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123 Cards in this Set
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Article 1756 Definition of an Obligation
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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.
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Obligations of Means
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• Obligation of Means: the debtor is bound to no more than the exercise of reasonably care; can be applied to torts or contracts (obligation is to take the measures which a reasonable man would take to achieve the purpose of the contract)
o Obligation of Means: burden of proof lies on the creditor to show that the debtor did not exercise reasonable care (i.e. proof of fault) |
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Obligation of Result
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the debtors obligation is not simply to show due diligence, but to achieve the result which he has promised. The debtor can escape liability by showing that his failure to produce the result promised is due to a cause beyond his control (the cause must be unforeseeable). If the promised performance can in the ordinary course of events be expected to be achieved, it is an obligation of result.
the creditor only has to show that the result has not been achieved and it is then for the debtor to show that his failure to produce the result promised is due to a cause beyond his control (this is sort of like strict liability if there is no affirmative defense) |
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Free Will
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• 4 propositions of free will:
o Individuals are free to enter into a contract or not o Individuals are free to make any kind of agreement that they want provided it doesn’t offend public order/laws—LA CC art. 7 If the contract does offend a law, it is an absolute nullity o The courts do not make the contract between the parties nor do they supply missing terms if those terms are essential to the validity of the contract o Courts are not free to change the terms or provisions that the parties have chosen • Article 7: a juridical act is any declaration of the will by which a person intends to change his legal position |
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Henson v. St. Paul Fire and Marine Insurance Company
• P sued D (insurer of doctor) alleging that the doctor negligently injured him during surgery • The suit was filed 3 years after the surgery, and D contended that the prescription period passed • Article 3499: personal suits have a ten year prescription period • Article 3492: one year prescription for tort suits • The trial court held that the applicable prescriptive period was one year and dismissed P’s suit |
• Rule: a specific promise to produce a specific result is unnecessary in order to find an action in contract—when a patient goes to a doctor for treatment and the doctor agrees to treat him, a contract has been entered into
• The court says that there must be a contract between doctor and patient because if there were not, it would mean a doctor would have no contractual action against his clients if they refused to pay him • Holding: if P succeeds in proving a contract to cure he will be relieved of his burden of proving substandard conduct. But if he does not prove such a contract, he can still recover by proving that the doctor has violated his obligation of due care. |
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Meaning of Condition
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• A condition is an uncertain event on which the enforceability of an obligation is made to depend.
• In order to qualify as a condition, an event should also be in the future, besides being uncertain. If there is no uncertainty, then there is no condition. • An event, the knowledge of which is certain, even though that event has not yet occurred, s not a condition but rather an indication of the time at which an obligation will be performed, that is, a term • Conditions are not only limited to contract obligation—they can also apply to tort obligations, in a will, can be attached by court to judgment, etc. |
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Article 1767 Suspensive and Resolutory Conditions
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o A conditional obligation is one dependent on an uncertain event.
o If the obligation may not be enforced until the uncertain event occurs, the condition is suspensive. o If the obligation may be immediately enforced but will come to an end when the uncertain event occurs, the condition is resolutory. |
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Article 1769 Unlawful or Impossible Condition
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A suspensive condition that is unlawful or impossible makes the obligation null.
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Article 1770 Condition dependent of whim of obligor is null.
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A suspensive condition that is unlawful or impossible makes the obligation null.
A resolutory condition that depends solely on the will of the obligor must be fulfilled in good faith. |
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CC 1773 Time for fulfiment of a condition that event shall occur
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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 for the occurrence of the event, 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.
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CC 1774 Time for fulment of a condition that shall not occur
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if the condition is that the event shall not occur within a specific time, the condition is considered fulfilled after the time elapses and the event has not occurred
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CC 1775 Effects retroactive
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Fulfillment of a condition has effects that are retroactive to the inception of the obligation. Nevertheless, that fulfillment does not impair the validity of acts of administration duly performed by a party, nor affect the ownership of fruits produced while the condition was pending. Likewise, fulfillment of the condition does not impair the right acquired by third persons while the condition was pending.
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Article 1919: A contract made by a person without legal capacity
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is relatively null and may be rescinded only at the request of that person or his legal representative.
• “Relatively null”: if the contract is going to be rescinded, it can only be rescinded by the person with the incapacity. The contract remains valid if never attacked by the party subject to the incapacity. This is because relative nullities are made in favor of protecting certain people, so the person not to be protected cannot revoke it. |
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Article 2031: Relative nullity of contracts
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o A contract is relatively null when it violates a rule intended for the protection of private parties, as when a party lacked capacity or did not give free consent at the time the contract was made. A contract that is only relatively null may be confirmed.
o Relative nullity may be invoked only by those persons for whose interest the ground for nullity was established, and may not be declared by the court on its own initiative. |
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Article 2030: Absolute nullity of contracts
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o A contract is absolutely null when it violates a rule of public order, as when the object of a contract is illicit or immoral. A contract that is absolutely null may not be confirmed.
o Absolute nullity may be invoked by any person or may be declared by the court on its own initiative. • All the vices of consent (fraud, duress, etc.) are relative nullities |
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CC 1920 Right to require confirmation or rescission of the contract
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Immediately after discovering the incapacity, a party, who at the time of contracting was ignorant of the incapacity of the other party, may require from that party, if the incapacity has ceased, or from the legal representative if it has not, that the contract be confirmed or rescinded.
• No period of time or mechanism of giving them noticed is mentioned, nor does it state a sanction for not responding. • One side (the party not incapacitated at the time of contracting) can require the other to make a choice |
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CC 1921 Rescission of a K for lack of capacity
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Upon rescission of a contract on the ground of incapacity, each party or his legal representative shall restore to the other what he has received thereunder. When restoration is impossible or impracticable, the court may award compensation to the party to whom restoration cannot be made.
• This, in effect, erases the transaction and aims to put the parties back into their prior position before contracting. Restitution is the normal remedy. • If restitution is impossible, the court may award damages to the party to whom restitution cannot be made. • If the thing has been a benefit to you, you must restore. If the thing has not been a benefit to you, it does not need to be restored. See comments to this article. |
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1923 Exception to Ks by unmancipated minor
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A contract by an unemancipated minor may be rescinded on grounds of incapacity except when made for the purpose of providing the minor with something necessary for his support or education, or for a purpose related to his business.
• This gives a minor the power to contract for his own necessaries. If his parents have already provided him with necessaries and he is getting duplicates, those are not necessaries. • When your lack of reason is apparent to the other party, the contract can be rescinded. When it is not apparent, it will not be rescinded. • Minor’s technically can contract for anything and keep the contract as long as they choose not to rescind it. This article prevents the minor from being able to rescind this contract—this point of this article is more to protect the merchant who sells to a minor. |
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CC 1924 Mere representation of majority by an unemancipated minor
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The mere representation of majority by an unemancipated minor does not preclude an action for rescission of the contract. When the other party reasonably relies on the minor's representation of majority, the contract may not be rescinded.
• The mere representation (i.e. lying) that a minor is of age does not prevent him from being able to rescind the contract. • However, if the merchant reasonably relies on the minor’s representation of being of age (i.e. fake i.d.), this will prevent the minor’s ability to rescind the contract. |
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CC 1925 Noninterdicted person deprived of reason; protection of innocent contracting party by onerous title
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A noninterdicted person, who was deprived of reason at the time of contracting, may obtain rescission of an onerous contract upon the ground of incapacity only upon showing that the other party knew or should have known that person's incapacity.
• It is only when the merchant should have known that the person was deprived of reason that the noninterdicted person will be able to rescind the onerous contract. • Gratuitous or other types of contracts are not subject to this restriction. These types can be rescinded easily because the other side didn’t lose anything. |
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Art. 1926. Attack on noninterdicted decedent's contracts
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A contract made by a noninterdicted person deprived of reason at the time of contracting may be attacked after his death, on the ground of incapacity, only when the contract is gratuitous, or it evidences lack of understanding, or was made within thirty days of his death, or when application for interdiction was filed before his death.
• “It evidences lack of understanding”: contract itself evidences that person was crazy |
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Harris v. Ward
• Unemancipated minor bought car and injured 3rd party while driving. The minor will have insurance through the dealor if the sale of the car is valid. However, if the sale is not valid, there is no insurance coverage. |
• The court ruled that the sale was valid because the minor didn’t seek to rescind the sale before the accident. As long as the agreement had not been rescinded, it has the effect of a person fully capable of being contracted, and the minor was covered by insurance.
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Farrar v. Swedish Health Spa
• Minor signed contract for 2 year membership at health spa and charged to fee to her dad’s credit card. She never used the facility and never ratified the contract after reaching the age of majority. P and her father rescinded the agreement and wanted the fees back for the health spa membership. |
• Rule: a minor can validly contract for necessaries for his support or education and can accept a contract of mandate under certain circumstances; other contracts of a minor may be ratified.
o This contract is not for a necessity and there is no evidence that the minor was authorized to use her father’s credit card. • Rule: a natural obligation is one which cannot be enforced by action, but which is binding on the party who makes it, in conscience and according to natural justice. o The court says that this is not a natural obligation on the part of her father because no advantage accrued to the minor, because no use was made of the spa facilities. • Rule: no intention to ratify will be inferred when the act can be otherwise explained o The father paid the membership fee by paying his credit card bill, but this does not necessarily imply an intent to ratify his daughter’s agreement. To refuse to pay the credit card bill may result in interest charges, damage to his credit rating or cancellation of the card. |
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Julius Cohen Jeweler, Inc. v. Succession of Jumonville
• Jeweler met senator and senator bought jewelry. Senator’s family initiated interdict suit to have him declared incapable of taking care of himself and his estate. Senator flew in jeweler and bought lots of jewelry, and jeweler found out about interdiction suit after. Senator died before judgment of interdiction was ever rendered against him. |
• Rule: all persons are presumed capable of contracting, except those who have been declared incapable by law
• Rule: the acts of a deceased person may not be attacked unless a petition for his interdiction was filed, or a judgment of interdiction was rendered before his death. • Rule: where a judgment of interdiction is rendered, the judgment of interdiction is conclusive evidence of an incapacity to contract. This judgment restricts the person interdicted from exercising his civil rights, such as the right to sue and be sued in his own name, the right to manage his own estate, and the right to enter into contracts. • Rule: in the absence of an interdiction suit, a party attacking the contract has the burden of proving: (1) that the alleged incompetent was deprived of reason at the time of contracting, and (2) that the other party knew or should have known of his incapacity. o No evidence that D was notoriously insane or that P should have known that he was incapable of contracting. |
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Articles 389 and 390, Interdictions
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Article 389: A court may order the full interdiction of a natural person of the age of majority, or an emancipated minor, who due to an infirmity, is unable consistently to make reasoned decisions regarding the care of his person and property, or to communicate those decisions, and whose interests cannot be protected by less restrictive means.
• Seems to be a measure of last resort Article 390: A court may order the limited interdiction of a natural person of the age of majority, or an emancipated minor, who due to an infirmity is unable consistently to make reasoned decisions regarding the care of his person or property, or any aspect of either, or to communicate those decisions, and whose interests cannot be protected by less restrictive means. |
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Article 1927: Consent
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• 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. |
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Article 1928 Irrevocable Offer
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• An offer that specifies a period of time for acceptance is irrevocable during that time.
• When the offeror manifests an intent to give the offeree a delay within which to accept, without specifying a time, the offer is irrevocable for a reasonable time. |
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Article 1928. Irrevocable Offer
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An offer that specifies a period of time for acceptance is irrevocable during that time.
When the offeror manifests an intent to give the offeree a delay within which to accept, without specifying a time, the offer is irrevocable for a reasonable time. |
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Article 1929. Expiration of irrevocable offer for lack of acceptance
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An irrevocable offer expires if not accepted within the time prescribed in the preceding Article.
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Article 1930. Revocable offer
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An offer not irrevocable under Civil Code Article 1928 may be revoked before it is accepted.
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Article 1931. Expiration of revocable offer
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A revocable offer expires if not accepted within a reasonable time.
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Article 1932. Expiration of offer by death or incapacity of either party
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An offer expires by the death or incapacity of the offeror or the offeree before it has been accepted.
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Article 1933. Option contracts
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An option is a contract whereby the parties agree that the offeror is bound by his offer for a specified period of time and that the offeree may accept within that time.
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Article 1934. Time when acceptance of an irrevocable offer is effective
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An acceptance of an irrevocable offer is effective when received by the offeror.
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Article 1935. Time when acceptance of a revocable offer is effective
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Unless otherwise specified by the offer or the law, an acceptance of a revocable offer, made in a manner and by a medium suggested by the offer or in a reasonable manner and by a reasonable medium, is effective when transmitted by the offeree.
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Article 1936. Reasonableness of manner and medium of acceptance
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A medium or a manner of acceptance is reasonable if it is the one used in making the offer or one customary in similar transactions at the time and place the offer is received, unless circumstances known to the offeree indicate otherwise.
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Article 1937. Time when revocation is effective
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A revocation of a revocable offer is effective when received by the offeree prior to acceptance.
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Article 1938. Reception of revocation, rejection, or acceptance
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A written revocation, rejection, or acceptance is received when it comes into the possession of the addressee or of a person authorized by him to receive it, or when it is deposited in a place the addressee has indicated as the place for this or similar communications to be deposited for him.
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Article 1939. Acceptance by performance
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When an offeror invites an offeree to accept by performance and, according to usage or the nature or the terms of the contract, it is contemplated that the performance will be completed if commenced, a contract is formed when the offeree begins the requested performance.
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Article 1940. Acceptance by only completed performance
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When, according to usage or the nature of the contract, or its own terms, an offer made to a particular offeree can be accepted only by rendering a completed performance, the offeror cannot revoke the offer, once the offeree has begun to perform, for the reasonable time necessary to complete the performance. The offeree, however, is not bound to complete the performance he has begun.
The offeror's duty of performance is conditional on completion or tender of the requested performance. |
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Article 1941. Notice of commencement of performance
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When commencement of the performance either constitutes acceptance or makes the offer irrevocable, the offeree must give prompt notice of that commencement unless the offeror knows or should know that the offeree has begun to perform. An offeree who fails to give the notice is liable for damages.
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Article 1942. Acceptance by silence
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When, because of special circumstances, the offeree's silence leads the offeror reasonably to believe that a contract has been formed, the offer is deemed accepted.
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Article 1943. Acceptance not in accordance with offer
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An acceptance not in accordance with the terms of the offer is deemed to be a counteroffer.
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Article 1944. Offer of reward made to the public
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An offer of a reward made to the public is binding upon the offeror even if the one who performs the requested act does not know of the offer.
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Article 1945. Revocation of an offer of reward made to the public
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An offer of reward made to the public may be revoked before completion of the requested act, provided the revocation is made by the same or an equally effective means as the offer.
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Article 1946. Performance by several persons
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Unless otherwise stipulated in the offer made to the public, or otherwise implied from the nature of the act, when several persons have performed the requested act, the reward belongs to the first one giving notice of his completion of performance to the offeror.
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Article 1947. Form contemplated by parties
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When, in the absence of a legal requirement, the parties have contemplated a certain form, it is presumed that they do not intend to be bound until the contract is executed in that form.
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Article 1966. No obligation without cause
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An obligation cannot exist without a lawful cause.
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Article 1967. Cause defined; detrimental reliance
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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. Recovery may be limited to the expenses incurred or the damages suffered as a result of the promisee’s reliance on the promise. Reliance on a gratuitous promise made without required formalities is not reasonable.
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Article 1968. Unlawful cause
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The cause of an obligation is unlawful when the enforcement of the obligation would produce a result prohibited by law or against public policy.
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Article 1969. Cause not expressed
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An obligation may be valid even though its cause is not expressed.
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Article 1970. Untrue expression of cause
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When the expression of a cause in a contractual obligation is untrue, the obligation is still effective if a valid cause can be shown.
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Article 1971. Freedom of parties
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Parties are free to contract for any object that is lawful, possible, and determined or determinable.
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Article 1972. Possible or impossible object
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A contractual object is possible or impossible according to its own nature and not according to the parties' ability to perform.
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Article 1973. Object determined as to kind
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The object of a contract must be determined at least as to its kind.
The quantity of a contractual object may be undetermined, provided it is determinable. |
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Article 1974. Determination by third person
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If the determination of the quantity of the object has been left to the discretion of a third person, the quantity of an object is determinable.
If the parties fail to name a person, or if the person named is unable or unwilling to make the determination, the quantity may be determined by the court. |
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Article 1975. Output or requirements
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The quantity of a contractual object may be determined by the output of one party or the requirements of the other.
In such a case, output or requirements must be measured in good faith. |
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Article 1976. Future things
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Future things may be the object of a contract.
The succession of a living person may not be the object of a contract other than an antenuptial agreement. Such a succession may not be renounced. |
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Article 1977. Obligation or performance by a third person
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The object of a contract may be that a third person will incur an obligation or render a performance.
The party who promised that obligation or performance is liable for damages if the third person does not bind himself or does not perform. |
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Article 1948. Vitiated consent
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Consent may be vitiated by error, fraud, or duress.
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Article 1949. Error vitiates consent
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Error vitiates consent only when it concerns a cause without which the obligation would not have been incurred and that cause was known or should have been known to the other party.
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Article 1950. Error that concerns cause
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Error may concern a cause when it bears on the nature of the contract, or the thing that is the contractual object or a substantial quality of that thing, or the person or the qualities of the other party, or the law, or any other circumstance that the parties regarded, or should in good faith have regarded, as a cause of the obligation.
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Article 1951. Other party willing to perform
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A party may not avail himself of his error if the other party is willing to perform the contract as intended by the party in error.
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Article 1952. Rescission; liability for damages
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A party who obtains rescission on grounds of his own error is liable for the loss thereby sustained by the other party unless the latter knew or should have known of the error.
The court may refuse rescission when the effective protection of the other party's interest requires that the contract be upheld. In that case, a reasonable compensation for the loss he has sustained may be granted to the party to whom rescission is refused. |
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Article 1953. Fraud may result from misrepresentation or from silence
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Fraud is a misrepresentation or a suppression of the truth made with the intention either to obtain an unjust advantage for one party or to cause a loss or inconvenience to the other. Fraud may also result from silence or inaction.
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Article 1954. Confidence between the parties
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Fraud does not vitiate consent when the party against whom the fraud was directed could have ascertained the truth without difficulty, inconvenience, or special skill.
This exception does not apply when a relation of confidence has reasonably induced a party to rely on the other's assertions or representations. |
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Article 1955. Error induced by fraud
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Error induced by fraud need not concern the cause of the obligation to vitiate consent, but it must concern a circumstance that has substantially influenced that consent.
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Article 1956. Fraud committed by a third person
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Fraud committed by a third person vitiates the consent of a contracting party if the other party knew or should have known of the fraud.
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Article 1957. Proof for Fraud
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Fraud need only be proved by a preponderance of the evidence and may be established by circumstantial evidence.
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Article 1958. Damages
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The party against whom rescission is granted because of fraud is liable for damages and attorney fees.
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Article 1959. Nature of Duress
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Consent is vitiated when it has been obtained by duress of such a nature as to cause a reasonable fear of unjust and considerable injury to a party's person, property, or reputation.
Age, health, disposition, and other personal circumstances of a party must be taken into account in determining reasonableness of the fear. |
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Article 1960: Duress directed against third persons
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Duress vitiates consent also when the threatened injury is directed against the spouse, an ascendant, or descendant of the contracting party.
If the threatened injury is directed against other persons, the granting of relief is left to the discretion of the court. |
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Article 1961. Duress by third persons
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Consent is vitiated even when duress has been exerted by a third person.
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Article 1962. Threat of exercising a right
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A threat of doing a lawful act or a threat of exercising a right does not constitute duress.
A threat of doing an act that is lawful in appearance only may constitute duress. |
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Article 1963. Contract with a party in good faith
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A contract made with a third person to secure the means of preventing threatened injury may not be rescinded for duress if that person is in good faith and not in collusion with the party exerting duress.
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Article 1964. Damages
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When rescission is granted because of duress exerted or known by a party to the contract, the other party may recover damages and attorney fees.
When rescission is granted because of duress exerted by a third person, the parties to the contract who are innocent of the duress may recover damages and attorney fees from the third person. |
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Article 1978. Stipulation for a third party
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A contracting party may stipulate a benefit for a third person called a third party beneficiary.
Once the third party has manifested his intention to avail himself of the benefit, the parties may not dissolve the contract by mutual consent without the beneficiary's agreement. |
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Article 1979. Revocation 3rd Party Contract
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The stipulation may be revoked only by the stipulator and only before the third party has manifested his intention of availing himself of the benefit.
If the promisor has an interest in performing, however, the stipulation may not be revoked without his consent. |
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Article 1980. Revocation or refusal 3rd party
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n case of revocation or refusal of the stipulation, the promisor shall render performance to the stipulator.
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Article 1981. Rights of beneficiary and stipulator
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The stipulation gives the third party beneficiary the right to demand performance from the promisor.
Also the stipulator, for the benefit of the third party, may demand performance from the promisor. |
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Article 1982. Defenses of the promisor
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The promisor may raise against the beneficiary such defenses based on the contract as he may have raised against the stipulator.
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Article 2013. Obligee’s right to dissolution
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When the obligor fails to perform, the obligee has a right to the judicial dissolution of the contract or, according to the circumstances, to regard the contract as dissolved. In either case, the obligee may recover damages.
In an action involving judicial dissolution, the obligor who failed to perform may be granted, according to the circumstances, an additional time to perform. |
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Article 2014. Importance of failure to perform
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A contract may not be dissolved when the obligor has rendered a substantial part of the performance and the part not rendered does not substantially impair the interest of the obligee.
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Article 2015. Dissolution after notice to perform
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Upon a party's failure to perform, the other may serve him a notice to perform within a certain time, with a warning that, unless performance is rendered within that time, the contract shall be deemed dissolved. The time allowed for that purpose must be reasonable according to the circumstances.
The notice to perform is subject to the requirements governing a putting of the obligor in default and, for the recovery of damages for delay, shall have the same effect as a putting of the obligor in default. |
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Article 2016. Dissolution without notice to perform
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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.
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Article 2017. Express dissolution clause
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The parties may expressly agree that the contract shall be dissolved for the failure to perform a particular obligation. In that case, the contract is deemed dissolved at the time it provides for or, in the absence of such a provision, at the time the obligee gives notice to the obligor that he avails himself of the dissolution clause.
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Article 2018. Effects of dissolution
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Upon dissolution of a contract, the parties shall be restored to the situation that existed before the contract was made. If restoration in kind is impossible or impracticable, the court may award damages.
If partial performance has been rendered and that performance is of value to the party seeking to dissolve the contract, the dissolution does not preclude recovery for that performance, whether in contract or quasi-contract. |
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Article 2019. Contracts for continuous or periodic performance
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In contracts providing for continuous or periodic performance, the effect of the dissolution shall not be extended to any performance already rendered.
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Article 2021. Rights of third party in good faith
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Dissolution of a contract does not impair the rights acquired through an onerous contract by a third party in good faith.
If the contract involves immovable property, the principles of recordation apply to a third person acquiring an interest in the property whether by onerous or gratuitous title. |
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Article 2022. Refusal to perform
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Either party to a commutative contract may refuse to perform his obligation if the other has failed to perform or does not offer to perform his own at the same time, if the performances are due simultaneously.
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Article 2023. Security for performance
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If the situation of a party, financial or otherwise, has become such as to clearly endanger his ability to perform an obligation, the other party may demand in writing that adequate security be given and, upon failure to give that security, that party may withhold or discontinue his own performance.
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Article 2024. Contract terminated by a party’s initiative
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A contract of unspecified duration may be terminated at the will of either party by giving notice, reasonable in time and form, to the other party.
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Article 1986. Right of the obligee
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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 a 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. |
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Article 1987. Right to restrain obligor
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The obligor may be restrained from doing anything in violation of an obligation not to do.
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Article 1988. Judgment may stand for act
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A failure to perform an obligation to execute an instrument gives the obligee the right to a judgment that shall stand for the act.
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Article 1989. Damages for delay
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Damages for delay in the performance of an obligation are owed from the time the obligor is put in default.
Other damages are owed from the time the obligor has failed to perform. |
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Article 1990. Obligor put in default by arrival of term
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When a term for the performance of an obligation is either fixed, or is clearly determinable by the circumstances, the obligor is put in default by the mere arrival of that term. In other cases, the obligor must be put in default by the obligee, but not before performance is due.
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Article 1991. Manners of putting in default
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An obligee may put the obligor in default by a written request of performance, or by an oral request of performance made before two witnesses, or by filing suit for performance, or by a specific provision of the contract.
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Article 1992. Risk devolves upon the obligor
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If an obligee bears the risk of the thing that is the object of the performance, the risk devolves upon the obligor who has been put in default for failure to deliver that thing.
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Article 1993. Reciprocal obligations
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In case of reciprocal obligations, the obligor of one may not be put in default unless the obligor of the other has performed or is ready to perform his own obligation.
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Article 2005. Secondary obligation
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Parties may stipulate the damages to be recovered in case of nonperformance, defective performance, or delay in performance of an obligation.
That stipulation gives rise to a secondary obligation for the purpose of enforcing the principal one. |
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Article 2007. Stipulated damages or performance
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An obligee may demand either the stipulated damages or performance of the principal obligation, but he may not demand both unless the damages have been stipulated for mere delay.
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Article 2008. Failure to perform justified
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An obligor whose failure to perform the principal obligation is justified by a valid excuse is also relieved of liability for stipulated damages.
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Article 2009. Obligee not bound to prove damage
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An obligee who avails himself of a stipulated damages clause need not prove the actual damage caused by the obligor's nonperformance, defective performance, or delay in performance.
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Aricle 2010. Obligor put in default
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An obligee may not avail himself of a clause stipulating damages for delay unless the obligor has been put in default.
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Article 2012. Stipulated damages may not be modified
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Stipulated damages may not be modified by the court unless they are so manifestly unreasonable as to be contrary to public policy.
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Article 1994. Obligor liable for failure to perform
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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 delay in performance. |
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Article 1995. Measure of damages
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Damages are measured by the loss sustained by the obligee and the profit of which he has been deprived.
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Article 1996. Obligor in good faith
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An obligor in good faith is liable only for the damages that were foreseeable at the time the contract was made.
Comment b: “foreseeable” is that which would fall into the foresight of a reasonable man. |
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Article 1997. Obligor in bad faith
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An obligor in bad faith is liable for all the damages, foreseeable or not, that are a direct consequence of his failure to perform.
Comment c: bad faith means an intentional and malicious failure to perform. |
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Article 1998. Damages for non-pecuniary loss
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Damages for nonpecuniary loss may be recovered when the contract, because of its nature, is intended to gratify a nonpecuniary 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.
Regardless of the nature of the contract, these damages may be recovered also when the obligor intended, through his failure, to aggrieve the feelings of the obligee. |
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Article 1999. Assessment of damages left to the court
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When damages are insusceptible of precise measurement, much discretion shall be left to the court for the reasonable assessment of these damages.
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Article 2000. Damages for delay measured by interest; no need of proof; attorney fees
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When the object of the performance is a sum of money, damages for delay in performance are measured by the interest on that sum from the time it is due, at the rate agreed by the parties or, in the absence of agreement, at the rate of legal interest as fixed by R.S. 9:3500. The obligee may recover these damages without having to prove any loss, and whatever loss he may have suffered he can recover no more. If the parties, by written contract, have expressly agreed that the obligor shall also be liable for the obligee's attorney fees in a fixed or determinable amount, the obligee is entitled to that amount as well.
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Article 2001. Interest on interest
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Interest on accrued interest may be recovered as damages only when it is added to the principal by a new agreement of the parties made after the interest has accrued.
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Article 2002. Reasonable efforts to mitigate damages
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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.
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Article 2003. Obligee in bad faith
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An 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.
If the obligee's negligence contributes to the obligor's failure to perform, the damages are reduced in proportion to that negligence. |
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Article 2004. Clause that excludes or limits liability
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Any clause is null that, in advance, excludes or limits the 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. |
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Article 1873. Obligor not liable when failure caused by fortuitous event
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An obligor is not liable for his failure to perform when it is caused by a fortuitous event that makes performance impossible.
An obligor is, however, liable for his failure to perform when he has assumed the risk of such a fortuitous event. An obligor is liable also when the fortuitous event occurred after he has been put in default. An obligor is likewise liable when the fortuitous event that caused his failure to perform has been preceded by his fault, without which the failure would not have occurred. |
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Article 1874. Fortuitous event that would have destroyed object in hands of obligee
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An obligor who had been put in default when a fortuitous event made his performance impossible is not liable for his failure to perform if the fortuitous event would have likewise destroyed the object of the performance in the hands of the obligee had performance been timely rendered.
That obligor is, however, liable for the damage caused by his delay. |
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Article 1875. Fortuitous event
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A fortuitous event is one that, at the time the contract was made, could not have been reasonably foreseen.
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Article 1876. Contract dissolved when performance becomes impossible
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When the entire performance owed by one party has become impossible because of a fortuitous event, the contract is dissolved.
The other party may then recover any performance he has already rendered. |
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Article 1877. Fortuitous event that has made performance impossible in part
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When a fortuitous event has made a party's performance impossible in part, the court may reduce the other party's counterperformance proportionally, or, according to the circumstances, may declare the contract dissolved.
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Article 1878. Fortuitous event after obligor performed in part
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If a contract is dissolved because of a fortuitous event that occurred after an obligor has performed in part, the obligee is bound but only to the extent that he was enriched by the obligor's partial performance.
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