary value- ½ cost of his stepson’s medical treatment
4) Performing the obligation or a promise to perform – executed the promissory note
5) The moral duty was not unlawful
Wortman v French
When a husband, guilty of adultery seeks to transfer a house worth $4500 for $10 along with other goods and valuable consideration to his wife in exchange for a uncontested, quick divorce, this transfer is not a sale nor a legally enforceable obligation because public policy will prevent one spouse from suing another spouse for damages for breach of marital obligations. However, is the donation is to make reparations to the wronged spouse; the obligation would be natural and not able to be nullified by the court.
Performance is not recoverable
(a) If the debtor only pays a part of what he owes, the creditor must satisfy himself with that performance spontaneously rendered by the debtor, as he has no action to demand the balance.
Unlawful cause
8) Where the cause is unlawful, the civil obligation will have no effect.
Service Finance Co. of BR, Inc. v Daigle
When a debtor files bankruptcy but verbally says he will continue payments after the creditor was properly notified of the bankruptcy proceedings and the creditor based on the promise takes no active role in the bankruptcy, there must be a clear, definite and unequivocal recognition and renewal of the debt to create a binding obligation. The mere knowledge of the discharged debt or the expression of hope, desire, expectation or intention to pay or revive the debt is not sufficient and is considered only recognition of a moral obligation.
Stoll v Goodnight Corporation
A natural obligation cannot be enforced by judicial action, but once a debtor recognizes and freely performs in response to a natural obligation, he cannot recover or reclaim what she has done or paid as when a travel counselor accepts a check containing a forged endorsement which is returned unpaid and she reimburses the company since accepting the check was in violation of company policy and is subsequently terminated two weeks after paying the debt tries to recover the amount paid.
Remission of Debt
a remission of debt by an obligee extinguishes the obligation; a forgiveness of the debt by the creditor as it has been put in LA jurisprudence.
Remission may be either:
(a) Express – may be made orally or in writing
(b) Tacit – ¹when the creditor speaks no words, as when he destroys the instrument that evidences the obligation in the presence of the debtor; ²when it is the natural result of other words of the creditor, as when he gives the debtor a receipt for the full amount owed w/o having received payment; ³when he returns to the debtor the instrument that evidences the obligation after writing on the back thereof that the debt was canceled for services rendered that the creditor acknowledged as the equivalent of cash.
Hicks v Hicks
The remission of a debt is tacit when the creditor voluntarily surrenders to his debtor the original title under private signature which establishes the obligation. There is no form prescribed for the remission and is presumed always to have been accepted by the debtor and cannot be revoked by the creditor as when a mother takes three notes back from her son and writes “Cancelled for services rendered to me which I acknowledge as the equivalent of cash” which makes them a tacit remission because the son accepted on the spot.
Hurley v Hurley
Donations inter vivos are liable to be revoked or dissolved on account of (1) the ingratitude of the donee; (2) the nonfulfillment of the eventual conditions, which suspend their consummation; (3) the nonperformance of the conditions imposed on the donee as when a father sold land to his son and then took the note from him on the condition that if the son would take care of him for the rest of his life, he would cancel the note however after about 3 months the son so ill-treated, abused and threatened his father using vile and obscene language, the donation of the note can be nullified because of the ingratitude of the son.
Transaction or Compromise
1) Transaction – an agreement whereby the parties put an end to litigation or prevent litigation from taking place; needs to be a written agreement in effect; must be a knowing and clear acceptance
2) Requirements:
(a) existence of litigation
(b) the intention of putting an end to it
(c) reciprocal concessions of the parties
3) Compromise – specifically taken as agreements
4) Accord and satisfaction- when approached from the standpoint of the discharge of duties
RTL Corp v Manufacturer’s Enterprises, Inc
– Δ admits it owes a certain undisputed amount. Π claims Δ owes the disputed amount. Δ says there was a compromise transaction when Π signed and cashed his check which read “Payment in full”. Π, however, substituted the words “partial payment” but still cashed the check which constitutes the acceptance.
Vices of Consent
One to whom a check is tendered containing such a stipulation, must either accept or reject the stipulation, as written, and may not obtain the benefit of the check and, at the same time, avoid the obligation resulting from the stipulation by adding other stipulations intended to nullify the first.
Error(Subjective)
Types of Error
(a) Bilateral error – consent is vitiated if both parties are in error; in the alternative, the parties may reform the instrument to reflect their true mutual intent

b) Unilateral error – where only one party is in error, error will vitiate that party’s consent if:
(i) it concerns a cause w/o which the obligation would not have been incurred, i.e., the error concerns the principle cause; and
(ii) this cause was known or should have been known to the other party
Problems with Unilateral Error
(a) Error concerns a cause when it bears on:
(i) the nature of the contract
(ii) the contractual object or a substantial quality of that object
(iii) the person or the qualities of the other party
(iv) anything the parties regarded or should have regarded in good faith as a cause; or
(v) the law when a party has drawn erroneous conclusion of law and entered into a binding contract based on them
The “Principal Cause” Requirement
ensures parties do not invoke error to get out of contracts on insignificant grounds. Thus, a party can rescind on the basis of error only if that party would not have bound himself if he had not suffered from this error. If the party would have entered into the contract despite the error, there is no vice of consent.
The Knowledge Requirement
an attempt to treat the other party fairly. If the other party neither knew nor should have known that the party in error was binding himself because of this erroneous belief, then there is no requirement is that the other party knew or should have known of the cause. There is no requirement that the other party knew of the error, or that the other party held the same erroneous belief.
Oil City Realty v Bordelon
– When a buyer executes a purchase agreement for the sale of a three bedroom house and lot ample to accommodate renovations for adding an additional bedroom, but prior to the closing learns the lot is burdened by a right-of-way pavement, which reduces the size of the lot thus making the intended renovations impossible and this buyer refuses to go through with the agreement, the contract is not invalid due to error if the seller did not know or have reason to know of the buyer’s principal cause (lot big enough to renovate for 4 bedroom house) for executing the purchase agreement.
Fraud
the misrepresentation or suppression of the truth made with the intent to obtain an unjust advantage or cause a loss or inconvenience to the other party. Jurisprudence does distinguish between fraud by commission and fraud by omission.
Fraud
1) Fraud does not vitiate consent when a party could have ascertained the truth without difficulty or special skill unless a relation of confidence has reasonably induced a party to rely on the other’s assertions.
2) Fraud need not concern the principal cause, as long as it substantially influenced consent. There must be reliance on the statement.
3) Fraud may be the result of silence or inaction. Jurisprudence, however, considers silence or inaction as fraud only when the facts justify the imposition of a duty to speak.
4) Fraud committed by a third party vitiates consent if the party not in error knew or should have known of the fraud
Griffing v Atkins
Where an illiterate, unintelligent man finds a ring and takes it to an employee of a jeweler at the advice of the employee, to be tested and the employee offers to buy the ring for $130, knowing it to be worth $1250, the contract to sell can not be rescinded for error and fraud since the man made no further effort to find out the real value of the ring. He clearly always had the option to take it somewhere else to be appraised.
Orr v Walker
Π seeks to annul a deed that transfers a strip of property to Δ claiming the deed is null for fraud. Δ showed Π a fake deed which purported to convey Talley’s land to Δ. Π and Talley were at odds and Π did not want Talley to have the land. Δ is guilty of misrepresentation because the deed was false and this misrepresentation influenced a cause w/o which Π wouldn’t have obligated himself. Δ’s misrepresentation caused inconvenience (emotional distress and inconvenience of dealing with his hated neighbor who proceeds to do things like take down his fence) to Π.
Overby v Beach
When allegations are made that Π was induced to purchase an apartment house by seller’s misrepresentations as to the legally collectible rental for each apartment, a cause of action may not lie for rescission of the purchase on ground of error or fraud if Π did not take all possible precautions and proceed with ordinary attention to inquire regarding the validity of the representations. For a cause of action to lie, the allegations must be taken as true.
Duress
party whose consent was vitiated knew the truth but agreed to the contract anyway because he felt that he was forced to consent. The conduct constituting the duress must have been of such a nature as to cause reasonable fear of unjust and considerable injury to a party’s person, property or reputation.
Elements of Duress
(a) must threaten injury of considerable magnitude and must be accompanied by the apparent ability to bring about that injury. The act must be threatening enough to cause fear in a reasonable person of unjust and considerable injury.
1. Reasonable Person – same age, health, disposition and circumstances as the victim
2. Fear of Unjust Injury – must be unjust; if the threat is to perform a lawful act or to exercise a legitimate legal right, there is no duress
3. Other party need not perpetrate or know of duress – can be a third person, and there is no requirement in this case that the other party to the contract either know or should know of the duress.

(b) act must have actually resulted in a reasonable fear of considerable injury, which prompted the party to consent to the contract. The contracting party whose consent was vitiated by duress need not have been the same party against whom the violence was threatened. Could be a spouse, ascendant, descendant or close friend of the contracting party.
Recovery by Victim of Duress
person whose consent was vitiated by duress can recover damages and attorney fees.
(a) This is recoverable from the other party to the contract if the other party exerted the duress or knew of it
(b) If the duress was exerted by a third person, then both the party whose consent was vitiated by duress and any other parties to the contract innocent of the duress can recover from this third person
Cooder v Oteri
Where one seeks to obtain the cancellation of notes which he claims to have given w/o consideration and through fear of bodily injury, he having signed the notes before a notary with knowledge of their tenor, the burden of proof is upon him to prove duress for the contract to be annulled.
Wilson v Aetna Casualty & Surety, Co.
A release discharging a motorist’s liability insurer from all claims arising out of an accident for consideration of $5k precludes Π from further recovery from insurer even though at time he executed the release, Π was illiterate, immobilized from injuries, in financial straits and had been advised by his doctor that the only way he could get a prompt settlement was to accept the amount offered to him. The duress mentioned does not constitute a code recognizable ground to rescind the settlement.
Object of Contract
General Principles
All things that are lawful may be the object of a contract.
(a) future thing
(b) hope
Commerce Insurance Agency, Inc. v Hogue
The object of a contract must be determinate at least to kind; however, the quantity of a contractual object may be undetermined, as long as it is determinable.
State v Lewis
A plea bargain is a contract between the state and one accused of a crime. Consent of both parties is required for a valid contract. Consent may be vitiated by error, fraud or duress. Error vitiates consent only when it concerns a cause w/o which the obligation would not have been incurred and that cause was known or should have been known to the other party. Error may concern a cause when it bears on the nature of the contract, or the thing that is the contractual object, or the law, or any other circumstance that the parties regarded, or should in good faith have regarded, as a cause of the obligation.
Liles v Bourgeois
Future things may be the object of an obligation. One cannot, however, renounce the succession of an estate not yet devolved, nor can any stipulation be made with regard to such a succession, even with the consent of him whose succession is in question. In Louisiana, when there is an unjust enrichment of one at the expense or impoverishment of another, then the value of that enrichment or else, in some cases, the amount of the impoverishment must be restituted.

Succession of a living person cannot be contracted in this way. Prevent others from hastening the death of another for their advantage.
Schiffman v Service Truck Line, Inc
a compromise agreement whereby a wife released the Δs from all claims she had or might in the future have in the event her husband should die as a result of the accident was invalid as against the public policy prohibiting dealing in or renunciation of rights whose coming into existence requires the death of a living person.
Daigle v Clemco Industries
the LA Supreme Court held enforceable a provision in a contract between the wife of an injured person and the Δs in which, prior to her husband’s death which resulted from that injury, she released the Δs from all claims which she may now or at any time in the future for the alleged wrongful death of her husband as a result of or in any connection to the alleged injuries described in the suit.
Stipulation Pour Autrui –3rd party-beneficiary situation
gives rise to a tripartite relation between a stipulator, a promissor and a beneficiary
The Tripartite Relation
(a) Stipulator – a promissee, in the sense he bargains for and receives the promise, he is not a regular promise since he will not receive the performance of which the benefit consists
• A creditor stipulates
• Bound by their contract even after the 3rd party avails himself of the benefit
• Unless an agent or mandatary, a party may not stipulate, or make a contract, for another, that is, in the latter’s name
• Acting in his own name, a party to a contract may stipulate an advantage or benefit for a third party as a provision of that contract
Promisor
• Stipulator may demand performance from the promisor even though such performance is not for his benefit
• May also demand dissolution for the promissor’s failure to perform, and even damages for nonperformance
Beneficiary
• Has an action of his own against the promisor for specific performance of the benefit
• Does not have an action for dissolution in case of nonperformance because, though a beneficiary, he is not a party to the contract
• In Louisiana, courts have allowed raising the stipulator’s failure to perform as a defense against the beneficiary
• A contracting party may stipulate a benefit for a 3rd person called a 3rd party beneficiary since stipulations are made in favor of 3rd parties outside the framework of a commutative contract or onerous donation (examples – matrimonial agreements or family settlements where provision are made in favor of children to be born of a certain marriage or charitable subscriptions made for the benefit of a particular class of persons)
Promesse de port-fort
contract in which the object is an act to be done by another person
Example: A party, acting in his own name, may promise that the contract he is making will be ratified or performed by another party. When such is the case, if the 3rd party does not ratify or does not perform the promisor is liable in damages to the party with whom he contracted.
(b) a security device that resembles suretyship in that the promisor, or porte-fort, is bound only if the 3rd party does not satisfy the creditor, but differs from suretyship in that the promisor never becomes an accessory obligor.
Difference between a promesse de porte-fort and a stipulation pour autrui
(c) stipulation pour autrui – a 3rd party derives a benefit from a contract made by others
(d) promesse de porte-fort – by expressing his consent, substitutes himself for a party to a contract and therefore binds himself
Terminology
1) Mora – delay to perform
2) Failure to perform may result from
(a) delayed performance
(b) non performance
(c) defective performance
3) Mise en demeure – act of putting the obligor in default
Ways of putting a Obligor in Default
1) written request of performance
2) oral request of performance made before two witnesses
3) filing suit for performance
4) specific provision of the contract
Delayed Performance
1) Obligor incurs a total violation the duty to render a performance when he renders no performance at all, so that the oblige is entirely deprived of the satisfaction that was promised to him – i.e. the failure to perform is absolute.
2) An obligor incurs only a partial violation of his duty when he performs late, or renders a defective performance, and that late or defective performance is still of value to the oblige – i.e. delay in performance with possibility of completing the performance is relative.
Moratory Damages
1) definition – damages for delay
2) The Louisiana Civil Code provides that damages for delay in the performance of an obligation are owed from the time the obligor is put in default.
3) In the case of delay in performance that a putting in default is preeminently required to:
(a) verify the fact of the obligor’s non-performance
(b) to mark the starting point of the moratory damages
4) The obligor's delay may sometimes amount to a final, definitive, or absolute nonperformance.
Fibrebond Corp and K-dak, Inc v Aetna Casualty & Surety Co
illustrates with perfection the relevance of a fixed term. The contract included stipulated damages for delay. It was a construction contract in which it was agreed that the obligor would pay $800/day for delay after the 480 day period for completion. An oblige may not avail himself of a clause stipulating damages for delay unless the obligor has been put in default. The inclusion of the fixed term puts the obligor in default from that date onward. So, Π can claim damages for delay from the fixed term until the time it took for the performance to be completed.
Electrodata Manufacturing Corp v The Domed Stadium Hotel, Inc
Under the written contract, there was no agreement to pay for the equipment before its installation and there was no agreement fixing any amount as a price for the uninstalled equipment. Time was not definitely specified. The court held the Π was not automatically entitled to its charge for manufacturing the system merely because of the Δ’s failure to have the building ready for installation at the agreed time. They reasoned that the Π was first obliged to put the Δ in default in respect to readying the building.
Compensatory Damages
(a) owed for failures in performance other than delay
(b) intended to compensate the obligee for a performance that he will not receive, or will not receive in full
(c) a substitute satisfaction granted to the oblige in lieu of a performance that has failed, while moratory damages follow a performance that has been or will be rendered, but late
(d) owed from the time the obligor has failed to perform, and not from the time he has been put in default (there is no need for a putting of the obligor in default in order for an oblige to recover damages other than those for delay)
Allen v Steers
Π is claiming Δ breached the contract for failure to perform. Π arrived at Δ store, Δ refused to store Π cotton. Thus this is a total failure of performance. Π had to go elsewhere and pay a higher price to store his cotton. Π is entitled to compensatory damages from the time the obligor failed to perform. No putting in default is required because these are not damages due to a delay.
**When a delayed performance would no longer be of value to the oblige or it is evident that the obligor will not perform, the oblige may regard the contract as dissolved.
Doctrine of Anticipatory Breach
if a party to an executory bilateral contract, by announcing that he will not perform, repudiates the contract before arrival of the time agreed for performance, the other party may treat the anticipatory repudiation as a present total breach, and may bring action immediately for the entire value of the promised performance.
Methods of Putting in Default
commencement of any suit is a proper way to effect a placing of the obligor in default
1) a putting of the obligor in default is a prerequisite also for the dissolution of a contract, however, such a dissolution must be demanded and such a demand may be met by an offer or tender of performance (suing for dissolution is an indirect way of stimulating the obligor to perform, which amounts to placing him in default.
2) A demand in writing is another method used for placing the obligor in default (a letter may constitute such a writing)
3) Another method is a protest by a notary public
Moran v Wilshire Insurance Co
Π sued his insurance company and repair shop owner for damages when they delayed in repairing his truck. Δ pleaded for failure of putting in default as an affirmative defense. Whether a suit is for specific performance, or for the dissolution, or for damages- commencement of the suit is a proper way to effect a placing of the obligor in default. Civil Code art 1991 provides the manners of putting in default; it does not require a specific language. Since Π alleged the truck was still under repair when the suit was filed and he claimed damages because the repairs were delayed, it implies an ongoing expectation of performance. The suit did not specifically request performance however the court found its allegations were sufficient to serve the function of putting in default and damages for delay in the repair were owed.
Melancon v Texas Co
A justifiable cause for delay in payment might arise when there is a reasonable dispute as to those entitled to receive royalties or the amount due each; however, if no valid reason exist and despite repeated oral and written demands by the Π for payment, these demands are sufficient placing of the obligor in default entitling the obligee to a right to damages.
Dissolution
A. General Principles
1) Binding force of a contract is brought to an end by:
(a) expected performance of the parties’ obligation
(b) termination through the parties’ mutual consent
(c) rescission for some reason that gives rise to nullity
(d) dissolution for nonperformance
2) When one of the parties fails to perform his obligation, it is only fair to allow the other to free himself from the contract, if he so wishes
Judicial Dissolution
1) The judicial dissolution of a contract must be pronounced by the court.
2) The obligor in default may usually prevent dissolution by tendering performance.
Waseco Chemical & Supply Co v Bayou State Oil Corp.
The court takes into consideration the extent and gravity of the failure to perform alleged by the complaining party, the nature of the obligor’s fault, the good or bad faith of the parties involved, and also the surrounding economic circumstances that may make the dissolution opportune or not. Upon consideration of all such factors, a choice must be made among several courses of action.
Simpson v Simpson
An obligor is liable for the damages caused by his failure to perform a conventional obligation. A failure to perform results from nonperformance, defective performance, or a delay in performance. Court held extra time for performance needed.
Dissolution by a Party’s Initiative
1) Upon a party’s failure to perform, the other may serve him a notice to perform within a reasonable time, with a warning that, unless performance is rendered within that time, the contract shall be deemed dissolved.
2) When a delayed performance would no longer be of value to the obligee or when it is evident that the obligor will not perform, the obligee may regard the contract as dissolved without any notice to the obligor.
3) Need dissolution by the court. A party, who considers a contract dissolved by his own initiative, is acting at his own peril.
Partial Dissolution
Overriding principle of “good faith” must be applied in seeking dissolution
1) When dissolution is sought on grounds of a partial failure to perform, the court may find that the obligor has performed a substantial part of his obligation. Thus, dissolution would be unfair as the obligee can be adequately compensated with damages for the unperformed part of Δ’s obligation.
2) Damages for nonperformance may be granted without pronouncing the total dissolution of the contract. Such a judgment amounts to a partial dissolution of the contract.
Obligee’s Readiness to Perform
A party may not obtain a dissolution unless he had already performed, or was ready to perform, his obligation when the other party failed to perform.
Specific Performance
A. The Louisiana Jurisprudence
1) CC. Art 1986 – Upon an obligor’s failure to perform an obligation to deliver a thing, or not to do an act, or to execute an instrument, the court shall grant specific performance plus damages for delay if the obligee so demands. If specific performance is impracticable, the court may allow damages to the obligee. Upon failure to perform an obligation that has another object, such as an obligation to do, the granting of specific performance is at the discretion of the court.
2) CC. Art 1987 – The obligor may be restrained from doing anything in violation of an obligation not to do
3) CC. Art 1988 – A failure to perform an obligation to execute an instrument gives the obligee the right to a judgment that shall stand for the act.
Girauly v Feucht
In a promise of sale, a clause which stipulates that part of the price is to be deposited in a bank in the joint names of the parties until the title is examined, and to be paid to the vendor when the act of sale is passed, or to be returned to the vendor in the event the title is rejected, does not constitute a purely potestative condition. It means nothing more than the sale is made subject to examination of the titles. A promise of sale amounts to a sale and specific performance of it will be enforced.
Cellular One, Inc v Boyd
A noncompetition agreement preventing employees from engaging in the radio telephone service business similar to that of their former employer, in specified parishes for period of 2 years after they were terminated was not unenforceable because of a lack of mutuality or insufficient cause; employees signed the agreement as condition of continued employment and employment was a valid cause of the contract.
Tolbert v Hyatt Management
A slip and fall victim could be compelled to execute a written settlement in accordance with an agreement recited in open court for which the essential terms were fully disclosed, including the fact that she was to be paid $4k in general damages plus documented medical bills plus up to $200 in documented court costs and that other litigation expenses or undocumented medical bills incurred by her would have to be deducted from the gross settlement amount.
Bonneau v Blalock
Δ, who admitted receiving a hand-delivered letter from Π’s attorney indicating Π’s desire and intent to exercise an option to purchase the property he was leasing from the Δ, even though they may not have received all the other correspondence from the Π’s attorney and apparently was now trying to avoid selling the property, will be liable for nonperformance thus allowing Π specific performance of the option.
Weingarten Inc v Northgate Mall
Although specific performance is the perfect remedy for breach of contract it may be withheld by the court when specific relief is impossible, when the inconvenience or cost of performing is greatly disproportionate to the damages caused, when the obligee has no real interest in receiving performance, or when the latter would have a substantial negative effect on the interests of 3rd parties.
Sizeler Property Investors, Inc v Gordon Jewelry Corp
A remedy of specific performance is not warranted to compel a tenant to open a closed business on demised premises as enforcement of order would require continuing supervision of the court.
Damages
A. The obligor is bound to make reparation for the damage that his faulty nonperformance has caused the obligee.
B. Whether the obligee will be granted specific performance depends on if its an obligation to deliver, to execute an instrument, or an obligation not to do. Specific performance will be the first remedy and will be granted so long as its not impracticable.
Measurement of Damages
(1) of the loss sustained by the obligee, and
(2) the profit of which he has been deprived
Kinds of Damages
(1) Compensatory – intended as reparation of the harm caused by the definitive nonperformance of the obligor, nonperformance may be either total or partial
(2) Moratory – intended as reparation for the harm caused by the obligor’s delay or retardment in performing the obligation
Friedman Iron & Supply Co v JB Beaird Co, Inc-
Damages are due from the moment that there is an active violation of the contract and the creditor is not under obligation to put the debtor in default, but when the breach is passive only it is necessary to place the debtor in default. Irrespective of whether the cancellation of the contract is considered as an active violation or a passive violation of the contract, there would be no necessity to place the Δ in default because it would have been in vain after the Δ had notified the Π that it did not intend to comply with the contract by ordering its cancellation.
Exemplary Damages
damages on an increased scale awarded to the Π to punish the Δ for his evil behavior or to make an example of him
(1) In LA, only permitted where specifically provided for by statute.
(2) Exemplary damages are disfavored in LA, and courts are reluctant to impose them w/o legislative authority
Nominal Damages
when a token sum is granted to a Π who failed to prove the damages he alleged to have sustained, or who sustained no pecuniary damage because of the Δ’s wrong
Mitigation of Damages
An obligee must make reasonable efforts to mitigate the damage caused by the obligor’s failure to perform. When an obligee fails to make these efforts, the obligor may demand that the damages be accordingly reduced
Weill Construction Co v Thibodeaux
When an obligee fails to mitigate, the obligor can get a reduction in the amount of damages he must pay the obligee. This is because if the obligee could have done something to prevent it, the obligor’s damages are not really direct. The court held that the obligee breached his duty to mitigate because he could have done things to keep the skating rink from buckling. He knew there were things he could do, but he didn’t do them.
Fault of the Obligee
Obligee may not recover damages when his own bad faith has caused the obligor’s failure to perform or when, at the time of the contract, he has concealed from the obligor facts that he knew or should have known would cause a failure.
Copeland v Drury
One cannot claim damages under a contract unless he has shown his full compliance with the terms thereof. Π wanted his son to operate a restaurant and leased property from Δ who agreed to fund the construction of the restaurant in three stages. After making the first payment, Π did not go ahead with any serious construction work and Δ refused to advance any further money. After receiving the first payment Π had already changed his mind about his son’s ability to operate the restaurant.
Contractual Limitation of Damages
Any clause is null that, in advance, excludes or limits liability of one party for intentional or gross fault that causes damage to the other party. Any clause is null that, in advance, excludes or limits the liability of one party for causing physical injury to the other party.
Roll-up Shutters v South Central Bell Tel
contract for the purchase of an ad in the yellow pages by Π to Δ. There were specifications including a picture of the shutters to be in the ad. When the ad was printed the drawing was upside down. Π sued for defective performance and wants loss of business and revenues as well as damages to their reputation because of the defect in the advertising. Δ’s defense is that there was a contractual limitation of liability in the contract – limited liability to the cost of the ad. Contract is enforceable – there was no intentional gross fault and no physical injury – Court based its rationale on the fact that nothing was against public order. The Article ensures that only the clause is null, not the entire contract.
F. Proof of Damages
when damages are insusceptible of precise measurement, much discretion shall be left to the court for the reasonable assessment of these damages.
Stipulated Damages
(1) Parties may stipulate the damages to be recovered in case of nonperformance, defective performance or delay in performance of an obligation
(2) Nullity of the principal obligation renders the stipulated damages clause null. Nullity of the stipulated damages clause does not render the principal obligation null.
(3) Obligee may demand either the stipulated damages or performance of the principal obligation, but not both unless the damages have been stipulated for mere delay.
(4) If valid excuse for failure to perform then obligor is relieved of liability for stipulated damages.
(5) Obligee who avails himself of a stipulated damages clause need not prove the actual damages caused by the obligor’s nonperformance, defective performance or delay in performance
(6) Obligee may not avail himself of a clause stipulating damages for delay unless the obligor has been put in default
(7) Stipulated damages for nonperformance may be reduced in proportion to the benefit derived by the obligee from any partial performance rendered by the obligor
(8) Stipulated damages may not be modified by the court unless they are so manifestly unreasonable as to be contrary to public policy
Recovery on Quantum Meruit
(1) When parties make no provision for a particular situation, it must be assumed that they intend to bind themselves not only to the express provisions of the contract, but also to whatever the law, equity or usage regards as implied in a contract of that kind or necessary for the contract to achieve its purpose
(2) Equity is based on the principles that no one is allowed to take unfair advantage of another and that no one is allowed to enrich himself unjustly at the expenses of another
(3) Usage is a practice regularly observed in affairs of a nature identical or similar to the object of a contract subject to interpretation
Morphy, Makpfsky & Masson, Inc. v Canal Place 2000
There was a valid oral contract. There was a certain object which formed the matter of the agreement (Morphy’s supplying prescribed engineering services to CBM); consent was legally given (both parties agreed for Morphy to do the foundation design and engineering services); the parties were legally capable of contracting and there was a lawful purpose. There was however, no concluded agreement as to the method or terms of payment for the engineering services. Based on quantum meruit, which is geared to equity and unjust enrichment, Morphy cannot recover more than the actual value of his services and materials, plus a fair profit; and he cannot recover more than the Δ was enriched by his services. There is no specific test which must be applied to determine the reasonable value of one’s services. It is a matter of equity depending upon the circumstances.
Recovery on Obligations That Arise Without Agreement
(1) Two situations giving rise to a quasi-contract:
(a) management of affairs which arise when a person, out of his own will, engages in a course of action in protection of the interest, or business affairs of another which imposes upon the latter a certain liability towards the manager.
(b) payment of a thing not owed to him, which imposes upon that person the duty to restore the payment or the thing to the one from whom he received it
Standard Motor Car Co v SFMAIC
Π’s employee, while in the course and scope of employment was test driving a vehicle left at their shop for servicing when an intersectional collision occurred. The proximate cause of the accident was the negligence of the driver, insured by Δ. Π paid for repair of the damages and filed suit to seek recovery of amount paid from Δ. The action of the garageman in repairing the damage to its customer’s vehicle could be considered to be in satisfaction of the 3rd party tortfeasor’s obligation to the customer for the damage to his car and therefore, an act of negotorum gestio as to said 3rd party Δ tortfeasor. All that is required is that the gestor be aware of the fact that he is attending to his another’s business, in this case the Δ tortfeasor’s obligation to repair the damage caused to the owner of the car, and his motive may be to benefit (a) another or even (b) himself.
A. Non-Pecuniary Damages
(1) damages that are awarded as reparation for a loss that, because it is experienced in the moral, or subjective, sphere of a person’s feelings, is not of a material or strictly patrimonial, or strictly pecuniary nature
(a) mental anguish
(b) mental suffering
(c) humiliation
(d) emotional distress
(e) loss of consortium-commonly experienced by a person who has lost a spouse through a fatal accident, or by a person whose spouse, as the result of an accident, is now unable to, or has only a diminished ability to, provide consortium
(f) hedonic loss-loss of enjoyment of life or lifestyle, the loss of felicity and overall contentment and happiness, a kind of loss that frequently accompanies other effects of physical injury
A. Damages for Non-Pecuniary losses in Louisiana
(1) may be recovered when the contract, because of its nature, is intended to gratify a non-pecuniary interest, and because of the circumstances surrounding the formation or the nonperformance of the contract, the obligor knew or should have known, that his failure to perform would cause that kind of loss
(2) Regardless of the nature of the contract, such damages may be recovered when the obligor intended, through his failure, to aggrieve the feelings of the obligee.
Young v Ford Motor Co, Inc
Where an object, or the exclusive object of a contract, is physical gratification (or anything other than intellectual gratification) nonpecuniary damages as a consequence of nonfulfillment of that object are not recoverable. On the other hand, where a principal or exclusive object of a contract is intellectual enjoyment, nonpecuniary damages resulting from the nonfulfillment of that intellectual object are recoverable.

In this case, the nature of the contract nor the facts and circumstances surrounding the formation of the contract demonstrate that Π purchased the new pickup truck for a significant nonpecuniary purpose. Stating he wanted a larger cab area, the need to use the truck in his service station business and his plans for recreational use of the vehicle constituted a pecuniary interest of requiring suitable transportation. Therefore, no award for mental anguish since the object of the contract was a physical gratification only.
Kinds of Obligations
A. A real obligation is a duty correlative and incidental to a real right.

B. A real obligation is transferred to the universal or particular successor who acquires the movable or immovable thing to which the obligation is attached, w/o a special provision to the effect. But a particular successor is not personally bound, unless he assumes the personal obligations of his transferor with respect to the thing, and he may liberate himself of the real obligation by abandoning the thing.
Breaux v Laird
– When a Π purchases immovable property, he is assigned all of the rights and privileges granted to the original owner under a contract to faithfully perform the construction of the home on the property, and will have a cause of action and right of action against the contractor for his failure to perform his obligation to deliver said home free of defects.
Strictly Personal and Heritable Obligations
(1) Heritable obligations – when its performance may be enforced by a successor of the obligee or against a successor of the obligor, except when the contrary results from the terms or nature of the contract
(a) heritable obligations are transferable between living persons

(2) Strictly personal obligations – when its performance can be enforced only by the obligee, or only against the obligor
Simple or Conditional Obligations – dependent on an uncertain event
(1) Suspensive – if the obligation may not be enforced until the uncertain event occurs
(a) suspensive condition that is unlawful or impossible makes the obligation null
(2) Resolutory – if the obligation may be immediately enforced but will come to an end when the uncertain event occurs
(3) Conditions may be either expressed in a stipulation or implied by the law, the nature of the contract, or the intent of the parties
(4) If the condition is that an event shall occur within a fixed time and that time elapses without the occurrence of the event, the condition is considered to have failed. If no time has been fixed, the condition may be fulfilled within a reasonable time. Whether or not a time has been fixed, the condition is considered to have failed once it is certain that the event will not occur.
Bacon v Ford
When a purchaser, through no fault of his own, is unable to obtain the loan upon which the agreement is conditioned, the obligations imposed by the agreement are not binding upon the parties; the agreement is null and the parties are released from their obligations to perform.

When a contract to purchase a home depends on the suspensive condition of the purchasers being able to obtain a loan prior to the date specified in the contract, and the purchaser through no fault of their own are unable to obtain the loan, the contract becomes null
Condition that Depend Upon the Whim of the Obligor
(1) A suspensive condition that depends solely on the whim of the obligor makes the obligation null
(2) A resolutory condition that depends solely on the will of the obligor must be fulfilled in good faith
Humble Oil & Refining Co v Guillory
Because a landowner’s choice not to enter into a mineral lease would result in some material detriment or serious sacrifice to him, a contract granting a portion of his interest in any such leases then existing and or which may thereafter be granted upon the contains the type of potestive condition that is not prohibited by law because they no longer contain a condition dependent upon the wish or pleasure of the obligor.
Obligations with a Term
(1) Suspensive – when it postpones the exigibility of the performance as when a buyer is allowed a period of time to pay the price, in which case performance may not be demanded from him until the date arrives
(2) Resolutory – when it measures the length of time during which an obligation must be performed, in which case the expiration of the term extinguishes the obligation- as when a house is leased for a year at the end of which the parties’ obligations arising from the contract come to an end
(3) Term for performance of an obligation may be
(a) certain – when it is fixed – as when the term of expiration is indicated by day, month, year or by some annual festivity
(b) uncertain – when it is not fixed but is determinable either by the intent of the parties or by the occurrence of a future and certain event . A term is also uncertain when it is not determinable, in which case the obligation must be performed within a reasonable time
Conjunctive and Alternative Obligations
(1) Conjunctive obligation – when it binds the obligor to multiple items of performance that may be separately rendered or enforced. In that case, each item is regarded as the object of a separate obligation. Parties may provide that the failure to perform one or more items shall allow the obligee to demand the immediate performance of all the remaining items.
Example: monthly wages (separate obligations/promises all combined to make one obligation
(2) Alternative obligation – when an obligor is bound to render only one of two or more items of performance, the choice of performance belongs to the obligor unless it has been expressly or impliedly granted to the obligee
Several Obligations – depends on intent of parties
Kinds of Obligations
(1) When each of different obligors owes a separate performance to one obligee, the obligation is several for the obligors.
(2) When one obligor owes a separate performance to each of different obligees, the obligation is several for the obligees
(3) A several obligation produces the same effects as a separate obligation owed to each obligee by an obligor or by each obligor to an obligee
Joint Obligations – depends on intent of parties
Kinds of Obligations
(1) When different obligors owe together just one performance to one obligee, but neither is bound for the whole, the obligation is joint for the obligors
(2) When one obligor owes just one performance intended for the common benefit of different obliges, neither of whom is entitled to the whole performance, the obligation is joint for the obliges
(3) When a joint obligation is divisible, each joint obligor is bound to perform and each joint obligee is entitled to receive, only his portion
(4) When a joint obligation is indivisible, joint obligors or obliges are subject to the rules governing solidary obligors or solidary obligees
Cambre v Gerald
When a married couple executes a promissory note containing no express provision for liability of the couple in solido, the holder does not have the option to impose solidary liability, although he has the authority to complete the blanks in an instrument wanting in any material particular, and the particular words in solido need not be used because the intent to be bound in solido must be shown by clear evidence.
Solidary Obligations
multiple obligees and multiple obligors
(1) An obligation is solidary for the obligees when it gives each obligee the right to demand the whole performance from the common obligor.
(2) An obligation is solidary for the obligors when each obligor is liable for the whole performance. A performance rendered by one of the solidary obligors relieves the others of liability toward the obligee
Gauthier v Scott
When a person signs a guaranty for a promissory note issued to another person, and that guaranty contains a provision binding the signatory of the guaranty in solido with the debtor on the obligation represented by the promissory note, upon default on the repayment of the promissory note, the Signatory of the guaranty is bound in solido as a co-debtor and “if on of the co- debtors in solido pays the whole debt, he can claim from the others no more that the part and portion of each. However, if one of the co-debtors is insolvent, the loss occasioned by his insolvency must be shared amongst all the other solvent co-debtors and him who has made the payment.
Divisible and Indivisible Obligations
An obligation is divisible when the object of the performance is susceptible of division
An obligation is indivisible when the object of the performance, because of its nature or because of the intent of the parties, is not susceptible of division