Obligations Outline - Spr 2008

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Obligations Outline - Spr 2008 Powered By Docstoc
					Art. 1756. Obligations; definition
                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.
             An obligation is a legal relationship rather than a mere duty to perform
             The term obligor is synonymous with the word debtor and the word obligee is synonymous with the word creditor
             Obligation to give: to transfer to an obligee-creditor the ownership of a thing, to grant someone a real right in a thing;
                such a transfer can take place onerously (involving a return benefit, compensation, or consideration ) or gratuitously…
                whenever an obligation is meant to operate an immediate transfer of a real right it is an obligation to give
                    o In a contract the obligee has the right to demand specific performance, property can be seized in cases of
             Obligation to do: requires the debtor-obligor perform some positive act such as physically delivering a thing;
                performance of an action on the part of the obligor
                    o Usually require the personal and exclusive involvement of the obligor. In such instances where the skill,
                         talent, expertise of the obligor are most important to the obligee, one can speak of a strictly personal
                         obligation as to the obligor
                    o The breach of such an obligation will, most likely, not be susceptible of specific performance… usually gives
                         rise to damages because courts are reluctant to infringe on the personal freedom of the obligor
                    o If the obligation is not personal the obligee can ask for specific performance and the court at its discretion
                         may grant it
             Obligation not to do: abstain from doing something which, under normal circumstances, he would have a right to do
                    o A breach of an obligation not to do may entitle the creditor to demand specific performance, damages and in
                         certain cases the court may authorize the obligee to have the obligor, or a third party, undo what the obligor
                         has done in violation of his obligation not to do
             Obligation of Result: whenever the performance or object of the obligation is so precisely determined as to amount to
                a definite result to be achieved. An obligation to give a specific thing and an obligation not to do something would be
                obligations of result
                    o i.e. §2754
                    o carries with it the presumption that the obligor is at fault whenever the result he was bound to secure has not
                         been achieved at all or not been achieved within a certain period of time – burden of proof is shifted to the
                         defendant to prove that a fortuitous, accidental or uncontrollable event prevented him from rendering his
                         performance as expected
             Obligation of Means: an obligor is expected to use the best possible means available to him, or to act with the utmost
                care and diligence in the performance of his obligation but without guaranteeing a definite result
                    o i.e. §§2683, 2894, 2930… a doctor- usually promises to treat a disease and not necessarily to cure it
                         definitively… to perform obligation according to standards of the profession expected in the
                    o the obligee-plaintiff will have to carry the burden of proof – he will have to show that the obligor-defendant
                         didn’t act with all the care and diligence required of a faithful or prudent administrator

Art. 1757. Sources of obligations
                Obligations arise from contracts and other declarations of will. They also arise directly 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.
        Five formal sources:
            o Contracts and other declarations of will – the will of a person is creative of obligations when it meets the requirements
                necessary to establish a legal relationship binding an obligor to an obligee
            o The law – may impose obligations regardless of any declaration of will or juridical act, or the occurrence of any
                juridical fact on the part of an obligor
            o Offenses – unlawful, voluntary and intentional acts of man
            o Quasi-offenses – aka – quasi-delict – negligence, imprudence or want of skill, lack of intent to cause damage although
                the act itself was voluntary in its perpetration
            o Quasi-contracts or obligations arising without agreement – uni or bi-lateral, management of the affairs of another,
                unjust enrichment/enrichment without cause and payment of a thing not owed
            o   Juridical act – any manifestation of the will of a person (natural or legal entity) meant to have legal effects; with the
                intent to create an obligation; unilateral (donation) or bilateral (sale)
                    o Such an act is unilateral when the will of one person only is sufficient to create an obligation
                    o When two persons are each one bound to the other by an expression of their will, the juridical act entered
                         into is bilateral because two wills have been exchanged to create an obligation
            o   Juridical fact – an event occurring outside the will of a person which, by itself, brings about legal effects


        It is traditional to distinguish natural obligations, which carry fewer legal effects, from civil obligations which carry full legal

Art. 1758. General effects
               A. An obligation may give the obligee the right to:
                        (1) Enforce the performance that the obligor is bound to render;
                        (2) Enforce performance by causing it to be rendered by another at the obligor's expense;
                        (3) Recover damages for the obligor's failure to perform, or his defective or delayed performance.
               B. An obligation may give the obligor the right to:
                        (1) Obtain the proper discharge when he has performed in full;
                        (2) Contest the obligee's actions when the obligation has been extinguished or modified by a legal cause.

Art. 1759. Good faith
              Good faith shall govern the conduct of the obligor and the obligee in whatever pertains to the obligation.
           o General principle which, as such, ought to guide the jurist in his analysis of the law of obligations
               Duty of loyalty
               Duty of cooperation

Civil Obligation: Law, custom, juridical acts and facts… create, compose and compel performance; the essential feature of the civil
        obligation was, and still is, that the creditor-obligee had or has a right of action to compel the obligor to perform
        o In the former civil code it was defined as: a legal tie, which gives the party, which whom it is contracted, the right of
             enforcing its performance by the law

Art. 1760. Moral duties that may give rise to a natural obligation
               A natural obligation arises from circumstances in which the law implies a particular moral duty to render a
                   o Although it expresses the existence of a right in a person, it cannot be a ground for an action to have the
                        natural obligation enforced and there is no prescription
                   o The creditor-obligee has no right of action against the natural obligor
                   o N.O. exist somewhere in the conscience of the individual, but more likely in the conscience of the courts

Art. 1761. Effects of a natural obligation
                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.
                    o A N.O. because it is defined in part as an obligation necessarily creates a right in an obligee. That right,
                         however, is deprived of any action for the enforcement of the obligation which is its counterpart
                    o Freely – a person acting of her own volition without ant compulsion or outside interference
                    o Error is not a ground for relief - error of the law is no excuse §5
                     o   Is a natural obligation heritable and a part of one’s patrimony? As long as a natural obligation has a monetary
                         value and represents the extinction of a debt, there is little doubt that it should be heritable, both actively and
                         passively; it would fall into the patrimonies of both the obligee and the obligor
                     o   Extinguishment of civil obligations
                              o Can a civil obligation be compensated with a natural obligation? We do not believe that it can for the
                                  reason that a natural obligation is not demandable and it is not enforceable by judicial action
                              o The same reasoning would not be valid if the parties mutually agreed to a compensation between a
                                  natural obligation, on the one hand, and a civil obligation, on the other hand. §1901 raises no
                                  obstacle to the freedom of contract enjoyed by the parties in this matter and conventional
                                  compensation is but an illustration of such a freedom to contract

Art. 1762. Examples of circumstances giving rise to a natural obligation
                 Examples of circumstances giving rise to a natural obligation are:
                 (1) When a civil obligation has been extinguished by prescription or discharged in bankruptcy.
                 (2) When an obligation has been incurred by a person who, although endowed with discernment, lacks legal
                 (3) When the universal successors are not bound by a civil obligation to execute the donations and other
        dispositions made by a deceased person that are null for want of form.
                     o This list is only illustrative of the different kinds of natural obligations that may exist
                     o LA courts are in a position to fill gaps in the law by creating as many natural obligations as they may believe
                        to exist in the general principles of law or equity and justice

                                                         KINDS OF OBLIGATIONS

        *Whether or not an obligation can be transferred, inherited, assigned, whether they are a part of one’s patrimony (with
        monetary and commercial value); can the obligation be transferred like a thing?

Art. 1763. Definition
               A real obligation is a duty correlative and incidental to a real right.
                    o Real right – right one holds over a thing, whereas a personal right is one a person has to bring an action
                       against another person
                            o RR – ownership, real servitude
                            o Principal real right – vests in their owner the broadest powers of usus, fructus, and abusus because
                                 they bear directly on the very substance of the thing; i.e. the right of ownership
                            o Accessory real right – they bear on the representative monetary value of a thing rather than on the
                                 thing itself, they are related to a thing and cannot be disassociated from it ; i.e. mortgage, pledge
                    o Real obligation – those obligations incurred as a result of ownership or possession of a thing burdened by a
                       real right (-a right in a thing that can be held against the world)
                            o Based on a thing, must have a thing and a person who can have rights
                    o An obligation, or a duty, owed to a person who can claim a performance because that person is the holder of
                       a real right, i.e. a right to make a direct and immediate (fictitiously without the involvement of an intermediary
                       person) use of a thing; can be held against the world

Art. 1764. Effects of real obligation
                 A real obligation is transferred to the universal or particular successor who acquires the movable or immovable
        thing to which the obligation is attached, without a special provision to that 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.
                    o    A real obligation attaches to a thing – either movable or immovable and are transferred with it without the
                         need of an express assignment or subrogation
                             o There can be no obligation unless there is a thing in existence
                             o The real obligation is transferred with the thing as its accessory

                                                                      Personal Obligations

Art. 1765. Heritable obligation
                An obligation is heritable when its performance may be enforced by a successor of the obligee or against a
        successor of the obligor.
                Every obligation is deemed heritable as to all parties, except when the contrary results from the terms or from the
        nature of the contract.
                A heritable obligation is also transferable between living persons.
                     o Patrimony: the totality of assets and liabilities which are attached to a person and which can be assigned
                         monetary value. Only persons, natural or legal, have a patrimony because only persons can incur liabilities
                         towards others and claim rights against others
                             o A right can be said to be the active component part of a patrimonial relationship in the sense that the
                                  holder of the right has the benefit of the action against the holder
                             o An obligation can be said to be the passive side of a patrimonial relationship since the obligor may
                                  wait passively until asked to perform
                     o There is a presumption that all obligations are heritable – this presumption can be rebutted
                     o The obligation can be transferred to heirs of both the obligor and the obligee
                     o Heritable in the broad sense – not just an heir but third persons to whom an obligation can be assigned;
                         transferable between living persons by juridical acts (inter vivos) as well as mortis causa

Art. 1984. Rights and obligations will pass to successors
                 Rights and obligations arising from a contract are heritable and assignable unless the law, the terms of the contract
        or its nature preclude such effects.

                                                                                        donor - obligor
                                       Unilateral- one obligation
                                    created; it must be accepted in
                                          order to be binding
                                                                                        donee - obligee

                                                                                                          Receive the thing; buyer
                                                                                                            owes price to seller,
                                                             Buyer - obligee/creditor
                                                                                                           obligee to transfer the
                             Sale                                                                                   price
                     Bilateral- creates two
                    obligations; each party
                   owes to the other an ob.                                                                  Owes obligation to
                                                                                                          transfer the thing to the
                                                              Seller - obligor/debtor
                                                                                                            obligee; one will will
                                                                                                              receive the price
Art. 1766. Strictly personal obligation
                 An obligation is strictly personal when its performance can be enforced only by the obligee, or only against the
                 When the performance requires the special skill or qualification of the obligor, the obligation is presumed to be
        strictly personal on the part of the obligor. All obligations to perform personal services are presumed to be strictly
        personal on the part of the obligor.
                 When the performance is intended for the benefit of the obligee exclusively, the obligation is strictly personal on
        the part of that obligee.
                      o i.e. care that a doctor provides to a patient; patient (obligee) is the only person who has the doctor’s (obligor)
                          attention; the patient is the beneficiary of the SPO to him
                      o when only the obligor can perform and when only the obligee can enforce and it is for their benefit
                      o an obligation can also be strictly personal as to the obligee where he would be the only party to have an
                          interest in the performance of the obligation
                      o Can an obligation be strictly personal as to both parties? Yes, i.e. §98 “married persons owe each other
                          fidelity, support, and assistance,” each party to the marriage is both “obligee and obligor” of a strictly
                          personal obligation

                                                   MODALITIES AFFECTING OBLIGATIONS

Art. 1777. Express or implied term
               A term for the performance of an obligation may be express or it may be implied by the nature of the contract.
               Performance of an obligation not subject to a term is due immediately.
                   o It is not defined in the code; but is commonly referred to as the period of time given to a party (obligor) in
                        which to perform their obligation
                   o Time is an event which will occur
                   o Suspensive Term: suspends or delays the right to demand the performance of an obligation until the term
                        occurs; as long as the term has not occurred, the performance of the obligation cannot be demanded by the
                        obligee, even though the obligation itself does exist
                            o i.e. rent being due on the 1st of the month
                            o effects while the term is pending – even though performance is delayed the obligation itself is born
                                 and does exist in the sense that it has created rights and obligations in the parties
                                     o The creditor-obligee cannot demand performance of his obligation from his debtor-obligor
                                         in whose favor the term is established. The obligor enjoys the benefit of defense or
                                         exception based on the suspensive term which protects him
                                     o prescription cannot run against the right of action of that creditor
                                     o Should the obligor perform before the occurrence of the term meant to protect him, his
                                         performance will be valid and binding because he is acting in compliance with an existing
                                         obligation *** review this comment in the précis and how it compares to a natural
                                         obligation*** p 34
                                     o In those circumstances where the term is explicitly stipulated in favor of the creditor-obligee,
                                         there will follow, as a legal consequence, that the obligor could not compel his creditor-
                                         obligee to receive his performance before the occurrence of the term
                                     o The law grants to the obligee the means of protecting his right to that performance… §1771
                                         a fortiori ratione
                                      o   Mere occurrence of the term that is fixed or clearly determinable automatically puts the
                                          obligor in default, the prescriptive period applicable to the obligee’s right will begin to run
                                          from the time of occurrence of the term
                    o Extinctive Term: brings an end to the obligation, extinguishes an existing obligation, brings an end to a
                       binding commitment to perform an obligation… the obligation which existed until then ceases to exist
                           o i.e. end of a lease term
                           o Before the happening of the extinctive term, the obligation is immediately enforceable as any pure
                                and simple obligation would be. The parties may seek enforcement of their rights and be compelled
                                to perform their duties as they had been bound themselves when entering into their contract
                           o Has no retroactive effect in the sense that the “past” remains and only the future is concerned
                 Term can be created by law or judicial decision:
                    o Conventional Term: a term or certain event expressly or impliedly agreed upon between the parties to a
                           o Express Conventional Term: specifically stipulated by the parties to an agreement and which requires
                                that performance take place or end by the date selected or within the period of time upon which the
                                parties agreed
                           o Implied Conventional Term: may be reasonably implied from the nature of the contract or the
                                circumstances. Such an implied term necessarily involves an obligation which cannot be performed
                                instantaneously and one which would require that the obligor do something over a period of time
                    o Legal Term: granted or imposed by law, i.e. 2595
                    o Judicial Term: also called a period of grace, a term granted by a court to a debtor who is sued by his creditor
                       seeking performance of the obligation. The court may grant or deny this term of grace in consideration of the
                       particular situation of the debtor
                    o Interest Protected: since it is meant to delay the performance of an obligation, or extinguish an existing
                       obligation, it is most likely that a term will be protective of the interests of the obligor who is to perform the
                       obligation – rebuttable presumption… a term could also exist for the benefit of both parties to a contract

Art. 1778. Term for performance
                 A term for the performance of an obligation is a period of time either certain or uncertain. It is certain when it is
        fixed. It is 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. It is also uncertain when it is not determinable, in which case the obligation must be performed
        within a reasonable time.
                      o The term consisting in a definite event bound to occur in the course of time, the issue of certainty and
                         uncertainty of the term can only be raised with respect to the exact date or period of time of occurrence of
                         the event selected as the term of obligation
                      o Certain Term: whenever the period of time preceding the occurrence of the event has been fixed
                      o Uncertain Term: when the period of time preceding the occurrence of the definite event or term “is not fixed
                         but is determinable either by the intent of the parties or by the occurrence of a future and certain event. It is
                         also uncertain when it is not determinable, in which case the obligation must be performed within a
                         reasonable time
                              o i.e. selecting the timing of a certain person’s death

Art. 1779. Term presumed to benefit the obligor
                 A term is presumed to benefit the obligor unless the agreement or the circumstances show that it was intended to
        benefit the obligee or both parties.

Art. 1780. Renunciation of a term
                 The party for whose exclusive benefit a term has been established may renounce it.

Art. 1781. Performance before end of term
                Although performance cannot be demanded before the term ends, an obligor who has performed voluntarily
        before the term ends may not recover the performance.

Art. 1782. If the obligor is insolvent
                 When the obligation is such that its performance requires the solvency of the obligor, the term is regarded as
        nonexistent if the obligor is found to be insolvent.

Art. 1783. Impairment or failure of security
                When the obligation is subject to a term and the obligor fails to furnish the promised security, or the security
        furnished becomes insufficient, the obligee may require that the obligor, at his option, either perform the obligation
        immediately or furnish sufficient security. The obligee may take all lawful measures to preserve his right.

Art. 1784. Term for performance not fixed
                When the term for performance of an obligation is not marked by a specific date but is rather a period of time, the
        term begins to run on the day after the contract is made, or on the day after the occurrence of the event that marks the
        beginning of the term, and it includes the last day of the period.

Art. 1785. Performance on term
                 Performance on term must be in accordance with the intent of the parties, or with established usage when the
        intent cannot be ascertained.

        A condition must be understood as an uncertain event which may or may not occur and to which is tied the existence or the
        extinction of a bond of law. This conditional obligation is one whose fate is indefinite

Art. 1767. Suspensive and resolutory condition
                A conditional obligation is one dependent on an uncertain event.
                If the obligation may not be enforced until the uncertain event occurs, the condition is suspensive.
                If the obligation may be immediately enforced but will come to an end when the uncertain event occurs, the
        condition is resolutory.
            o Suspensive condition: an obligation is subjected to a suspensive condition when it may not be enforced until the
                uncertain event occurs; it suspends the existence of the obligation between the parties until the uncertain event occurs
                and, therefore suspends the enforcement of that same obligation, although the bond of law has been formed, no
                obligation is yet in existence
                     o i.e. an insurance contract on a home
            o Resolutory condition: may be immediately enforced but will come to an end when the uncertain event occurs, brings
                to an end an existing bond of law

Art. 1768. Expressed and implied conditions
                Conditions may be either expressed in a stipulation or implied by the law, the nature of the contract, or the intent
        of the parties.
                     o Expressed: when it is specifically referred to by the parties as they do under §1744
                     o Implied by law: i.e. §§ 2604, 2605
                     o Nature of the contract may also imply the existence of a condition, i.e. § 2460
                     o Implied from intent: whenever the circumstances are clearly indicative of consent
Art. 1769. Unlawful or impossible condition
               A suspensive condition that is unlawful or impossible makes the obligation null.
                   o Review material in the précis p42

Art. 1770. Condition that depends on the whim or the will of the obligor
               A suspensive condition that depends solely on the whim of the obligor makes the obligation null.
               A resolutory condition that depends solely on the will of the obligor must be fulfilled in good faith.
           o Whether suspensive or resolutory – classified under three adjectives: casual, potestative, and mixed
           o Casual: event which is totally out of the control of men to bring about; depends on chance and is in no way in the
               power or either the creditor or of the debtor; i.e. I will give you my civil code if it rains on Monday
           o Potestative: as humans we have some control of a certain event; i.e. it is within my power to threaten you
                   o Simply potestative: equivalent of a mixed condition, “results of my actions were contingent on another
                        person acting with me, but I have no control over the other person”
                   o Absolutely potestative: 100% within the control or power of a person to bring about (such a thing doesn’t
                        really exist because we don’t live in a vacuum); many circumstances can limit an absolute obligation ; really
                        never existed
           o Mixed: combination of the two; accident on the way to work, cant control the accident but you can control how you
               are driving… don’t have full control
           o ** Whenever a suspensive condition depends solely on the whim of the obligor, the whole obligation would be null;
               purely potestative suspensive condition on the part of the obligor the obligation was considered null
                             o Reasoning: an obligor who would agree to be bound under such a condition would not really be
                                  bound, since he would be in full and arbitrary control of that decision and would merely intend to
                                  deceive the other party
                             o A contrario sensu: it is proper to say that, whenever a suspensive condition would depend solely on
                                  the whim of the obligee, the obligation would then be valid. The reason is to be found in the fact that
                                  the obligor himself would be bound by his own unilateral promise.
                             o Whenever a resolutory condition depends solely on the will of the obligor it must be fulfilled in good

Art. 1771. Obligee's right pending condition
                The obligee of a conditional obligation, pending fulfillment of the condition, may take all lawful measures to
        preserve his right.
            o As long as the occurrence of the uncertain event has not taken place, and for whatever length of time its fulfillment is
                pending, the suspensive condition prevents the rights and obligations of the parties from coming into existence.
                Although a juridical act has been formed, it is largely without any effect. The parties must wait for their rights and
                obligations to be born, if and when the condition is fulfilled
            o A creditor under a suspensive condition cannot demand performance from his obligor since he is only a conditional
                creditor and may never become a pure and simple creditor
            o Prescription cannot run against the creditor since there is no right yet against which prescription could run
            o If there is any financial risk of loss attached to the performance of the conditional obligation that risk is on the party
                who is the owner of the thing that perishes while the condition is pending
            o As long as the condition is pending, one cannot ignore the fact that a juridical act has been formed, and that there is,
                at least, the hope that the suspensive condition will be fulfilled. This hope must be protected since it may have a
                monetary value and, as such, be part of the parties’ patrimonies
            o An obligation under a resolutory condition is fully in existence as soon as it has been entered into and performances
                are due, whether unilaterally or bilaterally. The obligation should be considered, to a large extent, as if it were pure and
                 o   Conduct is retroactive; risk: should the event occur it would wipe out all performance entered into by the parties

Art. 1772. Fault of a party
                 A condition is regarded as fulfilled when it is not fulfilled because of the fault of a party with an interest contrary
        to the fulfillment.

Art. 1773. Time for fulfillment of condition that an event shall occur
                 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.

Art. 1774. Time for fulfillment of condition that an event shall not occur
                If the condition is that an event shall not occur within a fixed time, it is considered as fulfilled once that time has
        elapsed without the event having occurred.
                The condition is regarded as fulfilled whenever it is certain that the event will not occur, whether or not a time has
        been fixed.

Art. 1775. Effects retroactive
                 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.
             o Unless the parties to a conditional juridical act provide otherwise, a condition produces its retroactive effects
                 automatically, as soon as it happens. This statement means that, fictionally and conceptually, the effects of the
                 condition date back to the time when the juridical act with the condition was entered into
             o As a result, and at the risk of formulating an excessive simplification, what has been done in the meantime while the
                 condition was pending, and thus before its occurrence, should be undone or, vice-versa, what has not been done
                 while the condition was pending should have been done
             o Some of the effects flowing from the retroactivity of the suspensive condition can be listed as follows… p52

Art. 1776. Contract for continuous or periodic performance
                 In a contract for continuous or periodic performance, fulfillment of a resolutory condition does not affect the
        validity of acts of performance rendered before fulfillment of the condition.

                                                  Conjunctive and Alternative Obligations

                 o   An obligor may bind himself to multiple items of performance in such a manner that he cannot be said to have
                     performed his obligation and extinguished it until all items have been fully carried out. The obligation thereby
                     created may involve either several different or identical items of performance which are bound in such a way as to
                     form a universality of things.
                 o   Although each item of performance can be regarded as the object of a separate obligation, it remains that the
                     obligor is bound to perform them all… a conjunctive obligation is therefore comprised of constituent obligations
                     o Each obligation may be subjected to a particular legal regime which may vary from one to the other
                     o Yet the intent of the parties is that each obligation is but a part of a whole which provides the raison d’être of
                         each of its component parts

Art. 1807. Conjunctive obligation
                An obligation is conjunctive 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.
                The parties may provide that the failure of the obligor to perform one or more items shall allow the obligee to
        demand the immediate performance of all the remaining items.
                    o The obligor may be in breach of the whole conjunctive obligation itself, and not only of a constituent
                        obligation, should he fail to perform any one of the items involved and expected of him
                    o A universality of identical things or items will become the object of a conjunctive obligation when all of these
                        things or items are distinctively listed or enumerated and still bound together by a connecting link which
                        brings them all under one single universality
                            o i.e. paying in installments

Art. 1808. Alternative obligation
                An obligation is alternative when an obligor is bound to render only one of two or more items of performance.
                    o An alternative obligation requires that a choice be made between two or more items of performance so that
                        the obligor will be released from his obligation whenever he will have carried out one of those items of
                    o The essence of an alternative obligation is to place two (or more) items of performance on the same plane so
                        that they are all principle items.
                    o No single item is an accessory to another
                    o If the obligation deals with two objects, they are equally due and the performance of either one will be
                        sufficient to extinguish the whole obligation
                    o *Watch out for situations where it looks like there is a choice between performances but only one actual
                    o It is possible to see in an alternative obligation a sort of insurance granted to an obligee-creditor, a kind of
                        guarantee of payment assuring him that at least one item of performance out of two or more will be conveyed
                        to him

Art. 1809. Choice belongs to the obligor
                When an obligation is alternative, the choice of the item of performance belongs to the obligor unless it has been
        expressly or impliedly granted to the obligee.
                    o Regardless of who has the choice they are required to exercise it in good faith
                    o Presumption (rebuttable) that the choice belongs to the obligor stems from the civil code tending to favor a
                        party to an obligation who carries a burden, the burden of performing and who, in general, may be the
                        weaker of the two parties, the less informed

Art. 1810. Delay in exercising choice
                When the party who has the choice does not exercise it after a demand to do so, the other party may choose the
        item of performance.
                    o Party given the benefit of the choice must exercise within term agreed upon or within a reasonable time
                    o If the obligor is late the obligee can choose – by delaying the obligor has waived the benefit of term which
                        law grants (for not carrying out obligation in good faith)

Art. 1811. Obligor may not choose part of one item
                 An obligor may not perform an alternative obligation by rendering as performance a part of one item and a part of
                    o Whenever the choice of one item of performance has been made by the proper party and in due time, that
                        item is owed in its entirety
                     o   Once selected, the item becomes the only object of an obligation which, from alternative, has become pure
                         and simple
                     o   The exercise of choice has extinguished the alternative feature of the obligation
                     o   Although a choice must be made between the items, each one remains an entity and is not susceptible of
                         partial performance
                     o   The forms and modalities of transfer of ownership of the item will vary according to the nature of the object
                         selected to be delivered by the obligor
                     o   At what point in time is the right of ownership of an item passed from one party to another?
                              o Consider the exercise of the choice as tantamount to the occurrence of a suspensive condition (either
                                  potestative or mixed) and to state, therefore, that there ought to be retroactivity of the effects of the
                                  exercise of the choice

Art. 1812. Impossibility or unlawfulness of one item of performance
                 When the choice belongs to the obligor and one of the items of performance contemplated in the alternative
        obligation becomes impossible or unlawful, regardless of the fault of the obligor, he must render one of those that remain.
                 When the choice belongs to the obligee and one of the items of performance becomes impossible or unlawful
        without the fault of the obligor, the obligee must choose one of the items that remain. If the impossibility or unlawfulness
        is due to the fault of the obligor, the obligee may choose either one of those that remain, or damages for the item of
        performance that became impossible or unlawful.
                     o The risk of loss of one item is for the obligor to bear and since the obligee had not been given the choice he
                          must accept the performance of the remaining item
                     o In the case of the second paragraph – the damages may exceed the value of the item destroyed since they are
                          measured by the loss sustained by the obligee and the profit of which he has been deprived

Art. 1813. Impossibility or unlawfulness of all items of performance
                If all of the items of performance contemplated in the alternative obligation become impossible or unlawful
        without the obligor's fault, the obligation is extinguished.
                     o This occurs when items are destroyed by a fortuitous event before the obligor was put in default to exercise
                          his choice
                     o The whole of the obligation is extinguished regardless of which party had been granted the choice
                     o The obligor is excused from performance and the obligee must bear the risk of loss of either performance –
                          because he can no longer demand that the obligor perform – but the obligor bears the financial loss since he
                          can no longer transfer anything to the obligee

Art. 1814. Obligor's liability for damages
                 When the choice belongs to the obligor, if all the items of performance contemplated in the alternative obligation
        have become impossible and the impossibility of one or more is due to the fault of the obligor, he is liable for the
        damages resulting from his failure to render the last item that became impossible.
                 If the impossibility of one or more items is due to the fault of the obligee, the obligor is not bound to deliver any
        of the items that remain.
                      o If the choice belonged to the obligor – the obligor will owe at least the value of the second item which he
                          destroyed and, possibly, the profit of which the obligee was derived
                              o After the destruction of the first item of performance the second one had become pure and simple –
                                  it is as if that remaining obligation had been the only one in existence from the beginning
                      o If the choice belonged to the obligee – it can be said that the obligee has been prevented from exercising his
                          choice between the items of performance of the obligations because of the obligor’s fault
                              o He ought to be given a new choice between the values of the two original items
                              o   Real subrogation: where a thing (value) is substituted to another thing (the original item of
                              o With destruction by a fortuitous event the obligee should also be granted the additional right to
                                  recede from the contract
                     o   If the choice belonged to the obligor and the impossibility was caused by the fault of the obligee – the
                         obligor who has, thereby, been deprived of his right to choose between the items may not be compelled to
                         deliver any remaining item

Facultative Obligations: an obligation is facultative when an obligor owes one particular principle item of performance and when, at
   the same time, he may be released of that performance by tendering another item as a substitute item which will take the place of
   the principle item of performance
   o Characterized by the existence of a principle item which is the only one truly due under the obligation but, to that item the
       obligor, at the moment of performing may, of his own volition, substitute another item for his performance
   o Examples in the civil code: §§2589, 2591, 234, 2623, 2624
   o Distinguished from others
            o Alternative v. Facultative: the two kinds of obligations will differ with respect to the risk of loss of an item destroyed
                by fortuitous event
            o As opposed to an alternative obligation – if the principle object of a facultative obligation is destroyed by a fortuitous
                event, no alternate item is owed by the obligor – the substitute or facultative item or object does not enter the realm
                of the obligation and cannot be demanded by specific performance
            o The legal nature and regime of a facultative obligation are determined by the nature of the principle object of the
            o The legal regime of the obligation is defined at the outset as soon as the facultative obligation is formed since only one
                item of performance is owed under that obligation (not the case with an alternative obligation)
                      i.e. §2624: the movable or immovable nature of the obligation is controlled by the immovable or movable
                          nature of the thing, object of the transaction
            o When a facultative obligation exists, it gives the obligor the ability to recede freely and willingly from the contract with
                the full knowledge and consent of the obligee. A FO is not a means of pressure in the hands of an obligee to compel
                his obligor to perform the principal obligation as stipulated damages can be looked upon
   o They can be identified by the combination of the following criteria:
            o Gives the obligor the unrestricted freedom to choose between at least two items of performance where one is less
                burdensome than the other
            o There is different emphasis on the two items; one item is considered as the principal and only object of a primary
                obligation (with an alternative obligation they are on the same level)
            o The obligee has a right of action for the performance of the primary obligation; the obligee doesn’t have the right to
                demand performance of the facultative obligation
            o The FO will most often show a more or less important disparity in the values of the items of performance; the
                facultative item will bear a value usually inferior to that of the item of the principal performance

                                                      Obligations with Multiple Persons

Art. 1786. Several, joint, and solidary obligations
               When an obligation binds more than one obligor to one obligee, or binds one obligor to more than one obligee, or
        binds more than one obligor to more than one obligee, the obligation may be several, joint, or solidary.

Art. 1787. Several obligations; effects
                When each of different obligors owes a separate performance to one obligee, the obligation is several for the
                When one obligor owes a separate performance to each of different obligees, the obligation is several for the
                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.
                    o This situation is very rare
                    o “the obligation” – each obligor owes his own performance – separate and distinct performances – each
                         performance can be subjected to a different legal regime
                             o Each one of them is independently bound to a separate and distinct performance not owed in any
                                  manner by the other obligors
                    o If performances are different they are bound separately/severally
                    o If performance identical it may be a more difficult situation
                    o Does not require any extensive treatment since a several obligation must be considered as being merely the
                         gathering under one source of multiple but separate obligations creating as many different bonds of law as
                         there are parties
                    o The insolvency of one “several” obligor to perform his obligation can have no impact at all on the
                         performances of their obligations by other obligors
                    o The remedies or rights of action of the obligee are particular to each one of the several obligors

Art. 1788. Joint obligations for obligors or obligees
                 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.
                 When one obligor owes just one performance intended for the common benefit of different obligees, neither of
        whom is entitled to the whole performance, the obligation is joint for the obligees.
                      o In the civil law the term joint has a substantive law meaning
                      o To be distinguished from common law meaning which is procedural
                      o Presumption laid down in the law – multiple obligors are bound jointly
                      o i.e. §§2817 – Partnership Debts; Liability, 1416 – Liability of Universal Successors to creditors
             Creditor can demand only his performance from each one of the obligors – no additional burdens on the obligor
                      o §2600 – lesion in a contract of sale, it is a remedy available to the seller of a immovable
                                Sells the immovable at less than half the value of it
                                There is a presumption of error or duress
                                So you are offered a remedy – you can get immovable or damages (payment of additional price)
             Prescription: if the obligee interrupts prescription it is only for the one obligor affected
                      o No effect on the running of prescription on the other obligors
                      o §3503 – Solidary obligors (an a contrario argument); this rule doesn’t control for joint obligors – in solidarity
                          each obligor represents the other – as if there was only one obligor – it is not the rationale behind joint
             Default – 1989: “the obligor”, no representation of one obligor by others
             If one joint obligor is insolvent the burden of one obligor isn’t shifted from one to another, the obligee doesn’t get his
                 money** results in loss
             Release/remission of debt – mode of extinction of obligation; it is the creditor telling his obligee – your debt is
                 forgiven, i.e. §1888… obligee extinguishes the obligation and the obligor is gone, he has received a benefit * the debt
                 is extinguished to that extent
             **In La. when an obligee wants to sue his joint obligors – he must sue them separately, unless he obtains joinder
                 (LACP §641-647)
                      o The obligee should join the obligors in the lawsuit
                      o Each one must be given the opportunity to defend himself personally (remember that each obligor may have
                          their own legal regime
Art. 1789. Divisible and indivisible joint obligation
                 When a joint obligation is divisible, each joint obligor is bound to perform, and each joint obligee is entitled to
        receive, only his portion.
                 When a joint obligation is indivisible, joint obligors or obligees are subject to the rules governing solidary
        obligors or solidary obligees.

        Sources of Solidarity
            When reading below make sure to keep §1796 (and the comments) in mind where it states that solidarity is not
               presumed; i.e. §§2910,3045; since it imposes a risk on the obligee and a burden on the obligor
        The Law:
           o CC offers several examples of passive solidarity imposed by law – two different categories
                    o One instance is built on the presumed intent of the parties bound solidarily – the law simply presumes that
                        these parties want or would agree to be bound in solido if given the opportunity to express their intent; i.e.
                    o A second category of cases of legal solidarity can be said to find its rationale in a form of penalty to be
                        imposed on obligors because of their joint participation in a wrongful act; i.e. 2324-A

        From Contract:
           o A contract is the law between the parties and, within the limitations or authorizations set by the law, these parties may
              renounce rights granted merely for the protection of private interests
           o The contractual stipulation of solidarity need not be couched in express or formal terms – the inclusion, in a contract,
              of specific concepts such as in solido or solidarity is not necessary as long as the parties’ intent can be properly
              interpreted by a court as disclosing their willingness to be bound solidarily
           o *** Where a definite ambiguity exists or a doubt arises as to whether a contractual obligation should be characterized
              as solidary or not, the presumption that the obligation is joint should control
           o *** Solidarity being an exception to the common standard type of obligations with multiple persons, that exception
              should be construed narrowly and strictly so as to allow the principle of joint obligations to prevail since it conveys
              the presumed intent of the parties that they are unwilling to take on more than their virile share unless they consent to

Art. 1790. Solidary obligations for obligees
                An obligation is solidary for the obligees when it gives each obligee the right to demand the whole performance
        from the common obligor.
            o Solidarity must be understood both as a legal fictions and as a practical necessity
            o It is a bar to the division of an obligation as a result of a particular feature attached to the bond of law binding
                together multiple persons
            o Active solidarity: multiple obligees; effects – rare in actual practice
                    o Risk: when one obligee receives payment he has received for all *other obligees may be at risk of not getting
                    o §§1790, 1791 – each one of the solidary obligees is vested with the right to demand performance of the whole
                        obligation and to receive the same whole performance from the obligor
                             o When the performance has been rendered the obligation is extinguished and the obligor is released;
                                 even though the benefit of the obligation is to be divided among the multiple obligees
                             o Should a solidary obligee interrupt prescription of the action against the obligor, the other solidary
                                 obligees will benefit from such an action
                 o    Reasoning a pari ratione– should a solidary obligee put an obligor into default the benefit of this action
                      will be shared with the other solidary obligees - damages for delay in performance will be owed to all
                      the solidary obligees
                 o Should the obligor be sued by one solidary obligee or should he have been put in default by one of
                      them, the obligor would no longer have the right to choose which obligee would receive his
                      performance (§1791 – obligor can choose)
       o Creates a type of implied mandate between the obligees - so that each one is presumed to represent the
            others and to act on behalf of the others
                 o No single solidary obligee can act to the detriment of the others; each one should be held
                      accountable for the damages that may result from the non-performance of his duty
                 o A solidary obligee acting alone may only remit his portion of the debt, the obligor remaining bound
                      to the other solidary obligees for the balance… a solidary obligee acting alone may not novate the
                      entire debt without the consent of his co-solidary obligees
                           o Novation being the extinguishment of an existing obligation by the substitution of an new
                               one, each solidary obligee might suffer a prejudice if such a novation in toto by one of them
                               were allowed
                           o Obligee can only novate his share but not the totality of the debt
       o In their internal and horizontal relationship, the solidary obligees cease to be solidary to become joint obligees
       o Each obligee is entitled to a virile share of the payment, and that share will be equal to the others unless either
            the parties have provided otherwise or the circumstances dictate differently
o   Passive solidarity: multiple obligors – personal bond between the obligee and each one of his solidary obligors
       o Burden: since liable for totality it doesn’t matter if others can perform
       o Obligee can sue all obligors in the same lawsuit – to avoid not receiving performance from one obligor
       o Two different levels of relationships between the parties involved must be analyzed; there is first of all a
            vertical relationship binding the multiple solidary obligors to the obligee and secondly, there is a horizontal
            relationship creating rights and duties among the solidary obligors themselves
       o Vertical effects and its consequences
                 o §1795 – as opposed to a simple surety or a joint obligor a solidary obligor may not plead the benefit
                      of division – solidary obligors waive the right to demand that the obligee-creditor should divide his
                      action so as to obtain from each obligor only his virile share of the debt; h/e he has the benefit of a
                      dilatory exception
                 o The legal regime of one obligor may arise from a source other than the sources of the solidarity of
                      his co-obligors – a different legal regime may be created for each bond of solidarity
                 o If the obligee doesn’t receive full performance from one obligor he has the right to demand full
                      performance or the balance from any other solidary-obligor because only the whole performance will
                      release from liability
                 o Solidarity is not indivisibility, i.e. should one obligor in solido die before the performance of the
                      obligations, his heirs together, and not each one individually, will jointly owe the performance of the
                      obligation formerly owed by the deceased
                 o §§1799, 1800 should a solidary obligor be put in default the other solidary obligors themselves will
                      thereby be put in default (this assumes identical legal regimes and a lack of strictly personal defenses)
                 o A variety of defenses can exist depending on the legal regime
                           o Common defenses, mixed, partly common, and partly personal, principal obligor/surety
                               relationship and strictly personal defenses – descriptions on page 65 of the précis
       o Horizontal effects and its consequences
                 o Once the obligee has received the full performance of the obligation from one of the solidary
                      obligors, the benefit of solidarity disappears with the extinction of the debt
                             o   Solidarity is not heritable – the nonheritability of the benefit of solidarity from the obligee by the
                                 solidary obligor who performed means that there will take place a distribution of the debt among the
                                 former solidary obligors who have now become joint obligors
                              o The solidary obligor who extinguished the debt is entitled to a right of contribution against his co-
                                 debtors but he must divide his action so that he can demand from each one of them no more than
                                 their share or virile portion
                              o There may exist some exceptions to an equal distribution:
                                      o By agreement or stipulation
                                      o By judgment of a court
                                      o Under §1800 an obligor in solido who is at fault in not performance his obligation will be the
                                           only one ultimately liable for the damages he may have caused to the obligee
                              o Right of contribution: each obligor should bear his full share of the debt but no more; the solidary
                                 obligor who extinguished the obligation is entitled to a personal action to enforce his right of
                                 contribution against his co-solidary obligors which should include interest (§3014); this is justified by
                                 the concept of legal subrogation §1826-A
                              o The risk of insolvency is to be spread proportionately among the obligors; by their personal
                                 contractual relationship, the obligee-creditor and the solidary obligor in whose favor solidarity has
                                 been renounced may not increase the burden or the virile share of the remaining obligors §1806
            o    Consider the parties as being fictitiously one and the same person on account of the personal link that has been
                 established between them; each is presumed to represent the other
            o    Example of solidarity: §2324 – Liability as solidary or joint and divisible obligation

Art. 1791. Extinction of obligation by performance
                Before a solidary obligee brings action for performance, the obligor may extinguish the obligation by rendering
        performance to any of the solidary obligees.

Art. 1792. Remission by one obligee
              Remission of debt by one solidary obligee releases the obligor but only for the portion of that obligee.

Art. 1793. Interruption of prescription
                Any act that interrupts prescription for one of the solidary obligees benefits all the others.

Art. 1794. Solidary obligation for obligors
                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.

Art. 1795. Solidary obligor may not request division; action against one obligor after action against another
                 An obligee, at his choice, may demand the whole performance from any of his solidary obligors. A solidary
        obligor may not request division of the debt.
                 Unless the obligation is extinguished, an obligee may institute action against any of his solidary obligors even
        after institution of action against another solidary obligor.

Art. 1796. Solidarity not presumed
                 Solidarity of obligation shall not be presumed. A solidary obligation arises from a clear expression of the parties'
        intent or from the law.
            o The far-reaching, harsh and aleatory effects of solidarity are the reason why the solidarity of obligations shall not be
Art. 1797. Solidary obligation arising from different sources
                An obligation may be solidary though it derives from a different source for each obligor.
            o i.e. one party can be bound solidarily on account of a contract whereas the another solidary obligor could be bound
                for the same obligation because of an existing legal disposition

Art. 1798. Obligation subject to condition or term
               An obligation may be solidary though for one of the obligors it is subject to a condition or term.

Art. 1799. Interruption of prescription
                The interruption of prescription against one solidary obligor is effective against all solidary obligors and their

Art. 1800. Solidary liability for damages
                 A failure to perform a solidary obligation through the fault of one obligor renders all the obligors solidarily liable
        for the resulting damages. In that case, the obligors not at fault have their remedy against the obligor at fault.

Art. 1801. Defenses that solidary obligor may raise
                A solidary obligor may raise against the obligee defenses that arise from the nature of the obligation, or that are
        personal to him, or that are common to all the solidary obligors. He may not raise a defense that is personal to another
        solidary obligor.

Art. 1802. Renunciation of solidarity
                Renunciation of solidarity by the obligee in favor of one or more of his obligors must be express. An obligee who
        receives a partial performance from an obligor separately preserves the solidary obligation against all his obligors after
        deduction of that partial performance.

Art. 1803. Remission of debt to or transaction or compromise with one obligor
                Remission of debt by the obligee in favor of one obligor, or a transaction or compromise between the obligee and
        one obligor, benefits the other solidary obligors in the amount of the portion of that obligor.
                Surrender to one solidary obligor of the instrument evidencing the obligation gives rise to a presumption that the
        remission of debt was intended for the benefit of all the solidary obligors.
                    o For a discussion on this topic – P 68-69 in the précis

Art. 1804. Liability of solidary obligors between themselves
                 Among solidary obligors, each is liable for his virile portion. If the obligation arises from a contract or quasi-
        contract, virile portions are equal in the absence of agreement or judgment to the contrary. If the obligation arises from
        an offense or quasi-offense, a virile portion is proportionate to the fault of each obligor.
                 A solidary obligor who has rendered the whole performance, though subrogated to the right of the obligee, may
        claim from the other obligors no more than the virile portion of each.
                 If the circumstances giving rise to the solidary obligation concern only one of the obligors, that obligor is liable
        for the whole to the other obligors who are then considered only as his sureties.

Art. 1805. Enforcement of contribution
                A party sued on an obligation that would be solidary if it exists may seek to enforce contribution against any
        solidary co-obligor by making him a third party defendant according to the rules of procedure, whether or not that third
        party has been initially sued, and whether the party seeking to enforce contribution admits or denies liability on the
        obligation alleged by plaintiff.
Art. 1806. Insolvency of a solidary obligor
                 A loss arising from the insolvency of a solidary obligor must be borne by the other solidary obligors in proportion
        to their portion.
                 Any obligor in whose favor solidarity has been renounced must nevertheless contribute to make up for the loss.

                                                         Divisible and Indivisible Obligations

Art. 1815. Divisible and indivisible obligation
                 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.
                       Obligor can perform each item of the performance separate from the other
                               o Effects of Divisible Obligations:
                                        § 1816 – MUST be considered indivisible
                                        §1817 assuming that the item of performance is divisible by nature!!!
                                                 Heirs of the owner of the horse, each one will have to deliver the whole horse, heirs
                                                     will owe the mortgage indivisibly
                       Indivisible obligation
                               o By nature:
                                        Seller of horse agrees to sell to one buyer – the horse by nature is indivisible in its delivery –
                                           the whole horse must be delivered
                                        Parties by their intent can transform a divisible obligation into an indivisible one; money
                                           loaned is divisible, but loaner says money must be paid in a lump sum with interest
                                        How about the right of ownership over the horse? It can be divided, co owners – owners in
                                           in-division; all of the co-owners are required to perform indivisibly the full delivery
                                        Buy 100 bushels out of 1000…won’t become owner until they are removed from the entire
                                           quantity – if they are destroyed prior to passing to new owner the original owner bears the
                                           risk of loss… selling something that is not divided yet and you don’t bear the risk of loss
                                        I sell you 1/3 of the totality of the bushels of wheat – sold a right/abstraction, you become
                                           owner as soon as we enter into the sale you become owner and you bear the risk of loss and
                                           not the seller… sold something divisible so you bear the risk
                                By intent:
                                        K for the performance of services: to determine the nature of the performance; Levasseur
                                           had an ob to teach three times a week , cant make it indivisible because you cant teach it all
                                           at once
                                        Building a house, contractor is given 9 months – if nothing is said in the K what is the
                                           nature of the obligation? Can the parties by intent make the performance indivisible and
                                           what are the legal consequences (obligations of means and results – helps distinguish…)
                                           What does the owner have in mind? The whole house? Four walls? Frame? Slab? Owner
                                           probably has in mind an obligation of result – which is indivisible!!! How about the builder –
                                           ob of means – his performing of services when the sun shines when subcontractors are
                                           available, very likely that he will view it as divisible; likely that a court will side with the
                                           owner because they contracted for a house and not a slab
                                                 Prevailing intent of the owner
                               o By Law:
                                        Best example is the mortgage – the security given over the whole house, mortgagee has a
                                           mortgage over the whole house; the second mortgagee also has a mortgage over the whole
                                           house, but only after the first- if there is anything left, they do not divide
                                         Servitude: you have servitude over every inch of the path not portions of it
                         Effects of Indivisibility: §1819 and 2nd paragraph of §1815
                              o No benefit of division when the object of performance is indivisible
                              o §1789: where as solidarity focuses on parties, Focus on item of performance
                                         Solidarity is not heritable
                                         But indivisibility can be inherited when the item of performance is indivisible… combine
                                            solidarity with indivisibility – you plan ahead and guarantee heritability
                         Passive Indivisibility: each joint obligor (because we’re talking about persons) owes the whole thing, if one is
                          sued to perform he must perform the whole thing there is no benefit of division, the only right available is to
                          ask for a dilatory exception (the same one a solidary obligor can bring in

Art. 1816. Effect of divisible obligation between single obligor and obligee
                 When there is only one obligor and only one obligee, a divisible obligation must be performed as if it were
                     o Fictitiously indivisible
                     o If there are multiple obligors the presumption no longer applies and they are presumed to be bound jointly
                     o But this presumption also can be defeated if the thing is indivisible

Art. 1817. Effects of divisible obligation among successors
                A divisible obligation must be divided among successors of the obligor or of the obligee.
                Each successor of the obligor is liable only for his share of a divisible obligation.
                Each successor of the obligee is entitled only to his share of a divisible obligation.

Art. 1818. Effects of indivisible obligations between more than one obligor or obligee
                An indivisible obligation with more than one obligor or obligee is subject to the rules governing solidary
                     o Effects of indivisibility
                             o Each joint obligor owes the whole thing
                             o The obligee can demand performance from any of the obligors
                             o If the obligee interrupts prescription with one of the obligors it is interrupted for all the obligors
                             o Indivisibility is a benefit vested in the obligee (presumption)
                             o Default – solidary obligors fall under the rule that putting in default of one is putting in default of
                                 all… but can it be said that the joint obligors that they represent each other? Arguments can be said
                                 both way – but since we apply the rules of solidarity (a pari materia) putting one in default puts the
                                 others in default (but you can reason contrario sensu and say that what is said about solidarity doesn’t
                                 apply to indivisibility)

Art. 1819. Effect of indivisible obligation among successors
                 An indivisible obligation may not be divided among the successors of the obligor or of the obligee, who are thus
        subject to the rules governing solidary obligors or solidary obligees.
                     o Indivisibility is heritable, because the thing is indivisible in its performance any heir of an obligor will also be
                         bound indivisibly for that performance

Art. 1820. Solidarity is not indivisibility
                A stipulation of solidarity does not make an obligation indivisible.
            o Issue related to the thing, the object of the ob, the performance that an obligor must deliver, do or not do
            o Solidarity has benefits that indivisibility has and vice versa
                    o Solidarity is not presumed, it has to be expressed unless the law so states
                    o But indivisibility can be imposed, i.e. indivisibility by the law of nature
             o   Conclusions:
                    o Indivisibility of performance ceases to exist when the object of performance indivisible by nature ceases to
                              The obligee will lose the benefit of indivisibility, now they are presumed to be bound jointly (joint
                                 obligors… Indivisibility doesn’t carry over to the thing substituted
                    o Unless we apply to indivisibility the same rules we have for solidarity – if one solidary obligor causes the
                        destruction of thing by his own fault, damages will be owed and the obligee can demand them from any of
                        the solidary obligors (and they can seek redress among themselves) a pari materia can be applied to
                    o Solidarity doesn’t prevent the division of a debt between the heirs of an obligor; it is not heritable, so the
                        heirs are joint obligors
                    o Obligee should always provide in a contract even when there is only one obligor they should always provide
                        for solidarity and indivisibility

                §1566 – POTESTATIVE!!! If the condition is potestative…§1767 is there anywhere in this article the word
                 potestative? No!!!

                                                    Conventional Obligations or Contracts

Art. 1906. Definition of contract
               A contract is an agreement by two or more parties whereby obligations are created, modified, or extinguished.
            Definitions confine; so this is strange
            It is an exchange of will and consent between at least two or more parties; as a result obligations can be created….


Art. 1907. Unilateral contracts
                A contract is unilateral when the party who accepts the obligation of the other does not assume a reciprocal
             Common law: mode of formation, expression of will on behalf of one party
                    o Party carries out a physical action – that action carries out acceptance
             Civil law: unilateral juridical acts; unilateral contracts as well… creating an obligation on one side
                    o Contract is a juridical act – that contract (expression of two wills) creates an obligation on one side only; the
                        party on the other side does not assume a reciprocal obligation
                         Loan and donation
                         One party promises to pay the other a sum or money if the other will do or forebear to do something….
             Unilateral: One way street – A owes an obligation to B and B accepts performance of that obligation from A
                    o Donation – donee agrees to accept and owe nothing
                    o Different than the common law definition of a unilateral contract… content of the contract
                    o Physical performance of an act which will bind the party that expresses consent – the other parties… refers to
                        formation of the contract
                    o §2926 Deposit – purely potestative resolutory condition – why is it unilateral? That depositing is the
                        formation of the K before that there is no contract – the physical depositing is the contract there is no obligation
                        ?(before the deposit you may have a promise)
                    o Loan – there is no loan until the bank puts the money into your account – before that there are just
                        promises… obligation of the lender? Nothing just to wait for the borrower to return the money
Art. 1908. Bilateral or synallagmatic contracts
                A contract is bilateral, or synallagmatic, when the parties obligate themselves reciprocally, so that the obligation
        of each party is correlative to the obligation of the other.
                (Correlative - so related that each implies or complements the other)
               What did they agree to? Create an obligation or create two obligations?
               Bilateral: two way street – A sells to B a car/thing and B pays the price; A is the obligor of the obligation to deliver the
                car and B is the obligor of the obligation to deliver the price - isolate the obligation in regards to the direction they
                     o Obligations created on both sides
                     o K of lease and sale
                     o Difference in the number of obligations created
                     o Can a unilateral K by the intent of the parties be transformed into a bilateral contract – yes! A donation with
                         §1559 (3); 1565… you can attach to a unilateral k such conditions/duties so as to change the nature of the
                         unilateral contract
                     o Renumerative donations?
               Why is there a distinction between them?
                     o Exceptio non adimpleti contractus… §1911 comment (c) … exception of non performance of the contract –
                         only possible in bilateral contracts where the obligations are reciprocal/correlative
                               If one party isn’t willing to perform the other party can raise the exception
                               i.e. lease: if lesfsor doesn’t repair the premises then the lessee can withhold payment of the rent
                               exception isn’t available in a unilateral contract – donee doesn’t owe anything to the donor so there is
                                  no justification for the remedy;
                     o default – unilateral, there is no reason to put a party in default

        ***These classifications aren’t exclusive!!!! Guidelines to start reasoning!!!! The will of the parties can borrow
        from many places – to make up the parties own contract

Art. 1909. Onerous contracts
               A contract is onerous when each of the parties obtains an advantage in exchange for his obligation.
            Sale: buyer owes price and seller owes thing of value, price comes out of the buyers patrimony and the thing comes
               out of the sellers patrimony
            Onerous means that there is a burden
            Gratuitous legal effects:
            Gratuitous and onerous can be very different
                   o K of marriage? Onerous or gratuitous? Marriage itself and not the regime is likely a gratuitous contract
                             Can you argue error as to the person whom the groom married? i.e. as a vice of consent
                             Courts don’t like error as to the k of marriage (as to the person) – too easy to argue
                   o K of donation? In the mind of the donor is the status/consideration of the donee (a donor doesn’t just give
                        away to just anyone) but a particular “person”
                             Error as to the person in a gratuitous contract is more common than in an onerous (in an onerous
                                 contract is very difficult)
            In consideration of the other person – intuitu(s) personae
                   o Contract of mandate: bilateral, onerous in most instances; mandate: is based on the consideration of the two
                        persons who enter into the contract – the principal – mandatary – can be rescinded on the ground of error,
                        when the mandatary dies the obligation is terminated, the obligation is strictly personal because of
                        consideration of the person
            In a gratuitous contract no obligation of the warranty type; in an onerous contract warranty is often necessary to
               ensure the performance of the obligation of each party
                   o Donee has no right of warranty in the donor – no grounds to complain

Art. 1910. Gratuitous contracts
                A contract is gratuitous when one party obligates himself towards another for the benefit of the latter, without
        obtaining any advantage in return.
             Relationship between Unilateral and gratuitous; Donation and the will are examples
             Loan can be gratuitous or onerous; it is unilateral because only the borrower has the obligation to return
                    o Loan with interest – is onerous
                    o Loan without interest – to return the very thing received – the borrower isn’t digging out of his pocket – only
                        obligation to return that very same thing – it is a gratuitous unilateral contract
             Onerous and synallagmatic are usually aligned

Tandem is broken here!

Art. 1911. Commutative contracts
                 A contract is commutative when the performance of the obligation of each party is correlative to the performance
        of the other.
              Hasn’t been relied on by a court since 1985
                      o What is commutative in all civil law jurisdictions, in contrast with aleatory contract
                      o §1768 in 1825 code: is considered as equivalent, the object/thing given for a price – (Sale - the price is the
                          equivalent to the market price; lessee expects premises he can enjoy reflective of the amount he pays) bilateral
                          - each party considered that what he gave away to what he received
              Each party knows at the outset that he will receive the equivalent – it is in the nature of the contract to give each party
                 the equivalent of what he wants
              Each performance depends on the other (correlative – depending one upon the other)
                      o Correlative? Webster: related, correspondent, indicating a reciprocal or complementary relationship; Blacks:
                          relating or corresponding, mutual or …. Interdependent
              The performance occurs when the other performance occurs - performance depends on a performance… this is
                 what a bilateral contract is all about
              What does this add to bilateral contracts (onerous)? enter into obligations which in their mind they consider
                 equivalent (you don’t enter into a sale looking to lose money)
              This article really brings into the discussion of a term
              i.e. seller gives k 3 months to pay? Is it correlative? Wont a suspensive term prevent performance
              Commutative as defined in other Civil law jurisdictions
                      o Opposite of aleatory – each party expects the equivalent; the performance is equivalent
                                Equivalent performances abinitio; aleatory where risk is part of the contract which makes
                                   performance abintio not equivalent
Art. 1912. Aleatory contracts
                 A contract is aleatory when, because of its nature or according to the parties' intent, the performance of either
        party's obligation, or the extent of the performance, depends on an uncertain event.
              Performance of one obligation depends on an uncertain event
              i.e. gambling in a casino- you put money in the machine hoping you get the same or more than what you put in – the
                 greater thing depends on luck – suspensive condition – the event may or may not happen – will make the object of
                 the casino’s performance exist
              party knows that he will not receive the equivalent – they want more

Art. 1913. Principal and accessory contracts
                A contract is accessory when it is made to provide security for the performance of an obligation. Suretyship,
        mortgage, pledge, and other types of security agreements are examples of such a contract.
                When the secured obligation arises from a contract, either between the same or other parties, that contract is the
        principal contract.
             K of sale where buyer takes a loan – for mortgage
                   o K of sale – principle contract
                   o Loan/mortgage – kind of security – mortgage is accessory
                Why is there a difference? *** watch out for the big lure!!! To try to catch you!!!!
                   o Take one step at a time!!!!
                   o Lure is obvious – must identify the principal contract first!!!
                   o NO accessory of contracts and no issue or mortgage, surety, or pledge unless there is a valid binding
                        principle contract first – before you talk about warranty make sure that you convince professor that there is a
                        sale because warranty will not exist if there is no sale to back it up
                   o An accessory contract can be invalid because of error by one party or incapacity to enter into this particular
                        type of suretyship
                   o The invalidity of the accessory contract doesn’t affect the validity of the principal contract

Art. 1914. Nominate and innominate contracts
              Nominate contracts are those given a special designation such as sale, lease, loan, or insurance.
              Innominate contracts are those with no special designation.
            Nominate: given a name
            Innominate: no special designation
            Difference important? Courts don’t like innominate contract, courts prefer to bring a contract under a label – rules are
              important, if the courts are faced with the lack of rules, the courts could impose on the parties a contract that they
              never intended to entered in to

Art. 1915. Rules applicable to all contracts
               All contracts, nominate and innominate, are subject to the rules of this title.
            You can enter into any contract you want to as long as you have consent capacity cause and object and as long as you
               don’t violate the rules of public order
            Freedom of contract lets parties enter into whatever contracts they want to

Art. 1916. Rules applicable to nominate contracts
                Nominate contracts are subject to the special rules of the respective titles when those rules modify, complement,
        or depart from the rules of this title.

Art. 1917. Rules applicable to all kinds of obligations
                The rules of this title are applicable also to obligations that arise from sources other than contract to the extent that
        those rules are compatible with the nature of those obligations.

           Contracts of adhesion: parties are supposed to be equal when they enter into contracts – freedom of contract; h/e
            there are many instances where the weaker parties aren’t in a position to negotiate, must adhere even if they don’t
            really like it;
                o in order to recreate parity between the parties – to put them back on the same level
                      Provisions prohibiting competition are read out of the contract by the courts
                      Will bring about the nullity of some provisions of a contact


Art. 1918. General statement of capacity
                All persons have capacity to contract, except unemancipated minors, interdicts, and persons deprived of reason at
        the time of contracting.
              Found under the law of person in the CC § 27: all natural persons have general legal capacity to have rights and duties
              §28 A natural person who has reached majority… a broader concept than contracts – juridical act – a contract is the
                expression of two juridical acts
              §26 – the unborn child shall be considered as a natural person… general legal capacity to have rights and duties, child
                born alive…
                So when does a natural person become entitled to rights and duties? §25 natural personality – live birth until death;
                 conception but born alive –suspensive condition attached to the live birth – retroactive effects – bestow personality
                 retroactively to the time of conception
                Personality v. capacity
                     o Person has rights and can enter into obligations
                     o Natural person may not be able to enjoy every right attached to one’s personality
                                Capacity of enjoyment
                                Incapacity of enjoyment: person deprived of right to enjoy, takes away from a person a right vested
                                   with personality
                                         §§941, 945 – every person has the right to inherit under the law; but some heirs will be
                                            denied the right to enjoy the inheritance if they kill…
                                         945 If struck with an incapacity of enjoyment – the right dies
                                         §2447 – any natural person enjoys the right to enter into a sale, even children; but officers of
                                            a court – cant purchase litigious rights, (right is litigious when it is being litigated between A
                                            and B) a right is a thing and as a thing it can be sold or transferred
                                         §1476 minor under 16 doesn’t have capacity to donate unless in favor of his spouse or
                                            children – minor is given a right that belongs to every person except under the age of 16
                                         Incapacity of enjoyment is restricted – it infringes upon one’s personality
                                                 o Presumption that all rights belong to a natural person
                           Reasons of incapacity of enjoyment: distrust of a lawyer because they should have known; distrust of a
                               minor or protection of a minor against himself… heir who attempts to kill the decedent – as punishment
                     o A natural person may not be able to exercise rights vested in him
                                incapacity of exercise
                                Personality is vested in a person and rights are attached but for some reason that person cannot
                                   exercise the rights
                                         §§27, 29 Minors have the rights but since they are under 18 the law presumes that they aren’t
                                            mentally capable – minor is represented by parents (parental authority - §216 – until
                                            maturity or emancipation) Parents will assist with exercise of the child’s rights; if one parent
                                            dies the remaining parent will most likely be appointed tutor, it also begins by dissolution of
                                         §219 incapacity to exercise may lead to someone else exercising the rights – the parents can
                                            delegate the rights to someone else – they can appoint tutors

Art. 1919. Right to plead rescission
                 A contract made by a person without legal capacity is relatively null and may be rescinded only at the request of
        that person or his legal representative.

Art. 1920. Right to require confirmation or rescission of the contract
                 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.
                  Art 1842 Confirmation is a declaration whereby a person cures the relative nullity of an ob (Lev prefers juridical
                     act here instead of ob). Emanates from the very person protected by the relative nullity.
                      EG: minor enters into K, K can be rescinded by the minor, or minor can refuse to perform when asked by
                          the other party. Minor when he becomes of age can confirm the K which until the day before was not
                          enforceable-- can say he was protected by relative nullity and now I can confirm I am of age and therefore the
                          K is now binding.
                  Art 1843 Ratification is a declaration whereby a person gives his consent to an ob incurred on his behalf by
                     another without authority. A juridical act which comes from a person who was to be the protector of the
                      EG: minor enters into a K at 17yo, the act is relatively null, father/mother or parent with tutorship can step
                          in and ratify the K bc the persons with parental authority will make the K valid by exercising the right to K
                         which was denied to the minor. EG: the pres of the US enters into an international agreement, pres signs the
                         treaty, has to be ratified by cong, a third person who comes in to give authenticity/validity to the treaty

Art. 1921. Rescission of contract for incapacity
               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.

Art. 1922. Fully emancipated minor
                A fully emancipated minor has full contractual capacity.

Art. 1923. Incapacity of unemancipated minor; exceptions
                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

Art. 1924. Mere representation of majority; reliance
                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

Art. 1925. Noninterdicted person deprived of reason; protection of innocent contracting party by onerous title
                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.
             Art 395-- full interdict lacks capacity to make a juridical act…

Art. 1926. Attack on noninterdicted decedent's contracts
                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.


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.
             Invitation is different from an offer! But what does it take for the invitation to turn into an offer that creates ob's?
                 look at consent under its 2 component parts: offer and acceptance-- the 2 together form the consent. There is no
                 consent unless there is acceptance that meets the terms of the offer. The offer combined with acceptance may lead to
                 the formation of consent
             What are the req's for the offer to be an offer leading to an acceptance leading to an agreement as a K?
                  1. The offer must be serious, must be enlightened, free, intended to look forward to entering into a binding
                      agreement. Serious as opposed to an offer made in jest. Would a reasonable man consider it serious?
                  2. The offer must be precise, specific, etc. Means that in the offer, the offeror must make it clear to the offeree
                      what obj of the ob is meant to be created, and there must be in the offer some clear understanding as to the
                     cause of the K to be entered into (why is the offeror making his offer), is the cause of the K to be lawful/legal.
                     That's why distinction btw nominate and innominate K's is very important. If the offer contains reference to a
                     particular thing/price/cause then it looks like the K that would be entered into would be a sale. Therefore the
                     offeree knows there is a thing offered, a price, and the relationship btw price and thing is meant to transfer
                     ownership to him the offeree. If a thing is offered with no price attached to it, cant make connection btw shoe's
                     price and transfer of ownership-- offer is not precise enough to lead to acceptance that would bind the parties.
                     Easy to relate an offer as precise when the offer is for a K governed by the CC, but if the offeror wants to enter
                     into an innominate K it will be harder to bind the other party to the K.
               Intent: to bind himself – to create an obligation on himself; animus obligandi (glue that ties together)– brings together
                the precision of the offer with its seriousness, as opposed with negotiations
               Offer may be express, tacit §1927, addressed to A particular person or to the public at large as long as it meets the
                requirements of specificity, precision and seriousness
               Same requirements for an acceptance than for an offer
               …Customary, at the place the offer is received (not the same as the medium at the place where the offer is given (?)
               Drafters of contract should be specific as to medium, means, manner of acceptance of the offer

Art. 1928. Irrevocable offer
                 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.
                       Binding nature of offer? How far do you go to decide the intent to bind truly binds the offeror – distinction
                          btw revocable and irrevocable offers
                       Dominant concept of the offer – revocable, a contrario the irrevocable offer
                       IO- beneficial to the offeror
                       1928,1929, 1932
                       Offeror sets a term – extinctive term which leaves to the offeree that amount of time to accept
                              o How specific must the offeror be with the time?
                              o How does an offer manifest his intent to give the offeree a reasonable time? How must it be different
                                  from a specification? Do you apply the second para of 1927? Problem the offeror will have to
                              o IO – can be made even though a time isn’t specified – manifested intent to give offeree a reasonable
                                  time to accept… look for manifested intent – in second paragraph of 1927

Art. 1929. Expiration of irrevocable offer for lack of acceptance
               An irrevocable offer expires if not accepted within the time prescribed in the preceding Article.

Art. 1930. Revocable offer
               An offer not irrevocable under Civil Code Article 1928 may be revoked before it is accepted.
                   §1930 – 1928, 1931
                   All depends on manifestation of intent by the offeror
                   1928, 29 make the IO a presumption and the RO by default
                   To remove doubt use an extinctive term

Art. 1931. Expiration of revocable offer
               A revocable offer expires if not accepted within a reasonable time.

Art. 1932. Expiration of offer by death or incapacity of either party
               An offer expires by the death or incapacity of the offeror or the offeree before it has been accepted.
                Even during the irrevocable period of time
                Before offer is accepted, there is no contract – one intent is lacking upon death

Art. 1933. Option contracts
                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.
                      Why is it located here, a contact formed already – option is a contract!
                      The option is a fiction, intangible thing, is the object of the offeror’s obligation – the offeror gives that option
                          to the obligee who accepts is as the object of the contract of option
                      Thing of value – can be transferred – can be the patrimony of the beneficiary of the option – so a K has been
                      The obligation created by the option K to lift the option – to exercise the option(effect of option contract)
                          may be strictly personal to the beneficiary of the option
                               o The grantor of the option can say this option is sold to you alone – strictly personal
                               o Should you die, it will die with you
             it is a contract which can stand as the principle and only existing contract – sell you the option to buy my Civil Code –
                by itself this is perfectly valid; §2620… is a contract – it can stand on its own or it can be attached as an accessory –
                lease with an option to buy – validity of the option is contingent on the validity of the lease – their existence depends
                on the validity of the principle contract
             the object – the right can be sold; the buyer may decide to exercise the option – he may or may not want to buy – it
                his up to the buyer of the option because he owns it

Art. 1934. Time when acceptance of an irrevocable offer is effective
               An acceptance of an irrevocable offer is effective when received by the offeror.
             Acceptance has the effect of creating the contract, when received by the offeror
             During the irrevocable period of time
             Offeree must agree to enter into the contract during that period of time
             That the offeror will receive the acceptance during the irrevocable period of time
             Receipt – creates meeting of the minds
             It is easy when time is specified…What about when the time isn’t specified? Problem offeree will encounter – no
               specific time but a reasonable time
                    o Reasonable period of time is tied to an irrevocable offer
                    o How does offeree make sure that its received in the reasonable period of time
                             This is why the contract is of benefit to the offeror

Art. 1935. Time when acceptance of a revocable offer is effective
                 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.

Art. 1936. Reasonableness of manner and medium of acceptance
                 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
             Sale of movables §2601 – 2617, in between there are extensive comments – most of the articles are taken from sales
                 convention – convention of the international sale of goods – taken from the UCC
             2602 – formation by conduct – could be action or inaction, issues of interpretation
Art. 1937. Time when revocation is effective
               A revocation of a revocable offer is effective when received by the offeree prior to acceptance.
             When is the contract formed when the offer is revocable? Revocation of the offer when received
             Acceptance of RO when transmitted –transmitted as opposed to received
             Transmitted = revocable – even though the offeror hasn’t received the contract yet
             Receipt = irrevocable; presumption that offeror makes an IO because he wants to remain in control
             If the offer is irrevocable the offeror cannot revoke it until the term is up
             IO – offeror has received through mail or fax… even though the offeror hasn’t taken knowledge of the
               communication (get a letter and put it in a drawer unopened – receipt presumes knowledge)
             What if takes the offeree three or four days to make up his mind
                   o Offer received on the 1st
                   o reasonable party may need two or three days
                   o mailed on the 4th – at this point the contract is formed
                   o what about days in between?
                   o Can the offeror revoke offer on the 1, 2, 3? Is offeror under the obligation to give offeree a reasonable time
                       in which to decide?
                   o No reference to right to revoke after a reasonable time
                   o Offeror giving the offeree the benefit of creating the offer –should he be given a reasonable time? Offeror
                       bound unilaterally for a reasonable period of time like he is with an IO
                   o IO offeror is bound for a period of time, even though he is the one who has the benefit, who has the timing
                       of the formation of the K - give offeree a reasonable period of time
                   o Offeree should be given a reasonable period of time – given the right to determine when the contract is
             Revocation of a revocable offer cannot be made without giving the offeree a reasonable period of time – determined
               by usage, custom, trade…
             What if offeree receives revocation before he gets the offer himself? There is no problem there

Art. 1938. Reception of revocation, rejection, or acceptance
                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.

Art. 1939. Acceptance by performance
                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.
                Action consisting of performing, instead of accepting orally or in writing does so by action
                      Problems will be created when the acceptance is made by action
                      Contemplated – completed when commenced
                      Suggests that the offer – unilateral juridical act – binding the offeror, and the offeree derives the
                           understanding that if he performs he will be bound (offer meets requirements)
                      Commencement of performance is acceptance! Not finished…. Look at §1941!
                      THE CONTRACT IS FORMED! So why impose a duty on the obligee to give notice of beginning of
                           performance… read with 1941

Art. 1940. Acceptance only by completed performance
                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.
                     Particular features and qualities – in this instance – when completed performance is acceptance – it suggests
                         there is no contract until performance is complete – not bound until complete
                     Application of this article will prove to be difficult
                     For beginning or completed performance?
                     Offeree who has to complete performance to manifest acceptance must give notice to the obligor – no notice
                         is required if the offeror should have known according to usage… should have known what?

Art. 1941. Notice of commencement of performance
                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.
                     “offeree must give prompt notice” that he has begun to act, and therefore accepted
                     How is this different than §1927?
                     Why are there separate articles
                     Last sentence… liability – should it had said: of his beginning of performance, or who knows that the offeror
                       does not know that he has begun performance…
                     Damages for what? For failure to give notice? But the offeror because of usage or custom… he should have
                       known that I was accepting by performance
                     What has the offeror suffered?
                     Offer usually imposes a term – in favor of the obligor/offeree

Art. 1942. Acceptance by silence
                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.
             Silence as a form of acceptance? May in special circ.
             Special circ in relation to silence, lack in 1927 second paragraph – where inaction can under the circ. – nothing about
             Equate silence with special circ…. Inaction? Just circumstances
                 Art 2721 A lease with a fixed term is reconducted, if, after the expiration of the term, and w/o notice to
                    vacate/terminate/or other opposition by the lessor or the lessee, the lessee remains in possession. Inaction causes
                    the lease to be automatically reconducted.
                 Silence is often a mode of consent in K's of sale, particularly when you are dealing with professionals. Art 2601
                    and 2602-- sales enter into with professionals, the K can be modified by silence by one party, can be terminated
                    by the silence of one party-- these are the special circumstances in which Art 1942 would apply. Most have the
                    special circumstances for silence to be a form of consent.

Art. 1943. Acceptance not in accordance with offer
               An acceptance not in accordance with the terms of the offer is deemed to be a counteroffer.
                    Covered in a large extent in sales
                    Remember A contract must meet essential requirements: Capacity, Consent, Object, Cause
                           o *all K must meet these requirements – not enough for offer to bind the offeror
                           o Must contain 4 and specific requirements of contract to be entered into
                                    i.e. sale: object of offer must also include price, and intent must be specific to convey
                                       ownership – so the offeree knows what he has to pay and to know the intent of the offeror,
                                           if the offeree says yes then when the acceptance meets the offer then the contract will be
               What must the offeree do to become the offeror?
               If the offeree says to the offeror I want to pay half the price? CO? very likely – bears an essential element – similar to
                what the offer is offering
               What about if the offeree says not only will I pay 1K but Ill give you 500 more

               Why is a suspensive condition affecting the essence of these requirements? Would it be the same If you had a
                resolutory condition?
                    o SC do to an obligation? Is the person binding himself – changes the intent of the offeror – suspends the
                        existence of an obligation – I wont pay, and if! He has not accepted,, has not bound himself to paying the
                        price – messed with the essence of the transfer of ownership
                    o RC – the ob exists under the threat of it being rescinded later on
                    o How about a suspensive term? Ill pay you in three months – the thing is there and the ownership can pass –
                              2601: the offeree may include in acceptance, but those additional terms may not make the offer
                                 different than what is was – unless the offeror makes any additional terms…. Then you have custom
                                 and practices coming in
                              When you make an offer – make sure you specify irrevocability – keep control of formation – project
                                 into the future the effects of the contract – reason backwards
                                       How can I draft the contract to get this this and this?
                                       Think ahead and draft backwards

Art. 1944. Offer of reward made to the public
                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.
            Promises made to the public at large always contain some restrictions-- if you want a pair of shoes, the price is there,
                so it's offer to enter into a sale. But what if you walk into store and the manager says sorry we're out of stock? Most
                offers made to the public have included implicitly some suspensive conditions. When a store advertises this item for
                sale, no raincheck, first come first serve, the store is imposing some conditions on your ability to express your
                acceptance and the store is often in control of those conditions

Art. 1945. Revocation of an offer of reward made to the public
                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.

Art. 1946. Performance by several persons
                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.

Art. 1947. Form contemplated by parties
                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.

               ***1928, 9…. Timely, received by offeror of IO, it must be dispatched in a reasonable time when the offer is
               Acceptance must match, must be identical to the offer
            i.e. §2601 – where does this article come from? The comments don’t say…. Second paragraph dealing with merchants

                                                                  Vices of Consent

Art. 1948. Vitiated consent
                Consent may be vitiated by error, fraud, or duress (violence).
                     These are the three basic vices

Art. 1949. Error vitiates consent
                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.
                      Why didn’t the law institute use mistake like the common law? Or change violence to duress
                      Defective, wrong appreciation, understanding of a material reality or psychological expression of the will
                      Error of fact: when the consent of one party fails to meet one of the essential requirements of the offer; offer
                         is expressed by the offeror (object, cause,) error bares one of these factual errors or the contract – most
                         common kind of error
                              o Object: nature of the contract – presented in the offer (offeror to enter into a lease, offeree may
                                  interpret as being a contract of sale – object in the broad sense, what kind of contract the parties are
                                  going to enter into
                                        In the narrow sense – the thing that is to be transferred, the performance – the object of an
                                           obligation (car in a sale)
                                        Can be on the substance of the object – a gold plated ring instead of a ring made of gold –
                                           the true substance of the making of the thing
                                        Can be on a substantial quality of a thing - §2524, deals with the substance of a contract,
                                           reasonably fit – a reasonable person would expect; 2nd paragraph seems to address the
                                           subjective error
                              o Subjective v Objective: is an issue of evidence, that party has the burden of proof – and that the
                                  other party knew of the motive; when objective – that the average reasonable man would see that
                                  error – shifts the burden of proof to usually the offeror
                              o Cause: reason or motive for entering into a contract (§1967 – reason why a party obligates himself);
                                  can be the objective cause – one party lease, the other sale – somewhat meaning the object as a
                                  whole; subjective error – reason as to why the party wants to enter into the contract
                                        i.e. buying a clock for the personal/subjective reason/motive because it belonged to
                                           Napoleon… error if I have communicated to the offeror – it has to be shared by the offeror,
                                           if the offeree wants to purchase a tract of land to turn it into a casino – offeree not buying
                                           just to build condos but to build a particular type of establishment
                                        subjective motive must be communicated to the offeror
                      §1949 comment – contract between two minds – error must be shared; unilateral and bilateral
                              o ***if there is a presumption – or presumed to know – the presumption makes the error bilateral***
                              o Unilateral mistake – common law – who ever makes a unilateral error has a right to rescind -
                                  **absolutely not – you cannot do this; ground of error as to one of these items must be shared by the
                                  two parties – the person makes the error and the other party has to be aware of it
                              o Bilateral error is presumed – contract of sale §§2520, 2521,2524,2529, 2545 (devised with the specific
                                  intent to hold the manufacturer liable – automatically aware of the error in their products – of the
                                  poor performance of services which he sells – he is presumed to know of the defects in his things,
                                  damages and attorneys fees)
                             o    Sanction of an error which has entered into the field of a contract – a contract is relatively null –
                                  party who made the error is protected and can seek the nullity of the contract – must be brought
                                  w/in the prescriptive period – time within the discovery of the error – the nullity will not always be
                                  granted- there are some equitable considerations
                             o Sanction of an error which has entered into the field of a contract – a contract is relatively null –
                                  party who made the error is protected and can seek the nullity of the contract – must be brought
                                  w/in the prescriptive period – time within the discovery of the error – the nullity will not always be
                                  granted- there are some equitable considerations, §1951 – read the concept of good faith, if the other
                                  party is willing to meet you the contract will impose the contract
                        Error of law: very few instances, difference between error of law and ignorance of the law §5 – you cannot
                         plead ignorance of the law but you can plead… of the effects of a contract – rare – except in the case of Wise
                         v. Prescott
                        Errors as to the effect (where it may be common) – is the compromise §3071 - §3082 – nevertheless the
                         Compromise cannot be rescinded as to error of law or lesion

Art. 1950. Error that concerns cause
                 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.
                      Error as to the person: who is the offeree
                      Can be a ground for nullity
                      In an onerous K error as to the person is irrelevant; enter into in the K not because of the identity of the
                          offeree but because they can pay and carry out the obligation
                              o BUT there are instances where the nature of the person can be relevant – contract of mandate,
                                   contract based on representation of one party by someone else §2989
                              o Whenever there is an idea of a party representing another – the agent/mandatary must meet the
                                   qualities that the principal wants them to have
                      Hiring of services – if can be provided only by a particular person than there can be error
                      Gratuitous contract – consideration of the person/qualities of the person in foremost in the mind of the
                          donor, who provides a benefit to an other – the other has to respond to those qualities
                      Error of law/cause – not always distinguishable from the object
                      Error of law – not very common - Error is drawing the wrong legal effects

Art. 1951. Other party willing to perform
                 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.

Art. 1952. Rescission; liability for damages
                 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.
                     o Threat against a party who may want to go against a contract
                     o Damages or compensation can be granted to the party to whom rescission is refused
                     o There is a difference between knowing the reason, knowing the cause, and knowing that “a buyer” is making
                          an error
                     o Subtle distinction between error and fraud – when there is a presumption of error
Art. 1953. Fraud may result from misrepresentation or from silence
               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.
                    o Fraud adds to error
                    o §1955 – there be an error and that the error be created by fraud – before you can argue fraud you must be
                        able to argue error – action brought under fraud give attorney’s fees, not under simple error
                    o What is fraud? Made up of two parts
                            o Misrepresentation/suppression of the truth – by maneuvers and schemes
                                      Suppression of the truth – remaining silent, when if the info was disclosed the contract
                                         would not have been formed
                                      Maneuvers must be intended on the part of the author of the fraud to obtain an advantage
                                         or to cause a detriment
                            o If one of these elements is missing there is no fraud
                            o The second element – causing an detriment to the offeree, is more significant
                            o Author of the fraud – where must the fraud come from?
                                      must be a party to a contract §§1954, 1956 – one on one basis – important difference with
                                      Fraud can also come from an agent §1956 – seller cannot call upon another person without
                                         penalty – grounds for nullity – cannot do indirectly what you cannot do directly
                                      Victim of fraud §1954 – must be a party to a contract which is subjected to maneuvers so as
                                         to cause a detriment

Art. 1954. Confidence between the parties
                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.
                     o How do you determine when behavior is fraudulent? There is a psychological element - §1954 first and
                         second paragraph
                             o Standard is of the reasonable man – if they could have discovered without difficulty that the schemes
                                   by the other party in the contract is fraudulent – then the average man will not be protected because
                                   he failed to act reasonably
                             o Dolus bonus – good fraud – salesman putting on show – don’t fall for it – it is an act
                             o Code is concerned with the bad fraud – dolus malus – the one that the average person cannot
                                        i.e. buying a used house – you are required to take a tour and discover reasonable errors, but
                                            not expected to walk in with a hammer looking for errors
                         o 2   nd paragraph of §1954 – concerned with the family relationship – relation of confidence lowers the duty

                             of looking into – fraud can be found more easily in a family relationship
                         o §1958 – damages and attorney’s fees – if error and two elements of fraud
                         o §2032 – 5 yr prescriptive period
                      Objective and subjective component parts
                      Must be proven by the plaintiff
                      Not easy to prove – not easy to prove intent to derive benefit
                      Easier to prove maneuvers schemes - but the subjective part has to be proven as well

Art. 1955. Error induced by fraud
               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.

Art. 1956. Fraud committed by a third person
               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.

Art. 1957. Proof
               Fraud need only be proved by a preponderance of the evidence and may be established by circumstantial

Art. 1958. Damages
              The party against whom rescission is granted because of fraud is liable for damages and attorney fees.

Art. 1959. Nature
               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.
                    AKA: violence
                    Comment (b) duress is a word of art or technical word – word of the English language to convey substantive
                        notion of violence – danger of translating words – w/o knowing the substance of the law behind it – at
                        common law you will not find the same situation as described in 1960 – CL will not use duress against
                        threatened injury – in CL one party against the other – 1960 would be undue influence in the CL –
                    What is violence? Duress?
                             o At the common law: when one party to the K exercises physical violence against the other party of
                                 the contract, the victim; because of equity – duress was later on extended to economic duress –
                                 threats of violence of the property on the weaker party to the contract ** but this is the extent of
                                 duress at the common law, mostly physical – narrow interpretation because K find its justification in
                                 torts – because of torts that some contracts were created, CL has no theory of K, typical writ system;
                                 no duress at CL if a CL attorney were to include §1960 – spouse, ascendant, descendant – this isn’t
                                 part of duress at common law – courts of equity stepped in and they created the concept of undue
                                 influence **we don’t have this connected to duress in our Civil Code…. §1959 Comment (b) **not
                                 equivalent of violence
                                       Who is the average La. lawyer that is going to use the common law meaning?
                    Not likely to be encountered – what you may encounter is something more like to economic duress – more
                        like a contract of adhesion, or abuse of rights
                    Unlikely to encounter physical violence
                    Elements? Subject/Object: person, property – pecuniary loss, patrimony affected by violence; reputation –
                        moral violence, i.e. blackmail of a person reputation
                    Duress must be present at the time the K is entered into – not the fear of past threats – the party is coerced
                    Standard of violence – it is a dual standard – beginning is the reasonable person, which is described in first
                        paragraph of 1959 – reasonable fear – this is the abstract standard, in abstracto standard – if you can
                        established that a reasonable man would buckle under this then you may find duress; more common is the
                        second paragraph – the in concreto standard – impact that duress has on the victim

Art. 1960. Duress directed against third persons
                 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.
                       No La. case dealing with this article – must look at Quebec cases
                       We can borrow by analogy
                       List of victims used to be much broader – when the concept of the family was broader – more relatives were
                       Collaterals are excluded – brothers and sisters
                       They would fall under the second paragraph – left up to the discretion of the court
                       What about a fiancé? Not listed – will it fall under the second – against other persons – no adjective before
                          persons, doesn’t say related or close persons
                       What about a pet? Is this violence/duress? Old article included reference to animals – they probably would
                          fall under first paragraph of §1959 under property

Art. 1961. Duress by third person
               Consent is vitiated even when duress has been exerted by a third person.
                    Lack of consent, not error
                    s/o who knows they are entering into a K w/o their free consent
                    lack of freedom from a party to a K and from a third person as well
                    Not the case at common law – duress by a non party is not duress at CL!!!

Art. 1962. Threat of exercising a right
               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.
                     Fear must be a result of an unjust threat
                     Some threats are lawful and not tantamount to duress
                     The second sentence – abuse of right and contract of adhesion – courts will reestablish balance
                     i.e. Threat of a creditor to sue his debtor would be a lawful debt; threat of cutting off funds from son in
                        college unless they sign a contract to come to law school – is this lawful?
                     i.e. man threatening woman with divorce? Unless she agrees to release him from responsibility – but you
                        cannot be released from a legal responsibility – threat of doing something lawful in appearance but unlawful
                        in fact

Art. 1963. Contract with party in good faith
                 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.
                      i.e. lost in the waters of the gulf near Cuba – so in case of emergency hopefully there is no connection
                          between the person you are asking for rescue and the unlawful party
                      Taking advantage of the situation is this duress?
                      In La. there is a good Samaritan law – so there would be criminal charges
                      Stepping in to help some one – may be management of the affairs of another
                      In the common law w/o good Samaritan law a rescue situation would call it maybe an unconscionable
                          contract – but they have no prior name for it – they would have to decide in court

Art. 1964. Damages
                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.
                     Damages and attorneys fees for fraud (lesser one) then a fortiori ratione you can recover it for duress as well
                     Second paragraph – contract would remain in existence –but the court can determine that if it could be
                         rescinded the court could award damages
                     Rescission first then damages
                     Prescriptive period – relative nullity – vice of consent – it is relative §2032 from the time violence stopped,
                         fraud was discovered or error is ascertained – until then the prescriptive period is suspended because the
                         person doesn’t know they have a right

Art. 1965. Lesion
               A contract may be annulled on grounds of lesion only in those cases provided by law.
                   Not a general concept like fraud or error
                   Encountered in few contractual relationships
                   One doesn’t know exactly where to put it so it was put with vices
                   Post French revolution – nobility was forced to get rid of property – so this was put in place – so if sold for
                       less than half the value – the buyer had to know, there was no way they could not know – they presumed that
                       the seller was under economic duress or acting under error
                   Economic violence/duress/pressure
                   Since it was inspired by error/violence it was put in this section but only in one article…
                   Send to K of sale/exchange/giving in payment/successions
                            o In sales it only applies to immovable property
                   Remedy available only in a few K when the discrepancy is such that it is sold for less than half or a fourth
                       than lesion will automatically apply
                   As soon as you establish that the value of the immovable sold was twice the value – it does not apply to
                       buyers only sellers!!!

Art. 1971. Freedom of parties
               Parties are free to contract for any object that is lawful, possible, and determined or determinable.
                Object: gives rise to most litigation
                Object – misnomer – a k has no object – a k creates obligations to do give or not do – those obligations have
                i.e. k of sale – creates ob on buyer and seller – they are both obligor and obligee; selling a car; 2 objects 2
                what the CC is actually saying… it is coming to a conclusion that can be reached by reasoning – object of the
                   offeror’s obligation – but what about the other party? Also bound by an obligation – but in general the object will
                   be that of the offeror
                but it could be just as valid as the offeree’s obligation
                features of the object contemplated by the parties to a K whether it is the thing on one side or the price on the
                        o object must be determined - §1973

Art. 1972. Possible or impossible object
                A contractual object is possible or impossible according to its own nature and not according to the parties' ability
        to perform.
                     The object must be possible
                     If it is possible than it can become the object of a K regardless of whether or not the obligor can deliver or
                        Condition impossible because the object is impossible – i.e. cannot sell an object that it is impossible of
                         existence, cannot enter into services that no human being can perform
                        But If I enter into a k to perform with the symphony – any musician. Can perform – but I am no musician.
                         But the K is valid because the object is possible – if I am unable to perform I am liable for damages they will
                         take place for my lack of ability or skill
                        Identified as to its kind – i.e. secretary of admin – some adj that helps determine the kind of job that helps
                         determine the applicants

Art. 1973. Object determined as to kind
               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.
                    Under the notion of determined – you can have many different practical instances of determination of the
                       object of a K – i.e. 50 cars on a lot – I will sell you a car for 10K – the object is not determined – determined
                       when some guidance is given on the thing to be determined eventually
                           o Identification of the object of the sale in a K of sale
                    Object can be merely determinable
                           o Process of determination that leads to the identification of the object
                           o Can be determined when a term occurs – to determine as to quantity

Art. 1974. Determination by third person
                 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.
                  The court may determine…somewhat borrowing from CL and international convention
                  Have the intent – but the parties fail – but it can determined that they wanted to contract
                  Where is the determination of the object as to the quality? CC doesn’t make an agreement on the quality of the
                          o Object and quantity have been determined so quality doesn’t matter
                          o §1860 – get something in between the best or the worst
                          o Quality is an accessory element – but not an essential requirement for a determination of the object!!!!

Art. 1975. Output or requirements
               The quantity of a contractual object may be determined by the output of one party or the requirements of the
               In such a case, output or requirements must be measured in good faith.

Art. 1976. Future things
                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.
             Future things: do not exist at the time the K is entered into
             If out of commerce it can not be an object of a contract …. Second paragraph
                o Person sells succession – person deprives them self of personality
                o It cannot be the object of a k
                o But future things can – the object of the obligation will not come until sometime in the future
                o The contract is formed but it will have no effect - like a suspensive condition, with retroactive effects
                     i.e. farmers selling their crops in advance – nothing is sold but the contract is there and it binds the parties to
                        that K – when the thing comes into existence than the K will have its effects
               future thing v. hope – what helps distinguish
                    o Is the price of a hope commensurate/related to the hope – equivalent value of the future thing?
                    o Look at discrepancy between the price paid – the lower the price the more likely it is a hope… the more likely
                         you are to have a commutative/price becoming equal more likely to be a future thing
                    o Insurability of the thing bought… is it normal to insure a hope? Unlikely you want to a take a chance – it is
                         likely to insure a future thing
                    o Warranty – goes with commutative K – if the seller gives one it could be a future thing – unlikely that Springs
                         Thunder would have a guaranteed the renewals
                    o Looks at the extent of the seller’s involvement – the personal involvement in bringing about the thing?
                         Springs thunder – not much, but i.e. a farmer a lot –higher for the obligor… likely
               Reasoning backwards from aleatory and commutative K
                     Must be distinguished from sale or transfer or delivery of hope!!
                     §§2450, 2451
                              o Hope: thing that exists now – incorporeal thing, fiction, and it can be transferred at the moment the
                                   parties enter into the agreement
                              o Aleatory contracts are the sale of hopes, like gambling
                              o Emptio rei sperante – sale of a future thing
                              o Emptio spei – sale of a hope

Art. 1977. Obligation or performance by a third person
                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.
                     CL doesn’t have a name for this kind of thing/contractual relationship
                     Comment (b) promesse de porte-fort: triangular relationship
                            o I go to see the rare book dealer and say that Trahan will buy the volumes… and you promised they
                                 will be purchased – he refuses you are liable for damages
                            o Useful device – when thinking about others – to help one another
                            o A K the object of which is an act to be done by another party
                            o Resembles a suretyship in that the promisor never becomes an accessory obligor – you are either the
                                 sole obligor or no obligor at all
                            o For as long as the third person does not bind himself, the promisor remains the sole obligor, and as
                                 soon as the third person binds himself the promisor is released

                                                      Third Party Beneficiary

Art. 1978. Stipulation for a third party
                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.
             Stipulation Pour Autrui
             Insurance contract, particularly life insurance - Insured; insurer; beneficiary
             Contract whereby the stipulator (insured) stipulates in contract that promisor (insurer) will pay 3rd party
             Benefit can be transferred by contract to 3rd party - third person benefits from a K made by others
                      o v. in a promesse de porte-fort – third person by expressing consent, substitutes himself for an intended party
                          to a K and therefore binds himself
             3   rd party has right to demand performance from promisor
               When is right vested in 3rd party beneficiary? As soon as stipulation is made part of contract b/w stipulator and
               As soon as stipulation is attached to contract, right is vested in 3rd person; 3rd person doesn’t have to be aware that
                he’s beneficiary
                 As long as 3rd party beneficiary is not aware of benefit in his or her favor, the insurer can change the beneficiary
               As long as principal obligation is binding, the stipulation can have effect
               Can have a stipulation for benefit of 3rd person for contract of sale b/w stipulator (seller) and buyer
                 Ex. Seller stipulates to buyer that buyer will pay price to 3rd person
                 Article 1982
               Effects of stipulation for benefit of another in relationship b/w promisor & the 3rd party (assuming that all goes well
                in relationship b/w parties to the principal contract)
                 Depends on whether or not stipulator has prior contract with 3rd party beneficiary or no contract at all
                 Stipulation for benefit of another can be a form of donation
                 Will likely have to decide if stipulation for another has to be expressly included in a contract
               Determination of identity of beneficiary - Identity of beneficiary need not be expressly stated – in insurance contract
                husband can simply say “spouse” instead of a name; Identity of beneficiary must be clear/determinable at time
                stipulation is to take effect
               Think of this as means of bringing a 3rd person into an existing contractual relationship; as devices meant to grant
                contractual rights to persons not original parties to contract
               As long as the benefit is granted, that benefit should be means of bringing 3rd person into contractual relationship
               **Compare to an assumption** as per Carroll outline** but if gratuitous not an assumption

Art. 1979. Revocation
                 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.
                  Acceptance of benefit by 3rd party makes the stipulation irrevocable unless there are reasons for revocation to be

Art. 1980. Revocation or refusal
               In case of revocation or refusal of the stipulation, the promisor shall render performance to the stipulator.

Art. 1981. Rights of beneficiary and stipulator
               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.

Art. 1982. Defenses of the promisor
                 The promisor may raise against the beneficiary such defenses based on the contract as he may have raised against
        the stipulator.


Art. 1966. No obligation without cause
               An obligation cannot exist without a lawful cause.
                Required necessary component part

Art. 1967. Cause defined; detrimental reliance
               Cause is the reason why a party obligates himself.
               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.
                What is the cause – the reason why?
                Classified into two categories
                        o Objective cause – described by Pothier and Domat, classical cause – objective reason why parties enter
                             into a contract of a certain kind… expectation of receiving something in exchange
                                   All K of sale have the same objective sale… same for lessee – lessor wants rent, lessee wants
                                      premises… what about donations? The objective cause is the same in all – the gratuitous intent
                                   Theory criticized as being useless – how do you nullify? Nothing illegal in wanting to donate, buy
                                      or lease – since every requirement (object, consent) must be a potential ground for nullity – but
                                      for illegal cause there is none
                        o So subjective cause came into being – the reason why parties came into the K
                                   Maybe you bought a car for a particular reason – like buying a car to show off
                                   The cause has to be communicated/shared with the other party in the K – as to the reason why
                                      they entered into the K
                                            Cause is shared by the parties
                                            Determinate in entering into the K between the two parties
                                   Dolus – fraud on the part of the seller – i.e. person wants to buy land to build a truck stop but
                                      seller knows that the land is zoned residential
            SECOND PARAGRAPH is a monstrosity!!!!
                    o Uses detriment… but there is also detrimental reliance!!! This is a Trojan horse!!! Common law concept and
                        jurisprudence of detrimental reliance find their way into the theory of cause… titles aren’t part of the law!
                        Have no force of law!!
            If you rely on s/o else’s promise then s/o may be liable to you for… not needed! §1759 is all we need (good faith) and
                    o Good faith – not materialistic concepts such as detrimental reliance
                    o Is DT part of our law? Not really L hasn’t seen it!

Art. 1968. Unlawful cause
              The cause of an obligation is unlawful when the enforcement of the obligation would produce a result
       prohibited by law or against public policy.

Art. 1969. Cause not expressed
              An obligation may be valid even though its cause is not expressed.
                  Cause need not be expressed – reasonable parties – the reason doesn’t have to be expressly made but the cause
                   has to exist
                   o Check – doesn’t have to state the cause – it is an object – the absence of statement of the cause will not make
                       the check invalid
                   o Donation

Art. 1970. Untrue expression of cause
               When the expression of a cause in a contractual obligation is untrue, the obligation is still effective if a
       valid cause can be shown.

                                                   Effects of Conventional Obligations

       General effects will apply to all obligations – §§1758/59 (these we have already encountered – apply to all
       obligations not just conventional obligations: but conventional, delictual and unjust enrichment

           1758: all obligees and obligors have the same rights
          (A)Specific performance: Can demand performance, to obtain something by performance
               o Refers to those that are not strictly personal
               o Damages in lieu of specific performance: Right to recover damages
          (B) can obtain discharge
               o Contest the obligees action when it has been extinguished or modified

   1759: Good Faith – GF shall govern the oblgor and the obligee in whatever pertains to the obligation

   To give
       Obligation imposed on an obligor to transfer a real right on a thing – that right on the thing can be U, F ,A – it
           can be ownership/dismemberment
       Impose on the obligor – two sub-obligations
               o Obligation to deliver: ob to place the thing (object of the ob to give) at the disposal of the other
                   party/obligee; who in turn is under the obligation to remove
                        §2475 – seller bound to deliver the thing sold – bound to transfer the real right over the thing
                        §2483 – cost of making delivery is borne by the seller; taking delivery is borne by the buyer
                        What is delivery?
                                 Actual delivery/ physical delivery: delivery of physical possession of the thing into the hands
                                   of the other party in the K
                                 Fictitious delivery: takes place by operation of the mind; power of the mind;
                                        o §2456 – transfer of ownership
                                        o §2457 – movable
                                        o Immovable – the operation of the mind is not as effective – you have to have a
                                             private writing or before a notary for ownership to be transferred to the buyer –
                                             writing is the mode of making delivery
                                        o Instead of immovable itself – but when the paper is transferred/recorded the
                                             ownership is transferred
                                 §2467: Delivery is related to the risk of loss – risk of loss… is it actual or fictitious? And
                                   who bears the risk
                                        o Risk of loss is on party who has actual/physical possession – dealer has
                                             insurance and in a better position to be protected in risk of loss
                                 American Creosote case – did the buyer have physical or fictitious delivery… was
                                   ownership transferred?
               o Obligation to keep the thing safe while it is in possession of the obligor until the obligee takes
                        §2489: in the condition - at the time of sale – until the buyer actually removes the thing
                        §2555: buyer who is late in removing, that buyer will have to pay for seller preserving until the
                           buyer removes it
                        §§2937/39/40/45 – deposit

   To do
       §§1986/88 – as opposed to the best means available and result
             o Means: obligations to do impose on the obligee the burden of proving that the obligor failed to carry out
             o Result – if performance does not take place as per result/ contracted for
       Extent of the ob to do will vary with the K of that ob to do – there is a difference between an ob to do on the
         mandatary, depositary, the nature of the K will determine the extent of the ob to do imposed on the obligor –
         there is a more burdensome ob to do on the part of the depositary – because of the trust that is justifying the K
         of deposit

   Not to do
       In most instances these obligations can be specifically enforced … §1987

What if there is failure to perform/breach?
                    Reciprocal performances – bilateral K exceptio non adiplenti contractus §§1993/1908
                    Whether SP is possible/ if not possible than damages
                         o Before demanding either – a party must be put in default §1990
                         o Leon v. Dupre – obligation to give, pay money/damages – failure to perform – why not enter into K and
                             create an alternative obligation to pay money if the obligor doesn’t perform?
                         o American Creosote

Art. 1983. Law for the parties; performance in good faith
               Contracts have the effect of law for the parties and may be dissolved only through the consent of the parties or on
        grounds provided by law. Contracts must be performed in good faith.
             Effect peculiar to contracts – it is the law between parties
             Related to 1985 – third parties – if the K is the law between parties (relative effect – in the relationship between the
               parties) the K between A and B cannot be detrimental to third persons – cannot impose obligations on parties not in
               the contract… exception – testament, because it’s a unilateral juridical act and not something between two parties)
             K between A and B – it is not to say that it will not effect other persons – but its not by intent in the K (sale between
               A and B, if A sells car to B then 3rd parties cannot buy it, they have not been affected by will – they have not imposed
               an obligation on C

Art. 1984. Rights and obligations will pass to successors
                 Rights and obligations arising from a contract are heritable and assignable unless the law, the terms of the contract
        or its nature preclude such effects.

Art. 1985. Effects for third parties
                Contracts may produce effects for third parties only when provided by law.
                 By their K two parties can produce effects on third parties as opposed to against third parties
                 Stipulation for the benefit of another
                 Promesse de porte-forte
                 You can be altruistic and give rights to third persons

        Specific Performance - Don’t like to compel people into performing
             K creating an ob to give – SP is possible under §1986…

Art. 1986. Right of the obligee
                 Upon an obligor's failure to perform an obligation to deliver a thing (to give), or not to do an act, or to execute an
        instrument, the court shall grant specific performance plus damages for delay (moratory damages) 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.
                  In bilateral contracts - implicit alternative right in the obligee – specific performance or damages
                         o Alternative right is compensatory damages
                  If the obligor has to do something it will be difficult to get specific performance – so try to get an agreement for
                     stipulated damages ahead of time
                         o Courts consider circumstances and decide
                  In this case we are talking about compensatory damages who suffers from nonperformance from obligor –
                     amount equivalent to performance
                  In K to do – requiring personal services – easy to understand why SP cannot be imposed
                         o Strictly personal and personal must be distinguished, the latter can be done by another obligor

Art. 1987. Right to restrain obligor
               The obligor may be restrained from doing anything in violation of an obligation not to do.
                        Can have SP – particularly by way of injunction

Art. 1988. Judgment may stand for act
                A failure to perform an obligation to execute an instrument gives the obligee the right to a judgment that shall
        stand for the act.
                      Connection between this and §1986
                      Ob to give can be enforced by judgment… many obligations can be preceded by obligations to do

Art. 1989. Damages for delay
              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.
               Putting in default is warning/notice to the obligor which triggers the obligation of the obligor to pay moratory
               Owe moratory damages for each day of delay
                  o Moratory – moratorium – delay
                  o **time has become of the essence – obligor has breached obligation to perform on time – and the breach
                      carries with it the payment of damages – for each day of delay**
               What are the forms of putting in default? §1991 – methods of putting in default
               It has nothing to do with performance of the principle obligation – if an obligee puts an obligor in default the
                  assumption is that the obligor is still capable of performing – moratory is like placing some pressure to perform
                  on the obligor
               Existence of term emphasizes the insistence of performance on time

Art. 1990. Obligor put in default by arrival of term
                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.

Art. 1991. Manners of putting in default
               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.
                Written
                Oral – but problem is one of evidence that is why you need witnesses
                Lawsuit
                But today the more efficient one is the creation of a term… the mere occurrence of a term puts a person in
                   default - §1990 – without doing anything the obligee puts the obligor in default
                Putting someone in default is not always necessary – it would be useless
                            o When the obligor delivers the wedding dress too late – default would be too late unless the wedding
                                is put off
                            o Unable to perform – the seller of a car – in the obligation to transfer ownership – A sells to C instead
                                of B
                            o §2016 i.e. of uselessness of putting in default – the facts will dictate whether putting in default is

Art. 1992. Risk devolves upon the obligor
                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.

Art. 1993. Reciprocal obligations
               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.
             Reciprocal obligations – bilateral/synallagmatic K
             Think about exceptio non adiplenti contractus
             Party is not required to perform if the other party doesn’t either
             §2487 – may refuse to deliver/retain… if the buyer is unable to pay price – can raise exceptio


Art. 1994. Obligor liable for failure to perform
               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.
            the granting of damages is the primary obligation in a tort action – compensatory damages
            no so in a K!!! the granting of damages is a secondary obligation – it is an obligation that comes in existence only if the
               primary obligation is not carried out/carried out in a defective manner
                    o Payment of damages – secondary obligation – existence depends on existence of primary ob – it has to be
                        legal and possible
                    o conditional on the primary ob not being performed
            damages are not to be considered as an alternative obligation – the obligor doesn’t have a choice between performing
               and paying obviously – unless you make damages an alternative ob in the K – you can give them a choice in the K –
               but in the absence damages aren’t an alternative performance
            If the principle obligation is invalid/illegal/immoral then there will never be payment of damages!
            If the primary ob is impossible of performance as a result of a fortuitous event, if no blame can be put on the obligor
               – no damages
            Cause: obligee must prove that the obligor’s failure to perform was the cause of the injury/damage
            Second paragraph: damages for non performance or defective performance… these lead to compensatory damages
            Damages for delay lead to moratory damages

Art. 1995. Measure of damages
              Damages are measured by the loss sustained by the obligee and the profit of which he has been deprived.
            For non perf or defective perf – compensatory damages
                   o Loss or damnum emergens – loss that has been created caused by defective performance
                   o Profit of which obligee has been deprived or lucum cessans
            Well how are you to measure them? §§1996, 1997 and §2003 on the other side

Art. 1996. Obligor in good faith
               An obligor in good faith is liable only for the damages that were foreseeable at the time the contract was made.
            What loss was foreseeable in the event an obligor fails to perform – very speculative – particularly if you leave it to the
               courts to decide – what profits/loss you should have foreseen – the more discretion you leave to the court the less
               likely you are to get compensated properly… makes stipulated damages very useful
            Pay whatever could have been contemplated at the time they entered into the K – no more or no less

Art. 1997. Obligor in bad faith
               An obligor in bad faith is liable for all the damages, foreseeable or not, that are a consequence of his failure to
             Evidence of bad faith, he intentionally failed to perform so as to cause a detriment; ill intended/motivated will be hit
               harder than the GF obligor
             ALL!!! The damages… all that is not in GF
             Problem: with all the damages – monetary, physical damages – equated with a certain amount of money, moral
               damages – much discretion left to the court in deciding what is direct or indirect damages
Art. 1998. Damages for nonpecuniary loss
                 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.
              Meador v. Toyota – make sure to look at comment
              Concept of moral damages raised problems – related to good faith
              Nature – importance of properly identifying a K and its components
              Moral satisfaction from obligation not the value of the components
              Circumstances surrounding non perf or creation of the K
              Second paragraph – close to §2315 – by intent want to cause a moral prejudice to the obligee
              Moral damage/sentimental prejudice….Embarrassment and humiliation
              Whether the K by its nature – knew or should have known
              Much discretion left to the courts in determining moral damages

Art. 1999. Assessment of damages left to the court
               When damages are insusceptible of precise measurement, much discretion shall be left to the court for the
        reasonable assessment of these damages.

Art. 2000. Damages for delay measured by interest; no need of proof; attorney fees
                 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.

Art. 2001. Interest on interest
                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.

Art. 2002. Reasonable efforts to mitigate 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.
             Can read together with §2003 to create an obligation to disclose
             Obligation to mitigate damages

Art. 2003. Obligee in bad faith
                 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
                 If the obligee's negligence contributes to the obligor's failure to perform, the damages are reduced in proportion to
        that negligence.
              GF required of all parties to an obligation
              Issue… standard part of law of K… obligation to disclose on the part of the parties to a K – to bring to each others
                 attention knowledge facts and circumstances that may change the K… ob to disclose is a component part of the
                 obligation to be in good faith
                What about the duty to be informed on the other party – to find out for himself?
                The obligee must also (kind of part of obligation to disclose) mitigate §2002
                If negligent and no bad faith – the damages are reduced
                Behavior and attitude will have an effect on damages
                GF/BF cuts across all parts of the CC

Art. 2004. Clause that excludes or limits liability
                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.
             ** intentional or gross fault §2003 second paragraph isn’t mentioned here… physical injury
             Cannot exonerate from liability for causing damages – requirement of the public order
             But how do you determine gross fault? The article is a bit narrow

                                                               Stipulated Damages

Art. 2005. Secondary obligation
               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.
             Damages determined by convention. Parties by contract could agree in advance as to what damages would be for
               failure to perform…Parties are allowed to stipulate damages and generally we will hold them to it…avoids
               litigation…helps the obligee because he doesn’t have to prove damages, only a failure to perform.
             Dealing here with secondary not an alternative obligation – the obligor doesn’t have the choice between performing
               and paying damages – the obligee still wants performance – but they have agreed that if obligor doesn’t he pays
             Courts can adjust damages – for non perf or defective §2011 court may reduce if the obligee has received a benefit….
               h/e §2012 the courts cannot abuse their discretion – must be manifestly unreasonable – what is the value of the
               principal performance - §2012 is to prevent penalty clauses – more powerful from imposing on the weaker

Art. 2006. Nullity of the principal obligation
                Nullity of the principal obligation renders the stipulated damages clause null.
                Nullity of the stipulated damages clause does not render the principal obligation null.

Art. 2007. Stipulated damages or performance
                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.

Art. 2008. Failure to perform justified
                  An obligor whose failure to perform the principal obligation is justified by a valid excuse is also relieved of
        liability for stipulated damages.

Art. 2009. Obligee not bound to prove damage
                 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.

Art. 2010. Obligor put in default
                   An obligee may not avail himself of a clause stipulating damages for delay unless the obligor has been put in

Art. 2011. Benefit from partial performance
                Stipulated damages for nonperformance may be reduced in proportion to the benefit derived by the obligee from
        any partial performance rendered by the obligor.

Art. 2012. Stipulated damages may not be modified
                Stipulated damages may not be modified by the court unless they are so manifestly unreasonable as to be contrary
        to public policy.

                                                     Revocatory Action and Oblique Action

        How can the CC prevent a K from having a detrimental effect on 3rd persons?
         A & B & C- Paul (Pauliana Action)
         Revocatory action – Pauliana Action – right avail to a third person – to try to undo what A & B have done to C
         Acts of conservation. There is an obligation between the parties though its performance may be deferred…and if the
           obligor performs some kind of “act” that increases his insolvency would allow the obligee to annul the act… The obligee
           has the right to do it even though performance is not due yet.

Art. 2036. Act of the obligor that causes or increases his insolvency
                An obligee has a right to annul an act of the obligor, or the result of a failure to act of the obligor, made or
        effected after the right of the obligee arose, that causes or increases the obligor's insolvency.
         Paul – A’s obligee for $200, A assets amount to $300, A enters into a K with B – question is how can this K cause a
            detriment to Paul… A is in need of liquidity and sells car to B for $150… Paul suffered loss as a result of A and B
            entering into a K… can Paul bring an action against a K – so that the car is returned to A which is worth $300 – so Paul
            can seize the car and get proceeds from the sale

Art. 2037. Insolvency
                An obligor is insolvent when the total of his liabilities exceeds the total of his fairly appraised assets.

Art. 2038. Onerous contract made by the obligor
                 An obligee may annul an onerous contract made by the obligor with a person who knew or should have known
        that the contract would cause or increase the obligor's insolvency. In that case, the person is entitled to recover what he
        gave in return only to the extent that it has inured to the benefit of the obligor's creditors.
                 An obligee may annul an onerous contract made by the obligor with a person who did not know that the contract
        would cause or increase the obligor's insolvency, but in that case that person is entitled to recover as much as he gave to
        the obligor. That lack of knowledge is presumed when that person has given at least four-fifths of the value of the thing
        obtained in return from the obligor.
         Conditions pertaining to juridical act between A & B
         Paragraph 1: Onerous – obligee (Paul) may annul a K made by obligee (B)…
         Nature of the K! Then look at the rights of the parties
         Onerous K where B knew or should have known – when he entered into K with A that he would cause or increase A’s
             insolvency… got car for less than what it was worth – then he should have known he caused the insolvency… as a result
             of which C can possibly have an action against A & B
                     o Onerous K caused increased insolvency = burden of proof is on C to prove the insolvency
                     o Conditions pertaining to the K… Between A & B and the Existence of C; A is indebted to C=Paul
                     o Presumption of knowledge is less than 4/5th the value
         Paragraph 2: presumption is set at 4/5th because it is hard to prove
         If this is met there is no creation or increase of insolvency – but this is a presumption – C can still bring the action to
             show cause or increase of insolvency
                     o Exception to the right of C/Paul §2040
   No need to est fraud/under prior articles this was an additional requirement on Paul – had to prove insolvency and fraud
   Impact of A’s action on creditor/Paul: Conditions Paul must meet
         o Paul must be a creditor on the grounds of a prior existing debt owed by A to Paul… prior to A entering into K by
         o Prescription bars Pauliana action later on; no longer a creditor
         o Existence of term? Impact of insolvency – term which prevented Paul from bringing action will fall, right of
             action becomes accessible right away, importance of creating a term – if insolvent the term no longer prevents
   What if Paul was a creditor of A under a suspensive condition – right of action is suspended on account of condition- A
    enters into K with B where B increases insolvency (term will fall)… is a creditor under a SC entitled to bring a revocatory
    action – is that creditor like a creditor under a term… the ob doesn’t exists and may never exist – but chance that it can
    and its retroactive and that C was a creditor way back
             o What is the nature of the action?
             o §1771 – lawful measures to preserve right; Lawyer for C/Paul – action ought to be considered an action
                  meant to conserve/preserve the chance that in the future the condition will occur and Paul will be a creditor
                  retroactively ** pauliana action = conservatory action – to preserve the future existence of a right
             o §1771/1782 – under term but titles are irrelevant – reason by analogy where the reason is the same the law is
                  the same – combine these articles and grant pauliana action
   What about if B is the party Defendant to the revocatory action –Paul brings joint action, jointly against A & B… §2038
             o B knows or should have known that when he entered into K he was causing/increasing A’s insolvency – K is
                  to be annulled
             o B will return the car to A - $300 back to A’s Patrimony – sufficient to pay Paul’s claim of $200 - $100 remain
                  in A’s patrimony – Paul’s action is extinguished…
             o But what of A’s relationship with B? Is B entitled to his $100 yes and there will be nothing left in A’s
             o What if debt owed to Paul… changing #’s C/Paul was entitled to $400 from the beginning, car was worth
                  $300 so A was short $100, he transfers car to B for $100 so A is now short $200 – Paul brings action – B to
                  return the car worth the $300 into A’s patrimony – But doesn’t get his $100 money back – Paul gets his
                  money and A & B get nothing (B knew or should have known)… but if there is anything left over B can
                  recover the balance… B is on the hook for whatever amount he transferred to A
                       B will not recover anything if whatever was transferred is needed to pay Paul
                       B returns what he has acquired from A – he will have to leave in A’s patrimony whatever he was
                           given until Paul is paid – if there is anything left over then B gets it
                       Once C/Paul has been paid… paid out of what is returned + whatever is needed from B to pay Paul
                       Excess in A’s patrimony must be retuned to B – action that Paul brings is an action personal to Paul
                           – revocatory action brought by creditor for his personal exclusive benefit – benefits only that creditor
                           that brings the action
             o If A had other creditors – if they don’t act in time – TOUGH §3182 – patrimony is pledge given by the
                  person to a creditor – when B has to return car and leave what he has paid A –as soon as Paul is paid – the
                  excess is returned to B and the other creditors will not benefit from this – opposite of the OBLIQUE
   Can the action be stopped – they can just pay out and the action will be moot
             o Nature of the juridical act – then look to see if the 4/5 trigger is met
             o discrepancy of 4/5th you automatically get presumption of knowledge of insolvency
             o Should the bank find out nature of the juridical act – if gratuitous there is no need look for presumption
             o If onerous there is a barrier of 4/5 makes the burden easier for the bank – can still bring even if 4/5 is met
             o What if it creates as strictly personal obligation? Whether the action will lead to interfering with strictly
                  personal rights
             o Bossier City Case
Art. 2039. Gratuitous contract made by the obligor
                An obligee may attack a gratuitous contract made by the obligor whether or not the other party knew that the
        contract would cause or increase the obligor's insolvency.
             Don’t care at all about amount of that gratuitous act
             Obligee (Paul)… obligor (A)… other party (B)….
             C can have a revocatory action to have the donation returned to the patrimony and then get what they are owed
             All G K between A and B can be challenged by Paul – in G K B is only receiving a donation and not incurring an
                obligation in return – they are easily returnable
             Not much jurisprudence on the situation

Art. 2040. Contract made in course of business
               An obligee/C may not annul a contract made by the obligor/A in the regular course of his business.
            Exception to C/Paul’s right

Art. 2041. Action must be brought within one year
                 The action of the obligee must be brought within one year from the time he learned or should have learned of the
        act, or the result of the failure to act, of the obligor that the obligee seeks to annul, but never after three years from the
        date of that act or result.
              1 yr prescriptive period – but if 3yrs P is stuck – preemptive period – considered sufficient time to give Paul to find A

Art. 2042. Obligee must join obligor and third persons
                In an action to annul either his obligor's act, or the result of his obligor's failure to act, the obligee must join the
        obligor and the third persons involved in that act or failure to act.
                A third person joined in the action may plead discussion of the obligor's assets.
                     Action is a joint action – against the two parties to the juridical act – A & B the obligee must be joined and
                         the third person also in the action
                     Doesn’t make A & B solidarily bound – automatically gives B the right of discussion – find out if there are
                         enough assets in A’s patrimony to pay Paul
                     Cost incurred – is by party who raises the defense of discussion

Art. 2043. Assets transferred must be returned
                 If an obligee establishes his right to annul his obligor's act, or the result of his obligor's failure to act, that act or
        result shall be annulled only to the extent that it affects the obligee's right.
                       Excess in A’s patrimony which may be owed to B… it is returned to B… see above

Art. 2044. Insolvency by failure to exercise right
                If an obligor causes or increases his insolvency by failing to exercise a right, the obligee may exercise it himself,
        unless the right is strictly personal to the obligor.
                For that purpose, the obligee must join in the suit his obligor and the third person against whom that right is
                o Oblique action – remedy for creditor who doesn’t receive his due
                o C/Oliver – A (Henican) son of deceased gave $ to grandchildren bypassing son – didn’t bring an action to get his
                     $ (Oblique – Oliver goes through A to get to B… instead of O going straight to B he must go through A first)
                          o Henican- Right to demand inheritance is strictly personal to the heir – cannot be transferred to a third
                               person and the action was denied
                          o Maybe different if it was a loan
                         o    Look at the nature of the right which the Obligee fails to exercise – if heritable, as all obs are presumed
                              to be heritable, then the obligee’s creditors can bring the oblique action
                         o §967: creditor of a successor… this is the oblique action; the second part of the article differs from the
                              outcome of the oblique action – when Oliver brings an oblique action he is exercising the right that A has
                              against B – therefore if Oliver is successful, whatever the lawsuit brings into A’s patrimony will become
                              the pledge of all the creditors of A – because Oliver has exercised A’s right of action
                o    When B returns to A and Paul is paid whatever is left over stays in A’s patrimony… Automatically becomes
                     (other) creditors pledge
                         o Detriment to a careful creditor who is watching over his own rights – when he brings the action he runs
                              the risk of getting nothing
                         o The creditors come and rank… oldest or one with a mortgage and if Oliver is too far down the line he
                              may get nothing… look at §967
                o    Prescriptive period? Same prescriptive period that A would have against in his right of action against B
                         o How long must Oliver wait to bring the action? If A wants to wait? Is the action strictly personal to A
                              (assume its not)?
                         o How about Oliver sends notice – and asks if they are going to bring the action


        Art. 2025. Definition; simulation and counterletter
                A contract is a simulation when, by mutual agreement, it does not express the true intent of the parties.
                If the true intent of the parties is expressed in a separate writing, that writing is a counterletter.
                      Lawful juridical act – not illegal to enter into a simulated juridical act
                      Conditions that must be met:
                               o Between the parties btw the juridical act – an apparent juridical act and in the background there is a
                                    counter letter ( purpose is to modify/reverse the purpose of the obvious juridical act – obvious one
                                    is a sale, counter letter seller agrees not to demand payment of a price, so the counter letter is a
                                    donation) no violation of a public order or defraud creditors this transaction is lawful
                               o When must the counter letter be entered into? Other time than when the juridical act is entered into
                                    (from comment)… But…Writers of doctrine – counter letter must be entered into at the same time
                                    of the obvious juridical act – manifest both intents - if subsequently to the obvious juridical act – if
                                    later on they enter into another juridical act then the second is a revision it is a new juridical act,
                                    modify repeal the prior one… but its not a counter letter
             Form of simulation? Can bear on the consent manifested of juridical act
             The counterletter can be a donation – its meant to manifest a different form of consent – instead of an onerous
                juridical act it will show that they want to enter into a gratuitous K
             It can bear on the object of the juridical act – in a K of sale they can agree to one price and in the counter letter they
                can say another
             Cause/purpose of counter letter – the purpose can be a donation to X, the counter letter can be that the donation
                goes to Y

Art. 2026. Absolute simulation
                A simulation is absolute when the parties intend that their contract shall produce no effects between them. That
        simulation, therefore, can have no effects between the parties.

Art. 2027. Relative simulation
                  A simulation is relative when the parties intend that their contract shall produce effects between them though
        different from those recited in their contract. A relative simulation produces between the parties the effects they intended
        if all requirements for those effects have been met.

Art. 2028. Effects as to third persons
                Any simulation, either absolute or relative, may have effects as to third persons.
                Counter letters can have no effects against third persons in good faith.
             Intimate K between two parties – cannot cause a detriment to a third person
             Third persons who do not know about the counter letter
             First sentence? Don’t they contradict each other?
             CL can have a benefit for third persons – other than one of the parties in the juridical act
             3rd persons can when they find the CL they can bring an action in simulation – which has no prescriptive period
                attached to it – action can only begin when the third party becomes aware
             Recognized in the law - 2480


Art. 1825. Definition
               Subrogation is the substitution of one person to the rights of another. It may be conventional or legal.
         Sub/rogare: to ask, demand, request, in the place of someone else
           o Person substituting for another to complete performance of an ob
           o Ob between A and B – onerous or gratuitous nature – may be performed by a third person for the benefit of a
           o §1855 – performance may be rendered by a third person –even against the will of the obligee – unless its strictly
               personal, then no third party can carry out the ob – in all other instances someone can step in, creditor has no
               reason to object
           o **familiar with real subrogation (res – when insurance pays insurance to homeowner after its destroyed, as a
               substitute for res, another res[money] is provided)
           o **now we are talking about personal subrogation (one person for another)
         Transferring an obligation from one party to another – common mode of involving a third person in an obligation
           existing between two other parties – solidarity is a common mode of binding parties/indivisibility bound like
           solidarity – and subrogation should come into play
         Legal fiction – an obligation is declared to survive in a person other than the original party and despite the
           performance of the original obligation
         *If he doesn’t give a good def come back to the précis*A subrogation assumes a performance made by a third party
           with the intent of seeking some form of reimbursement of his own from the obligor
         Amounts to a transfer of an obligation – but a mode of extinction of an obligation at the same time
         An accessory right brought into existence by the performance of an obligation
         *cant be disassociated from performance of obligations §§1854-1863

Art. 1826. Effects
                 A. When subrogation results from a person's performance of the obligation of another, that obligation subsists in
        favor of the person who performed it who may avail himself of the action and security of the original obligee against the
        obligor, but is extinguished for the original obligee.
                 B. An original obligee who has been paid only in part may exercise his right for the balance of the debt in
        preference to the new obligee. This right shall not be waived or altered if the original obligation arose from injuries
        sustained or loss occasioned by the original obligee as a result of the negligence or intentional conduct of the original
           New creditors may have two actions to recover their money –
            o sale between A and B – subrogated creditor will have an action against the buyer
            o But the subrogated may have own personal action in the event that the subrogated creditor was already a creditor
                of that same debtor - §§1855/56 – that there may be already an existing obligation with the common obligor
           Unless third person has a gratuitous intent – they have a right of action against the obligor
           The ultimate purpose of subrogation is to transfer from the creditor-accipiens (original obligee) to the subrogee-
            solvens (new obligee), the rights, actions and accessory rights (mortgages, sureties…) that the creditor held against his
            obligor – even defenses
           Strictly personal rights of the obligee-creditor cannot be transferred to the third person-solvens who would otherwise
            enjoy the benefit of subrogation
           Look at §1804 in reference to subrogation – for principal and solidary obligors
           Extent of the right of the subrogated creditor to recover from the debtor A – difference between conventional and
            legal – 1830
           The original obligee reserves a right of preference to the balance of the debt over the third person who has subrogated
            themselves, and are also owed a sum by the original obligor… ie: an obligee has against the principal obligor a
            right preferential to the right of a surety who paid only part of the debt he secured – the right to preference
            can be altered since its not of the public order… unless it arises from a situation mentioned in the second
            paragraph of this article
           Differs from novation in that novation extinguishes an obligation and therefore all securities cease, where as in
            subrogation the obligation and its accessories subsist for the benefit of the subrogee

Art. 1827. Conventional subrogation by the obligee
               An obligee who receives performance from a third person may subrogate that person to the rights of the obligee,
        even without the obligor's consent. That subrogation is subject to the rules governing the assignment of rights.
         Outcome from two different contracts where a third person is always involved
         Can result from a K between the obligee-accipiens and the third party-solvens – ex parte creditoris
         It must be an express agreement because there is no right (unless provided by law) to subrogation
         ***Levasseur doesn’t like the assignment of rights analogy or comments (d)&(f)
            o Under the law of sale §2642 – all rights may be assigned if not strictly personal – the assignee is subrogated to the
               rights of the assignor against the debtor
            o **distinction between assignment of rights and subrogation – Subrogation is not always equivalent to a sale – it is
               not in the mind of the third person or creditor to look upon it as a sale – third person may not even intend to bring
               an action against the debtor (may be gratuitous) – so there is no reason to associate them
                       - The 3rd person could have done that to extinguish his own debt toward the obligor.
                       - The 3rd person could also want to make a donation to the obligor. If give $100 to the obligee
                        and the 3rd person could say you owe me nothing, I just wanted to donate that money to you.
                       - The third person might have paid the obligee as a way to invest his own money, to enter into a
                        future relationship w/ the obligor. Maybe it was a loan to the obligor.
           Consent can be enough to vest subrogation in a third person – no particular form or even a writing is required – but
            the 3rd party must rebut presumption that the obligee didn’t intend to subrogate – so its better if it is in writing
            o Comment (f) agreement made at any time and need not be made in writing – prior decisions are overruled! How
                can a comment overrule cases!!! Non-sense!!! There can be no subrogation unless there is a performance – in the
                comment it seems to suggest that it can occur before performance… the text of this article itself says “an obligee
                who receives performance”… if you want to do it before performance you should do an assignment

Art. 1828. Conventional subrogation by the obligor
                An obligor who pays a debt with money or other fungible things borrowed for that purpose may subrogate the
        lender to the rights of the obligee, even without the obligee's consent.
                The agreement for subrogation must be made in writing expressing that the purpose of the loan is to pay the debt.
           Second mode of entering into a conventional subrogation – subrogation by the debtor
            o **not unusual but dangerous for the debtor
            o Borrowed** third person is a lender (loans money to the debtor [A] and with that money debtor must pay debt –
                loan is for its payment)
           Can result from a K between the obligor-debtor and the third person – ex parte debitoris
           **In a sense, the obligor himself removes a right or credit from his obligee’s patrimony to transfer it into the
            patrimony of a third person…. So
           A writing is required – although it need not be an authentic act – writing is of public order, to prevent lender and
            debtor from entering into a fictitious transaction meant to defraud creditors of that debtor
            o Three creditors – the purpose of the writing is to make sure that the debtor pays off the highest ranking creditor;
                danger is that the debtor can work out a scheme with a 4th person who is in no way is indebted to the debtor but
                who wants to help against creditors – nothing to prevent him from giving money to the debtor to keep the other
                creditors under control… so to prevent fraud there must be an agreement in writing to show that it is to pay off a
                legitimate debt
            o Way of disposing of someone else’s rights – debtor disposing of rights of the creditor and this is where there is an
                opportunity for fraud
           It must stipulate that the purpose of the loan being made by the third person was to pay off the obligor’s debt
           No need to be notified because performance will occur

Art. 1829. Subrogation by operation of law
               Subrogation takes place by operation of law:
               (1) In favor of an obligee who pays another obligee whose right is preferred to his because of a privilege, pledge,
                    mortgage, or security interest;
                     Second mortgagee may want to take the place of the first mortgagee – and take their place
               (2) In favor of a purchaser of movable or immovable property who uses the purchase money to pay creditors
                     holding any privilege, pledge, mortgage, or security interest on the property;
                     Make sure that debtor isn’t indebted to the gills – and that a creditor had rights on the thing
                     Particularly if it’s immovable
               (3) In favor of an obligor who pays a debt he owes with others or for others and who has recourse against those
                     others as a result of the payment;
                     With and for – with others – simple surety; for others… all for one and one for all
                     Solidary or indivisible obligor – they are subrogated into the rights of the obligor – automatically * except
                        when the
                         What is the right that the solidary obligor is not subrogated into * solidarity is not heritable – cannot
                            be transferred by K
                         Enjoys all the privileges but solidary obligor now subrogated cannot bring an action to recover from
                            others – once solidary obligor has paid the rest are joint
               (4) In favor of a successor who pays estate debts with his own funds; and
                                      On the part of heirs who thought they could easily recoup their own money
               (5) In the other cases provided by law.
                                      Where ever the law will decide but not aware of others
         *(5) was created as a catch all to eliminate confusion as to the list being either illustrative or exclusive
         Automatic

Art. 1830. Effects of legal subrogation
                When subrogation takes place by operation of law, the new obligee may recover from the obligor only to the
        extent of the performance rendered to the original obligee. The new obligee may not recover more by invoking
        conventional subrogation.
         Intended to protect persons who perform certain acts
         Only amount paid to original obligee
         Creditor pays 67% so the original is responsible for 33% and he can recover first
         In conventional its different – this is where there should be difference between an assignment of rights and
                             o In assignment – why treat them the same – they should have a different objective
                             o Not all third persons have the same motivation – in cases in subrogation – maybe the third person
                                wants to be helpful – the cause may not always be onerous/speculative
         **In conventional subrogation the third party can recover more than what he paid to the original creditor
         Cannot claim conventional subrogation to recover a balance
            Like an assignment of right where you can purchase at a discount 2642
            But the motivations may be different

        Distinguishing subrogation from assignment
             Sub – takes place for the benefit of the subrogee w/o any necessity of gaining the consent of the obligor – sub of
               creditors w/o consent of obligors – on the other hand an assignment 2643 requires knowledge on the part of the
               obligor (actual knowledge)
             Legal sub takes place only to the extent of the payment made by the subrogee to the creditor – assignment the
               buyer of the right – they have the right to recover the totality of the debt and not a portion, it may be similar to
               conventional (they have paid only a portion of the debt owed to the subrogated creditor)
             In a subrogation conventional or legal (C more – in this case C) the subrogee doesn’t benefit from a guarantee that
               the debt that he will be subrogated into will be guaranteed – if the debtor becomes insolvent and he cannot
               perform the subrogee is stuck with payment, he can attempt to recover but with no guarantee that he will be able
               to get $$ back; with an assignment the assignor/seller guarantees the existence of the debt (2646 - warrants its
               existence at time of agreement)
             Assignment is more beneficial to a person who wants to take over the right of action of the debtor

                                                       Assumption of Obligations

* Art. 1821. Assumption by agreement between obligor and third person
                An obligor and a third person may agree to an assumption by the latter of an obligation of the former. To be
        enforceable by the obligee against the third person, the agreement must be made in writing.
                The obligee's consent to the agreement does not effect a release of the obligor.
                The unreleased obligor remains solidarily bound with the third person.
             as a mode of transfer of obligations
             Known contractual device – worked out by business – formalized in 1985 – under this notion of assumption of ob
             Articles are new but not the law behind it
             An obligation can be the object of another ob - a thing that will itself become the object of another ob (object
                becomes of object ob [like in novation])
             Requires that three parties be involved in an assumption
         *Obligor and the third person (who becomes an assuming obligor)
                o Requirements it is a K – have to have consent, capacity, cause must be lawful – courts will focus on cause,
                    why did they enter into K of assumption [lawful, moral, ethical – intent of two parties] object of assumption is
                    the debt owed by obligor to obligee
                o Also require writing
                o   But obligee’s consent to the agreement does not effect a release of the obligor!!!! When the obligee consents
                    – the obligee still reserves his right of action against the original obligor – not cut of by the K of assumption
                o   Benefit for the obligee – accept explicitly or impliedly to the assumption
                o   This is the more common of the two assumptions because there is solidarity
                                       Subrogation is more common, even an assignment of right
           Effects:
                o Between the assuming obligor and the obligor – where cause comes in – why did the assuming obligor want
                     to take the place in owing a debt to the obligee – maybe the third person wanted to extinguish a debt he
                     himself owed to the obligor (to extinguish his own debt); cause may be a donation – step in shoes as a form of
                     donation to the original obligor (I’ll pay debt as a gift);
                      3rd para of 1821 – unreleased obligor remains/is(no way a single obligor can be solidarily bound)*
                          solidarily bound with the third person – obligee now has two obligors where he had one originally
                o Between obligors and obligee – the assuming ob who is solidarily bound is bound only for the amount of the
                     assumption – 1822 first para – if the cause of K of assumption was for the assuming obligor pay debt, he pays
                     2/3 – this is the extent of his ob – he will be solidarily bound for only 2/3, like legal subrogation… cant
                     recover more by resorting to conventional subrogation
                      This is tailor made – its really more like joint but its called solidary
                      Not like an assignment
                      Assumption is a way for the assuming obligor to pay off an existing debt between parties

Art. 1822. Third person bound for amount assumed
                A person who, by agreement with the obligor, assumes the obligation of the latter is bound only to the extent of
        his assumption.
                The assuming obligor may raise any defense based on the contract by which the assumption was made.

Art. 1823. Assumption by agreement between obligee and third person
                An obligee and a third person may agree on an assumption by the latter of an obligation owed by another to the
        former. That agreement must be made in writing. That agreement does not effect a release of the original obligor.
         Writing – obligation under the burden of proof - 1847- formal juridical act
         Not a release of the original obligor… release v. remission
         Basically a k between the assuming obligor and obligee – consent, capacity, cause – object is performance of the
            obligation originally owed
         Obligation taken on cant be strictly personal… no assumption, subrogation or other means
         Effects:
            o Assuming obligor and original obligor are not solidarily bound – assumption may take place w/o the knowledge
                of the original obligor… but they owe the same thing – what rule to apply – apply principle that they are joint and
                they happen to owe the same thing, kind of like several at CL
            o Relationship between obligors – if there was one cannot be opposed to that of the obligee… res inter alios, among

Art. 1824. Defenses
                A person who, by agreement with the obligee, has assumed another's obligation may not raise against the obligee
        any defense based on the relationship between the assuming obligor and the original obligor.
                The assuming obligor may raise any defense based on the relationship between the original obligor and obligee.
         He may not invoke compensation based on an obligation owed by the obligee to the original obligor.
         Flows from that fact that they aren’t solidarily bound
           Between obligors – will depend on whether or not there was a relationship between the obligors – if there was then
            the assumption is a way for the assuming obligor it is way for him to pay off the original debt – giving him two rights
            of action… the subrogated right of action from the obligee and what he has with the original obligor
           Right will depend on the extent of the amount of the assumption… assumption of obligations is not an assignment of
           This relationship isn’t common… third person will decide to pay the debt of another – anyone is allowed to pay this
            debt unless its strictly personal, and the obligee can subrogate… other devices to pay debts of third persons
           *assumption and assignment – assumption the obligee does not guarantee or warranty, but there is a warranty attached
            to the assignment because it’s a sale

                                                         Imputation of Payment

Art. 1864. Imputation by obligor
                An obligor who owes several debts to an obligee has the right to impute payment to the debt he intends to pay.
                The obligor's intent to pay a certain debt may be expressed at the time of payment or may be inferred from
        circumstances known to the obligee.
         Won’t encounter often – except in one case – Liquidation of Hibernia Bank – dealing with a term
         Imputation of payment – mode of performance of his obligations by an obligor who is indebted on several grounds the
            same obligee
         Several debts – obligor will impute a payment to one of those debts – but there are conditions attached to that mode of
            performance of an obligation
         You can have several loans from the same bank
            o Loans: Car, boat, rings – and you want to pay $ 1000 – you can decide which debt you want it to go to – but there
                are some limitations… i.e. §1865
            o Term to boat and ring so you can only pay the car

Art. 1865. Imputation to debt not yet due
                 An obligor may not, without the obligee's consent, impute payment to a debt not yet due.
         Debt due is first be paid
         What if you have a secured debt and other ones are due too- can the bank tell you we are sure about the secured debt
            but were not sure about the second one which isn’t secured… we want you to pay the second – who chooses?
              o The obligor – the one that is secured
         Interest – 8% and two with 4% - the obligor imputes which? Can the bank choose? Remember interest is in the favor
            of the bank, but the obligor is stuck with the higher payment….
         §1866… this is fine if there is only one debt with interest – because its in the interest to be paid more
         But what about the situation above who chooses? 1866 contemplates one debt – principle and interest… look at 1868
            – but this is when the parties have not made imputation (when intent hasn’t been made by the parties, so its made by
            law) but you can use in pari materia – so the obligor should be able to choose – not definite but likely – if you have
            the right to make the imputation… but if you fail…1867

Art. 1866. Payment imputed to interest
               An obligor of a debt that bears interest may not, without the obligee's consent, impute a payment to principal
        when interest is due.
               A payment made on principal and interest must be imputed first to interest.

Art. 1867. Imputation by obligee
                An obligor who has accepted a receipt that imputes payment to one of his debts may no longer demand imputation
        to another debt, unless the obligee has acted in bad faith.
           BF is not easy to prove
           Right of obligor to choose w/o infringing on the benefits – if the obligor fails to choose the obligation the obligee is
            supposed to choose in good faith – BF would be where the obligee imputes payment to one debt although
            circumstances clearly indicate the obligor’s intent to pay a different debt

Art. 1868. Imputation not made by the parties
                When the parties have made no imputation, payment must be imputed to the debt that is already due.
                If several debts are due, payment must be imputed to the debt that bears interest.
                If all, or none, of the debts that are due bear interest, payment must be imputed to the debt that is secured.
                If several unsecured debts bear interest, payment must be imputed to the debt that, because of the rate of interest,
        is most burdensome to the obligor.
                If several secured debts bear no interest, payment must be imputed to the debt that, because of the nature of the
        security, is most burdensome to the obligor.
                If the obligor had the same interest in paying all debts, payment must be imputed to the debt that became due first.
                If all debts are of the same nature and became due at the same time, payment must be proportionally imputed to
                      No fact situation around this article in the exam
                      But you can see the reason to the logic behind it
                      Last paragraph? Making something divisible that might be indivisible – MUST – because the law doesn’t
                          know which debt to extinguish in the favor of the obligor – dividing debt into partial payments

                                                       Impossibility of performance

Art. 1873. Obligor not liable when failure caused by fortuitous event
                 An obligor is not liable for his failure to perform when it is caused by a fortuitous event that makes performance
                 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.
         Arts are new – but attempts have always existed that make obs impossible in totality or in part – instances in the CC
            where the law modifies juridical act
                             o i.e. birth of a child – will require the re-writing of a will
                             o court can modify terms of a k
         parties enter into a K with the thing, circumstances will remain the same, unless the parties provide otherwise –
            parties want tomorrow what they are today… but when K require performance over time, who knows what may
            happen tomorrow
         How can perf be modified because of circ.?
         Can a K be rescinded because of circ occurring in the future – obs which demand immediate perf, or general ones
            which spread over a period of time – contracts which take longer than a day may fall because of impossibility of
         Look at 1875 first…
         Any JA can result in this – most likely bilateral K –

Art. 1874. Fortuitous event that would have destroyed object in hands of obligee
                 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.

Art. 1875. Fortuitous event
                A fortuitous event is one that, at the time the contract was made, could not have been reasonably foreseen.
         First requirement… this art should have come first – event beyond the control of the parties to bring about or prevent
         Force majure; irresistible force comment (c)… it has few names… act of god”
         Second: must lead to, must be the causation of the impossibility of performance
         Obligor is not liable… direct causation- look at 1873, in toto or partial under 1877
         Third: reasonably impossible to foresee, not absolutely impossible, but the reasonable man, average and reasonable
                              o Hurricane in MA v. LA – how foreseeable is it?
                              o Standard below what used to be the law – it used to be absolute
         Fourth: at time K was made – it is at that time that the vent must be unreasonably foreseeable
                              o Formation of K is important here… revocable v. irrevocable offers –when is a K formed mailbox
                                  theory, dispatch theory
                              o What if event occurs when the parties are waiting for acceptance – no K
                              o But as soon as the offeree the dispatches and the event strikes – the K has been formed
                              o What about when a condition is pending?
         Obligor is exempt from damages if he’s in GF – 1873
         After being put in default – like after a term
         1874 – like an escape clause – is not liable – not many cases but it could happen
         Requirements concerning the juridical act itself
            o Can a unilat JA effect? Between the time when the donor enters and time of delivery – probably not responsible
                twice because there is no reciprocal ob
            o Likely to apply to bilateral K
            o To give to do or not to do – spread over period of time (then it poss) – think ahead – and create alternatives
                               Alternatives – when one is made imposs by fortuitous event – should obligor be made to carry out
                                  the remaining existing, if the obligee had the choice he have the right
                               Of the obligor had the choice he may be exonerated
             advisable to foresee the unforeseeable/protect ahead if time rather than counting on a court (esp if the K spreads
                over time and if you are K with other countries, econ or political risks)– provide for revisions through time – esp
                if the stakes are high or money is involved – pegging the amount of money at a certain point/ or with gold as a

Art. 1876. Contract dissolved when performance becomes impossible
                 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.

Art. 1877. Fortuitous event that has made performance impossible in part
                When a fortuitous event has made a party's performance impossible in part, the court may reduce the other party's
        counter-performance proportionally, or, according to the circumstances, may declare the contract dissolved.
             Depend on the timing of the occurrence of the event –
             Before performance – if no ob has been carried out while waiting – they have not exchanged perf – the event will
                bring about the dissolution of the K - §1866 – when the entire performance - If they have engaged in some prelim
                perf - §1876 –dissolution
                    o If the parties had prepared themselves – then they have to return to each other what has been carried out
                         to prevent unjust enrichment
               While performance/after the perf has begun – the relationship becomes harder to settle
               §1877/78 – in part then relying on the court’s equity – part of the perf is beneficial to the obligee then it will be
                maintained – other part is not possible then you have part performance on both sides – if both parties are ok with
                continuing… but not for something like building a house
               1878 – to prevent unjust enrichment
               These two arts assume obligor is in good faith – not at fault in delaying – if he was at fault – likely that obligor in
                bad faith he will likely be liable for damages
               Applied to instances where imposs is not an issue but where a greater burden in perf is imposed on the obligor –
                carries burden that he agrees to bear to a certain point
                o More burdensome obligation but not impossible – if rendered harder more expensive because of a F event –
                    these articles don’t apply to a more burdensome perf – only for impossibility!!!! Not a greater burden being
                    imposed – if not impossible and more burdensome then it can be done – so provide for situations, CYA esp
                    when you are dealing with foreign parties

Art. 1879. Extinguishment of existing obligation
                 Novation is the extinguishment of an existing obligation by the substitution of a new one.
         Mode of extinction or transfer of obligations
         Apply to K and other JA other than K
         “Something new” occurring – innovation – an ob, new. Of a prior existing ob – new one becomes binding and the
            other one disappear
         Is novation a K? Novation is the effect, where an ob is extinguished – but comment (a) he says its preposterous –
            certain acts… what acts? Novation effected by an agreement… agreement? But other comments, talk about intent and
         NOVATION IS A K – but it can also take place by operation of law – law allows people to enter into a K of novation
         Conditions:
            o Parties must have the capacity to enter into a K of novation – capacity – may not be the same as the capacity to
                 enter into a K, this may require general capacity, but if novated it may require greater capacity…
                  parties want to novate a K of sale into donation… general capacity on part of an owner to sell something he
                     owns, to donate the capacity to donate there is more required in terms of capacity, more is required
            o Not modify – but extinguish and turn it into a new ob – of a different nature
            o What can you novate – an original/existing obligation – what is an existing ob – enforceable? Or can you novate
                 what is known as a natural obligation (exists but somewhere in the minds of the parties, because it can’t be
                 enforced/obligee can’t sue for performance)?
                  Probably cant novate a NO – because it then could become the cause of an onerous K – the arts didn’t say a
                     new K would be created – but that the ob became a K that then could be enforceable – not novation
                  Can you confirm an ob which is relatively null? Valid provided obligor knew of the defect of the extinguished
                     obligation… messed up comment… Confirmation - §1842: is a declaration… cures the relative nullity…
                     follow the law…
                  Absolutely null? §1883 the obligation does not exist – cant novate – contrary to public order
            o Forget about novation of RN – we have confirmation to deal with this
         Effects: Extinction of an existing ob – stresses the importance of distinguishing novation – different from assignment
            – new creditor , assumption-new obligor and subrogation – none of three forms of “extinguishing” are alike except for
            the intent
         Effects continued…Creation of a new ob – doesn’t really lead to much difficulty if two parties are involved/third
            persons – but mult parties in what could be a novation – the distinction between the others and novation becomes
            important - §1885
            o   From the creation of a new ob that all the accessory rights which ensured the performance of the original primary
                obligation are also extinguished as is suggested… but it can happen 1884

Art. 1880. Novation not presumed
               The intention to extinguish the original obligation must be clear and unequivocal. Novation may not be
            o Intent §1880 clear and unequivocal – animus novandi – explicit unequivocal intent to novate – may differentiate
               if from a subrogation or assumption
                Party in the new K who was also a party to the old K cannot benefit from the sureties – if assumption
                    or subrogation – the sureties will carry over – why its important to focus on the intent – consequences
                    may be drastic

Art. 1881. Objective novation
                  Novation takes place when, by agreement of the parties, a new performance is substituted for that previously
        owed, or a new cause is substituted for that of the original obligation. If any substantial part of the original performance
        is still owed, there is no novation.
                  Novation takes place also when the parties expressly declare their intention to novate an obligation.
                  Mere modification of an obligation, made without intention to extinguish it, does not effect a novation. The
        execution of a new writing, the issuance or renewal of a negotiable instrument, or the giving of new securities for the
        performance of an existing obligation are examples of such a modification.
             o objective novation – objective component parts of the K which is novated – you can novate the object
             o you can novate – by changing the cause into a new cause in the newly created K
                   change cause from sale to donation – shared by the parties… look back to cause
                   change in the term or condition… the suspensive condition – does it go to the substance, does it make it come
                     into existence… does a term make a K exist – what you change one with the other… impact of suspensive
                     condition – the obligation doesn’t exist
                   adding a suspensive condition novates the obligation – because it goes from pure and simple to something
                     else – one whose existence may or may not happen; same with resolutory condition – because it would
                     retroactively annihilate the existence of the obligation it affects… deleting or removing a condition would
                     have the same effect…. But the alteration of a term merely affects execution/performance and not its

Art. 1882. Subjective novation
                 Novation takes place when a new obligor is substituted for a prior obligor who is discharged by the obligee. In
        that case, the novation is accomplished even without the consent of the prior obligor, unless he had an interest in
        performing the obligation himself.
             o Subjective novation – changes parties – one party in general is novated into the shoes - substitution of a new
                 obligor – assumption and subrogation (has retroactivity) ranking remains the same… here for novation the old
                 obligor is released not for the others
             o Stipulation for the benefit of another – the original obligor is not released
             o Can you have subjective novation of an obligee – the comment is BS – since novation has no retroactive effect
                 and does away with securities … Assignment is different…. Subrogation of obligees is very different
             o Most common object of a novation – turn onerous JA into a gratuitous one?
             o N usually bears on the object
             o Cause is one of the reason why parities enter to novation
             o Can it take place by tacit acceptance/consent – there is debate – but since its other forms of extinguishing, don’t
                 rely on tacit novation – hold on to the formal expression of consent – its safer – because of the consequences that
                 attach to the novated ob – better to have formal, written, open novation
Art. 1883. No effect when obligation is invalid
                Novation has no effect when the obligation it purports to extinguish does not exist or is absolutely null.
                If the obligation is only relatively null, the novation is valid, provided the obligor of the new one knew of the
        defect of the extinguished obligation.

Art. 1884. Security for extinguished obligation
                Security given for the performance of the extinguished obligation may not be transferred to the new obligation
        without agreement of the parties who gave the security.

Art. 1885. Novation of solidary obligation
                A novation made by the obligee and one of the obligors of a solidary obligation releases the other solidary
                In that case, the security given for the performance of the extinguished obligation may be retained by the obligee
        only on property of that obligor with whom the novation has been made.
                If the obligee requires that the other co-obligors remain solidarily bound, there is no novation unless the co-
        obligors consent to the new obligation.
         P1 – if the obligee clearly expresses intent to novate and the obligor in solido does understand the object of the new K –
            novate the prior ob into a new one/if they know what they are doing – the other obligors will be released they will not be
            obligors to the novated K… so you have to be aware of the consequences of picking a specific obligor
         P2 – stresses the importance of ascertaining the importance of making sure the obligor knows what he is doing – the
            other obligors security will be gone
         P3 – if the obligee requires that the others remain – he must get their consent

Art. 1886. Delegation of performance – see page 151 in the précis
                A delegation of performance by an obligor to a third person is effective when that person binds himself to
                A delegation effects a novation only when the obligee expressly discharges the original obligor.
         Adds to the A,A,S & N
         E and O – but E is also bound to 3 – delegate paying my debt to the third person
         D is not novation – YET – at the time it is entered into – its purpose is to make it simpler for an E that is an O to pay a
            debt – the end result is that the third person has two O – the original one and the delegated one
         When entered into can be turned into a novation – P2: discharge of the original obligor, express intent – third person
            creditor of E will have to express his intent to consider the other person as a new obligor; not likely he will want a
            novation unless that he knows the delegated O can pay the debt – he would rather have two, so he wont let the other
            one go unless he’s sure the delegated O can pay
         Obligee decides to accept

Art. 1887. Discharge of any prior obligor does not affect security
                If the new obligor has assumed the obligation and acquired the thing given as security, the discharge of any prior
        obligor by the obligee does not affect the security or its rank.
         **wants to make sure he doesn’t lose securities which he has garnered in the other K

                                                       Remission of Debt/Not release

Art. 1888. Express or tacit remission
                A remission of debt by an obligee extinguishes the obligation. That remission may be express
        or tacit.
               Can have the same effect as a novation – so consent is important – there is some overlap
               i.e. K of sale O owes 10k, bilat, E decides to remit the debt to O – to extinguish the debt, now a donation
               this is very often the purpose of remission
               the cause: gratuitous intent
               can take place by K – most common form – it is a K and must have all requirements – particularly capacity –
                where you have bilat, onerous – transform into a donation – the capacity to donate may be different – not all
                relationships are lawful
               §1519 – donations made for unlawful/illegal purposes
               Cause must also be lawful/proper
               When does it take place?

Art. 1890. Remission effective when communication is received by the obligor
                A remission of debt is effective when the obligor receives the communication from the obligee. Acceptance of a
        remission is always presumed unless the obligor rejects the remission within a reasonable time.
         Subject to the rules of proof of obligations – receipt theory: as time when remission is effective is reasonable since it
           assumes that the obligor will accept the benefit of the remission of debt
         99% donation – benefit granted to O who’s debt is now forgiven
         O presumed to accept a benefit – always presumed – what is presumed? It is the acceptance by the O – the intent
         UNLESS: the obligor rejects… it is a K must have offer and acceptance, A is presumed unless the O says “I do not”
           not everyone wants gratuitous – A is presumed but it cant be forced on the O
         Novation – expect clear acceptance as well

Art. 1891. Release of real security
                 Release of a real security given for performance of the obligation does not give rise to a presumption of remission
        of debt.
         Tell sureties that you release them but not the O – very much a question of intent

Art. 1892. Remission granted to sureties
                 Remission of debt granted to the principal obligor releases the sureties.
                 Remission of debt granted to the sureties does not release the principal obligor.
                 Remission of debt granted to one surety releases the other sureties only to the extent of the contribution the other
        sureties might have recovered from the surety to whom the remission was granted.
                 If the obligee grants a remission of debt to a surety in return for an advantage, that advantage will be imputed to
        the debt, unless the surety and the obligee agree otherwise.
         P1 - Effects of remission – leases the sureties – why? Remission of the principle ob – bring about the extinction of the
            accessory ob
         P2 – E goes over the head of the O – doesn’t release the principle – doesn’t affect the PO
         P3 – joined to the second - applicable where sureties are solidary obligors – remission to one solidary O doesn’t
            affect the others – only to the share of the one that has been remitted


               Usually when you have multiple obligors
               i.e. O’s in solido – 3 of them – E may want to extinguish the debt period – remit the debt to one – that will remit
                the debt to others – they can act for the benefit of each other – if he receives the offer of remission he can do it – if
                he accepts clearly and expressly
       §1803 – somewhat misleading – where distinction comes in – release is the extinguishment of the debt – unless
        the E tells the SO I will remit to you and to you only – only that portion will be remitted – why its important to
        distinguish from remission – remission given to one only
       With remission – one SO is remitted and the others don’t have a detriment they are now bound to everything but
        the remitted persons share – a remission of debt of one O cannot increase the burden of the SO that are left the E
        steps into the shoes of the one who has been released – 3three parties owe $90 one O is released the other SO owe
        $60 if one cant pay the E is responsible for the $30 the bankrupt one cant pay since he cant increase the burden of
        the others
       **1E 3SO - can go against any of them for $90 – E may have been responsive by O1 (pay tuition please don’t
        ask me now for 90) he can release the obligor in solido from having to pay the totality of the debt – release for a
        period of time – the debt remains due – but E can separate one O from the other – can make one joint one
        temporarily – and go against another O for $60 – what of one of the remaining O cant pay his share, with release
        – the E can go back against the first O who had been made joint and get $15 – usually only called into question if
        s/o is insolvent… its like a suspensive condition…
       What if O1 is the principal O – are the secondary also released because the P has been released? PO is still in
        existence – so it doesn’t release the secondary obligors

1889 – remission by law
    Presumption of remission – benefit – obligee’s voluntary surrender – intended to remit the debt
    Voluntary surrender of title
    Rebuttable presumption, not the equiv of a tacit presumption of acceptance – that E and O have entered into a
        remission of debt – he can take back that presumption – few E’s are going to surrender titles until they have been

Voluntary: v and freely, of a NO and payment of an obligor who has benefitted from term but paid ahead of
   time… could you recover the performance of a NO made freely, but in error… §1761
    1761 Comment (b) – freely… only violence and fraud but not error
    1782 on term – comment (b) says voluntarily… error duress and fraud… how do you contrast freely and
       voluntarily….. so don’t rely on comments
    Does remission of debt leave a NO in existence? If it’s a gift then no


Compensation – mode of extinction of Ob – 1893-1902
   More important of the two forms – compensation under the law – as a right
   1893 P1 – there are some requirements – parties are mutually indebted to each other – on one basis of K of sale,
     and the other K for services… the debt must be liquidated – know what the amount of the debt is, each debt must
     be presently due for compensation to take place by operation of law… money, amount is known, is it due
   What if debt is subject to a term or condition
   Due has to do with timing of payment – this is usually the obstacle to it taking place by operation of law
   Delay of grace is not an obstacle
   Operation of law – auto at the moment the two debts of the same kind/liquidated – the debts are extinguished by
     operation of law
   Usually one party calls upon the other that it has taken place… there was a term or something like a condition
   §1898 - same theme
         o P3 drafters intended to protect the “insured” so it doesn’t operate – what if $ owed is payment of
             premium? Where the law makes no distinction we are to make none!
   Exception to compensation: §1894 – P2 because there is no debt owed there to borrower/thief – what a person
     needs to live with/on cannot be seized
   §1901 – can by K do what you want – compensate horses with apples, rolls Royce for a bike… if there is a term
     you can waive it… you can do what you want by K

Discussion: when obligor demands performance from a surety… before I pay, for principal - lets find out what assets are
    in the principal-obligors patrimony – if there is nothing or not enough the surety will pay
   Division:
   Release: extinction of obligations – not an institution in the CC – distinguished from remission… solidarity – if
    you release them telling obligor you are now joint – I just want your share and no more
   1903 – Confusion: for a civilian – mode of extinction of obligations when two conflicting qualities are united in
    the same person – debtor and creditor in a succession – Brits called it merger – doesn’t this change the meaning?

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