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Louisiana Obligations:

Chapter 1: Theory of Obligations

A. Obligation Definition
a. Obligation something that the law or morals legally command a person to do the placement of
sanctions if the person fails through specific performance
i. The 4 Requirements for a Contractual Obligation:
1. Capacity
2. Consent
3. Cause
4. Object
ii. Creditor or Obligee or Offeror or Promisor (Plaintiff) person who is entitled to
demand from the other a certain performance
iii. Debtor or Obligor or Offeree or Promisee (Defendant) person who is bound to render
a performance in favor of the Obligee (Plaintiff)
iv. State (Court) enforces the obligations makes the difference and enforces the Obligor /
Obligee relationship
v. Good Faith good faith shall govern the conduct in whatever pertains to the obligation
B. The 3 Elements of Obligation: Subjects, Legal Bond and Object
a. Obligation is comprised of 3 Elements: the subjects, the legal bond, object
i. Subject there is in every obligation . . .
1. Active Subject (Creditor or Obligee)
2. Passive Subject (Debtor or Obligor)
ii. Legal Bond the legal bond that Binds the subjects
iii. Object (NOT necessarily a thing) the true object is a Performance
C. The 4 Sources of Obligations (1757)
a. Contracts willful and lawful obligations
b. Quasi-Contracts willful and lawful legal acts that parties enter into despite the restrictions of a
will (whenever you rush into the hospital after an accident and the doctors work on you without
discussing the payment.but you are expected to pay later on, this is a Quasi-Contract)
c. Delicts unlawful and intentional (such as intentional torts)
d. Quasi-Delicts unlawful and NOT intentional (such as negligence torts)

Chapter 2: Capacity
A. Capacity
a. Capacity the ability to exercise certain contractual rights

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i. Minors (unless emancipated)
ii. Interdicts (sickness should be determined by courts)
1. Full Interdict deprived of all contractual capacity
2. Limited Interdict suffers this incapacity only with respect to a decision defined
by a court order mandating the interdiction
iii. Person Deprived of Reason a person who suffers from any one of a variety of
derangements (persons with troubles, affected intelligence, senility, and habitual
drunkenness)
1. Unlike an Interdict (defined officially by the court as a sick person), a Person
Deprived of Reason need NOT be officially declared by courts so before the suit
to rescind the contract at issue
2. Also, Interdicts are consistently unable to make reasoned decisions, but Persons
Deprived of Reason may be deprived of reason in a more temporary sense
B. Effects of Incapacity
a. A contract made by a person without legal capacity is Relatively Null
i. Relatively Null theres a problem with one of the partys consent, meaning they did
NOT consent or was NOT able to mentally consent
1. Relative Nullity contracts may be cancelled only at the request of that incapable
person or his legal representative
a. At that time, each party or his legal representative shall restore to the
other what he has received under the contract
ii. Absolutely Null an illegal contract if a contract is found to be absolutely null, it is
seen as never existing (unlike Relative Nullity)
b. A party who contracts with an incapable generally has 2 Avenues of Relief:
i. 1st - He can take comfort in the prescriptive period of 5 years (the rescission stops on the
date the incapacity ceases, meaning whenever the incapable finally becomes sober, the 5year prescriptive period begins at that moment)
ii. 2nd Immediately after discovering the incapacity of the other party, he can require that
either the incapables legal representative or the incapable (if the incapable has
voluntarily ceased) cancel the contract
1. For example, if a minor represents to the party with whom he is contract that he
has reached the age of majority, the contract may NOT be cancelled by the minor
if the other party reasonably relies on the minors representation of majority
2. Consequently, the law allows for rescission of burdensome contracts only upon
the showing that the other party knew or should have known of that persons
incapacity
a. If the deprived of reason is able to demonstrate that his incapacity was
obvious and generally known to persons with him at the time of
contracting, then the party seeking to uphold the contract must prove that
the incapacity of the person deprived of reason was concealed at the time
of contracting

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c. The ability to rescind a contract after the death of the incapable is very limitedthe contracts of
a person deprived of reason may only be rescinded after death if they evidenced a lack of
understanding, or are made within 30 days of his death, or when application for interdiction was
filed before his death
i. All unreasonable contracts may be rescinded on grounds of incapacity even after the
death of the incapable

Chapter 3: Consent
A. Meanings of Consent
a. Consent refers to the meeting of the minds with the intent of creating legal effects
i. The manner of the offer & acceptance does NOT matter UNLESS it is specified
in the offer
B. Expressed Consent - Consent Expressed By Words
a. Expressed Consent refers to consent conveyed by words, whether verbal or written
b. Such words must be clear since parties are bound by those words, meaning misunderstanding
or detrimental reliance is easily created based upon Unclear Expressed Consent
i. Thus, a positive promise made in a manner that shows lack of serious intent, such as an
offer or an acceptance made in jest---will NOT create an obligation
C. Implied Consent - Consent Expressed by Conduct
a. Implied Consent refers to consent conveyed by silence, inaction, or conduct when the
surrounding facts provide a clear implication of an acceptance
i. Thus, when the owner of a thing takes it or sends it to a depositary who does NOT refuse
it, a contact of deposit is formed through the implied consent of the parties
b. Implied Consent may or may NOT be established by law...when NOT established by law,
Implied Consent is left to the preference of the court
D. Consent and Inaction The Case of Silence
a. Consent may be conveyed by inaction or silence
i. Thus, if a lessor remains inactive and silent when, after termination of the lease, the
lessee remains in possession of the leasee thing then the lessors inaction and the
lessees occupancy give rise to a reduction of the contract
b. HOWEVER where the law does NOT provide a clear expression of consent based on a
partys silence, the surrounding circumstances must be very clear and obvious for consent
c. Types of Consent by Inaction or Silence:
i. Customary - Previous Dealings where consent becomes routine
ii. Exclusive benefit of the party who remained silent
iii. The silence of one shall be taken as the acceptance
iv. The absence of notice of termination before a certain date
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E. The Offer
a. Offer refers to a statement in which the offeror proposes to the offeree the conclusion of a
contract
i. An offer must be precise and complete to ensure mutual consent (including the
object being sold, the price of the object, and where the objects shall be delivered)
ii. If the offer lacks completeness, then it is NOT an offer it is an invitation to
negotiate
F. Collective Offers - Offers to the Public, Advertisements and Invitations to Negotiate
a. Collective Offer - an offer can be made to the public at large by means of advertisement
b. An offer made by advertisement is NOT a true offer but an Invitation to Make Offers
UNLESS the announcement clearly reflects a different intent
i. Such as for a prize being given away --- first come first served
G. Offer Without Words
a. In the absence of words, there is still an invitation to negotiate
i. For example When goods are sent by a merchants own initiativethe offeree may
either reject the offered goods, or take them, in which case he is accepting the offer and
binding himself for the price
ii. For example A taxicab waiting for fares at a taxi-stand, or the display of articles in a
store-window with an indication of price
H. Duration
a. Because offers are NOT meant to remain open forever The Duration of the offer is based on
the specific time period that is given by the offeror
i. If there is NO time period specified, then the duration of the offer must be accepted
within a reasonable time
I. Irrevocable Offer
a. In Louisiana law, an offer that specifies a period of time for acceptance is irrevocable during
that time
b. In addition, even when NO time for acceptance is named in the offer, the offeror is still
irrevocable for a reasonable period of time
i. Such as when the offeror states that the offer will be good until he hears from the
offeree OR- when he states that the offeree can take his time on the offer
ii. When NO time is specified, the reasonable time for acceptance intended by an offeror
depends on a number of circumstances (such as the distance that separates the parties and
the chosen means of communication) E-mail = shorter reasonable time to accept
1. Also, A gratuitous offer must be accepted a lot quicker than an onerous offer,
which is allowed a longer time period to be accepted due to its complexity
c. Louisiana courts grant full contractual recovery benefits when offers intended as irrevocable
are untimely revoked
d. An offeror can NOT revoke an irrevocable offer UNLESS the offer has NOT reached or
been communicated to the offeree
J. Revocable Offer

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a. Unlike Common Law, when an offer is revocable, the offeror still can NOT revoke in
violation of the overriding duty of good faith
i. Even though the offer is revocable, there is STILL a little or enough time allowed for
the offer to be irrevocable for the offeree to at least respond to the offer with some
type of immediate response
------------------------------------------------------------------------------------------------------------------A. Option Contracts
a. Option Contract refers to a contract where the offeror is bound by his offer for a specified
period of time and- whether he calls it an Option and that the offeree, may accept or reject
the offer within that time
i. NOT only must the offeror clearly form an option, but the offeree must also consent to it
1. If the offeree gives the offeror anything in return for the benefit of enjoying a
certain time (which may be returned once the offer is accepted or partially given
back) to make a decision, then it is out of the question that the offeree has given
his consent
2. If he does NOT give anything for the benefit, the offerees consent can be taken
oftentimes to be implied
b. Thus, the offeree of an option is in a better position than the offeree of an irrevocable offer . . .

B. Option vs. Irrevocable Offer The 5 Differences

Irrevocable Offer
Simply a proposition of an offer in writing

Option Contract
A contract where consent is based on whether
the offeror Calls it an Option in
writing

Gives rise to Legal Obligations (compensatory

damages to smooth over) if the offeror revokes
during his specified OR- reasonable time

Gives rise to Contractual Obligations (full

contractual recovery benefit) if the offeror
revokes during his specified time

Expires by the death of either offeror or offeree

Remains open for a specified OR- reasonable

period of time (if NO time was given)

Heritable Binds those assigned to the offer

or the hiers of the offeror and offeree upon his
death
I left it for my son = Option!!!
Remains open only the specified time assigned
by the offeror

Acceptance is effective once the offeror

Acceptance is effective based on what the

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receives it

option determines but usually once the

offeror receives it

C. Right to Accept, Rejection and Counteroffer Under an Option

a. A counteroffer implies a rejection of the original offer and puts an end to the right to accept it
b. If the offeree rejects the offer before the time that the option ends, then the offer will therefore
fully Reject (unlike in Contracts where the offer was still open, because they paid for that time)
i. HOWEVER the offeror must be COMPLETELY SURE that the offeree really
wants to reject this offer in order to avoid mess starting after the offer is rejected
and the offeree wants it back!!!
D. Right of First Refusal
a. Right of First Refusal refers to an offeror who obligates himself to give a particular offeree
the first choice to accept or refuse a transaction
i. For example When the promisee binds the promisor to offer to sell his property first to
the promisee, if the promisor ever decides to sell
ii. HOWEVER The offeree is NOT bound to buy if the offeror of the right decides to
ever sell
b. The offeror of the right does NOT promise to grant an option if he decides to make a certain
transaction The offer that may be even revocable
i. Thus, if the offer of first refusal involving movable property is NOT accepted before 10
days (and before 30 days for immovable property), then the offeror has the ability to
finally choose another person to offer the contract to
1. HOWEVER if the offeror does NOT find another person to offer the contract
to within 6 months, then the offeror must RE-OFFER the offer (right of first
refusal) to the original offeree Again!
c. An Right of First Refusal offer expires after 10 years (or is reduced to 10 years if the offer goes
over that) This is to ensure that the offeror of the right of first refusal is serious about selling
the property and NOT offering it to the offeree at an unfavorable time for the offeree and merely
to free himself of the burden
i.

Chapter 4: Consent (Contd)

A. Safe Harbor Provision (Cashio)
a. Safe Harbor Provision seeks to protect owners of parking lot from liability of stolen or
damaged vehicles
i. Lease of Space parking lot owner is NOT liable for vehicle
ii. Depository parking lot owner is liable for vehicle
iii. The 2 Requirements for a Lease of Space:
1. Sign displayed informing drivers of Unattended Lot
2. Driver retains his keys

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B. Manner and Medium / Communication
a. Manner and Medium - an offeree who wants to accept must do it in the manner prescribed in
the offer (if a manner is given)
i. It must be realized here that the offeror has control of his offer, and he may therefore
state that he will be bound only upon learning the acceptance, or that he will be bound as
soon as the offeree does performance
b. To be effective as an acceptance, a persons act must be have Communicability ... either with
an expressed acceptance (face-to-face, email, phone) OR- implied acceptance (performance)
i. When the offeror does NOT state any particular wish, the law presumes an acceptance
in certain instances (Acceptance by Silence)
C. (Our Mailbox Rule) Parties at a Distance and Time of Contract Formation
a. Transmission refers to when the offeree mails an acceptance letter the letter belongs to the
offeror from the moment of transmission (or dropped in mailbox)
b. Reception when the letter of acceptance physically reaches the offeror, a contract is made
i. Thus, with Reception if the letter of acceptance gets lost in the mail OR- the offer
expires before the letter is received, then there is NO contract (because the letter was
never physically received by the offeror)

D. Acceptance of a Revocable Offer vs. Acceptance of an Irrevocable Offer

Revocable Offer
Deposited Acceptance refers to the acceptance of a
revocable offer is effective only upon Transmission
(post office)

Irrevocable Offer
If the offer is irrevocable, the acceptance is effective
only upon Reception (when received by the offeror)

Because when an offer is revocable, the offeree is left

in a fragile position and the offer can be revoked any
time before the offeree accepts it, by making the
acceptance effective upon transmission, the law
affords protects the offeree in that position, reducing
the period of fragility

The reason for that rule is that, when the offer is

irrevocable, it is the offeror who finds himself at a
disadvantage because the offeree, who may
speculate on the advantage of accepting or NOT while
the offeror is bound for length of time

Thus, the risk of transmission is thus placed on the

offeror, because even if the letter is lost in the mail and
therefore never reaches the offeror there is still an
acceptance!
If the offeror has mailed a Revocation at the same
time the offeree transmit his acceptance, a contract is
STILL formed, since a revocation is NOT effective
until received by the offeree (BUT the transmission

Irrevocable offer - if the offeree mails an acceptance,

then re-mails a rejection, then the acceptance rules
BUT

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acceptance is enforced once it is transmitted or
mailed)
Thus, an offeror who receives first a rejection, and
later an acceptance (transmitted before the rejection
was received) = Contract Enforced!!!
Thus, the law recognizes as final the first message
that becomes effective
When the offer is revocable, the acceptance is
effective upon transmission, but the rejection is
effective only upon reception
In sum, a rejection received after the acceptance of a
revocable offer has been transmitted amounts to an
offer from the offeree to dissolve, then the offeror is of
course free to accept or reject (or Counteroffer)

If the offeree mails a rejection, then re-mails an

acceptance, then its going to be what he receives first
(due to good faith)
Thus, if the offeror receives an acceptance first,
followed by a rejection that arrives later) though
transmitted before the acceptance), that rejection still
does NOT stop the formation of the contact
In sum, whether the offer is revocable or irrevocable,
if the offerees attempt to overtake fails so that his
acceptance is received after reception of the
rejection, that ultimately acceptance must be regarded
as a counteroffer

E. Acceptance by Performance
a. Refers to when the offeror does NOT request any particular manner of acceptance, the offeree
may choose to go ahead and render the performance, without making a promissory acceptance
b. A reasonable performance by the offeree is an effective acceptance and the contract is formed
once the performance begins (meaning the offeror may NO longer revoke his offer)
i. When an offeror invites an offere to accept by performance, it is contemplated that the
performance will be completed if commenced because his acceptance is NOT
express, it must be shown that the intent to finish was implied in the act of starting
F. Acceptance Only by Completed Performance
a. Refers to when only a completed performance can be regarded as a acceptance of the offer
because there is NO value unless that contract is completed
i. Example - when compensation is offered to a scientist in return for finding a cure for a
certain illness
b. This applies when the offeror is doubtful of the offerees seriousness, or of his willingness to
render a full performance
i. Therefore, the offer allows the offeree either to fail, or to desist, once he starts to
perform, without making himself liable for damages (since there is NO contract)
ii. HOWEVER though the offeree is NOT bound to complete the performance, it is
clear that if he starts it, he does so in reliance on the offerors promise, meaning the
offeror can NOT revoke his offer once the offeree has started
1. The offer is revocable at least until the offeree begins to render the requested
performance but of course, once the offeree begins to perform the offer remains
irrevocable for the time necessary for that purpose
G. Notice of Commencement of Performance
a. Refers to when the parties are at a distance so that the offeror can NOT immediately learn
whether the performance has been started by the offeree, the offeree must give the offeror
prompt notice that he has started performing

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i. HOWEVER if the offeree fails to give notice of commencement of performance,
the offeror is still bound BUT the offeree would be liable for whatever damages
the offeror might have sustained because of lack of notice
b. Exceptions - Thus, notice would NOT be required where the offeror should know that
performance by the other party has begun, as, for example, when because of prior dealings the
practice between the parties is for the offeree to accept unless he expressly rejects, or when the
offeror has stated---or it is the practice between the parties---that he would call on the offeree to
find out whether performance has begun
----------------------------------------------------------------------------------------------------------------A. Counteroffer and Rejection
a. Counteroffer refers to a new offer involving the same matter BUT proposing terms
that are different from those contained in the original offer
i. An offeree who makes a counteroffer reveals an intention to continue negotiating if the
offeror accepts BUT if the offeror does NOT accept the counteroffer, then the
counteroffer becomes a Rejection
b. Rejection refers to the offerees intention NOT to accept the offer made to him and is effective
when received by the offeror
i. Thus, an offeree may NOT revive the offer in order to accept it, even if the offer is
irrevocable
B. Freedom of Form
a. Only exceptionally does the law prescribe that consent must be expressed in a certain form
Thus, the sale of immovable property must be made in written form, either by authentic act
or by a writing under private signature
i. ** Authentic Act refers to a written agreement between both parties in the
presence of a notary public and 2 witnesses AND- signed by all 5 parties
1. Parties do NOT have to sign at same time or location
ii. Writing Under Private Signature refers to one party who recognizes his signature as
his own before a notary public and 2 witnesses
b. Flood v. Thomas - The promise to pay a debt of a 3rd party must be made in writing
c. In the absence of legal requirement of form parties are free to express their consent in any
manner OR- choose to make their contract in a certain form even when none is required

Chapter 5: Cause
A. General Principles
a. Cause is the reason a party obligates himself which appears as the inducement, purpose, or
reason that prompted a party into an obligation
i. In addition, an obligation may be valid even though its cause is NOT expressed
b. Objective Cause buying in general without a reason
c. Subjective Cause - buying for a specific person or purpose with a reason
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B. Cause of the Obligation and Kind of Contracts
a. Gratuitous Contract OR- Donation refers to obligations where one party gives away a
benefit and NO benefit expected in return including charitable subscriptions
b. Onerous Contracts refers to obligations where two parties exchange benefits
i. The performance (or object) does NOT have to be of equal value
ii. Commutative Contract - refers to obligations where the performance for both parties is
of equal value
iii. Aleatory Contract refers to hazardous contracts where a party is uncertain on what
they are getting in exchange BUT they know they are getting something at least
1. Includes Contracts for Hope fishing trips gone bad!!! OR- Insurance
iv. Nominate Contract refers to obligations given under a special designation (such as
sale, lease, loan, or insurance)
v. Innominate Contract refers to obligations given without a special designation

c. Onerous vs. Gratuitous Contracts:

Gratuitous Contracts
** Authentic Act Required
Informal Promises OR- Manual Gifts (given in the
past) are NOT allowed
The price and sale should NOT be proportionate
with the value of the object

Onerous Contracts
Authentic Act NOT Required
Informal Promises OR- Manual Gifts (given in the
past) are allowed
The price and sale should be proportionate with the
value of the object

The sale of a plantation in exchange for $5.00 could

NOT be considered as fair sale, but as a donation in
disguise

HOWEVER Donated immovable property is

neither Onerous or Gratuitous if it is done without an
Authentic Act (since a donation is NOT a sale, and
Donations require authentic acts)

C. Gratuitous Contracts / Donations

a. Donations Inter Vivos refers to donations made by the donor negotiating the instrument,
through endorsement (approval) and delivery
i. The Manual Gift refers to donation inter vivos made without any formality
HOWEVER it is required to be given by face-to-face delivery
1. For example - Automobiles are also such corporeal movables and may therefore
be donated by manual gift, even without complying with the requirement of
registration Such as a stuffed bear may be validly donated by mere real
delivery to the donee Also Charitable Subscriptions are here
2. HOWEVER In the absence of a clear exception, the requirement of an
authentic act remains
3. The Donative Intent - Offers given as a donation must be proven by the donee
Including the mere delivery of the movable, donors outward acts towards
the donee, the relationship between the donor and donee, etc.

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a. For example - To prevent a jealous ex-wife from asking Why she got
the house and not me in his will?
b. A donation may be revoked if the donee has been guilty towards the donor of cruel treatment,
crimes, or injuries
D. Purely Gratuitous, Onerous and Remunerative Donations
a. The 3 Types of Donations Inter Vivos:
i. Purely (or Real) Gratuitous Donation refers to donations made without condition and
merely from kindness
ii. Onerous Donation refers to donations that include a charge
1. HOWEVER Some Onerous Donations are NOT Real Donations---whenever
the objects value is less than 2/3 of the imposed price
iii. Remunerative Donation refers to donations given after the donee has rendered a
service for donor
1. HOWEVER Some Remunerative Donations are NOT Real Donations--whenever the gift given is less than 2/3 of the value of the services
a. Real Donation - when the objects value exceeds by 2/3 the value of the
imposed price or services a gratuitous donation (w/ Authentic Act) is
formed
b. Onerous Donation - when the imposed price or persons services
exceeds by 2/3 of the objects value an onerous donation is formed
b. Mencers Make It Fit Situation - In situations where an (uncle) wants to give his property and
money to his (favorite nephew), but does so without proper form, then the Court will say thatif
this is what the uncle wanted, then they will call it an Remunerative Donation, because the
SERVICES rendered were amounted to at least 2/3 of the uncles property (making it a valid gift)
in other words, the court knew that this was not a proper donation because it wasnt in
form, so they Made it Fit to the uncles wishes by making it a Remunerative Donation and
actually making it work
-------------------------------------------------------------------------------------------------------------------------A. Absence of Cause
a. If there is NO cause, the obligation is NOT ineffectual
i. Thus, if anything seeking to be sold has been destroyed, his obligation then lacks a
cause---therefore, it is NOT an obligation at all
ii. Likewise, the promise of a gift made in contemplation of a future marriage is NOT
enforceable if the marriage does NOT take place
iii. In a situation where a party receives something of benefit (even if its really small and
stated deep in the contracts confusing words, then there is STILL cause HOWEVER
if NO benefit is found anywhere in the contract, then there is NO cause
b. Cause is also absent when the obligation is contracting as the result of violence or threats, or
duress
c. The cause of an obligation may be only partially absent
i. For example - When the thing sold has perished only in part at the time of the sale, the
buyer may terminate his obligation OR- he may accept a reduced obligation matching
with that part of the thing that remains

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B. Failure of Cause
a. A cause may exist at the beginning of an obligation and then fail
i. Thus, if a leased thing is destroyed by an earthquake during the term of the contract
of lease, the lessees obligation to pay rent comes to an end
b. A cause may fail only in part
i. Thus, if a leased thing is only partially destroyed, the lessee may accept an obligation to
pay a reduced rent balanced with that proportion of the thing which subsists

c. Fortuitous Event refers to an unforeseen event that totally destroys the object
d. When a Fortuitous Event damages occurs the debtor must refund the creditor for whatever
partial payment the debtor received probably since its on a pay half now, half later basis
-----------------------------------------------------------------------------------------------------A. Unlawful Cause
a. Obligations with unlawful cause is deprived of effects an obligation is without cause when it
is forbidden by law, or when it against public policy
i. The law grants NO action for the payment of what has been won at gaming or by a bet
UNLESS you are an innocent 3rd party or bystander who lends the gambler money,
but is wholly unconnected with the activity or does NOT know that the money is going
towards gambling, also except for games tending to promote skill in the use of arms, such
as exercise of the bingo, horse and chariot racing
1. Thus, Knowledge of the gambling activity is needed in order for the court to find
the cause unlawful
ii. For example - Such as a contract of sale of immovable property with an intent to operate
a brothel in the property sold
iii. For example - An obligation to pay an attorney or detective a fee based on the termination
of the marriage (to pay by alimony money) has a cause contrary to public policy, and the
contract where the originates is therefore null OR- contracted with someone to witness
or give evidence in a case and receive compensation only if the case wins money this
is against public order or good morals in society (this is mainly to prevent that witness
from committing perjury just to win the case and get his money worth!!!)
iv. For example Things regarded as drug paraphernalia
v. Louisiana law clearly disallows domestic services when the services are interwoven with
the sexual relationship
b. When one party to a contract engages in doing something illicit, such as rendering services for
which he is NOT licensed, but the other has NO reason to know of the unlawfulness, the
innocent party may recover the payment made in performance of his own obligation
------------------------------------------------------------------------------------------------------A. Detrimental Reliance (promissory estoppel)
a. Detrimental Reliance a party may be obligated by a promise when he knew that the promise
would induce the other party to reasonable rely on it to his detriment

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i. For example Jerry told Maya that he would pay for her college tuition if she didnt
work this summer. However, when Maya got to FSU, her tuition remained unpaid.
b. The 3 Elements of Detrimental Reliance:
i. A promise involved
ii. Induced reliance
iii. A change in the promisors conduct or word to the promisees detriment
c. The promisee must be reasonable in his reliance There are 3 ways that a promise may be
unreasonable relied upon
i. Too Big of a Promise - When the promise exceeds the promisors ability to perform
ii. Promisee took this promise WAY too serious - When the promisee acts in a manner
that the promisor could NOT have expected from the promise such as when money is
promised for the promisee to NOT work for a living and, in reliance on that promise, the
promisee indulges in raising his standard of living
iii. Formality is Needed - When reliance is placed on the kind of gratuitous promise with
the requirement that a formal procedure is required, and the promise has been made
without that formal procedure Thus, reliance on a gratuitous donation made in an
unauthentic or informal form is NOT reasonable
1. Thus, when a father informally promised to his daughter and her husband that he
would donate to them immovable land, a promise he did NOT fulfill, the court
concluded that daughter and husband could NOT recover on the grounds of
detrimental reliance because their reliance on the fathers promise had NOT been
reasonable
B. Recovery May Be Limited in Detrimental Reliance
a. The court may NOT grant specific performance to the innocent (disappointed) promise who
relied on the lying promisors fake promise, but only -EITHER- the losses that have been
sustained OR- profit that youve been deprived as a result of the Detrimental Reliance
i. When an obligation is enforced on grounds of detrimental reliance Louisiana courts may,
thus, adjust the extension of the remedy to the circumstances of each case
b. There is NO liability unless there is damage, meaning the promise is predisposed to induce
reliance, and the promisee actually relies to his detriment
i. Detrimental reliance is certainly NOT a motive of the promisor, it is, however, a reason
why he should be bound

Chapter 6: Applying the Theory of Cause

A. Civil Obligations and Natural Obligations
a. Civil Obligations legal or formal obligations that produce all general effects
i. The strongest effect of Civil Obligations is the obligees right to enforce performance by
the obligor

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b. Natural Obligations non-legal or informal obligations that produce only some general effects
i. Unlike Civil Obligations, the obligee does NOT have the right to enforce performance by
the obligor
1. Although, a natural obligation may NOT be enforced by legal action, it gives the
obligee the right to keep the performance (money, item) if the obligor renders it
voluntarily
B. Moral Duty and Legal Duty
a. Every Obligation contains a Duty as a necessary element, but NOT every Duty amounts to an
Obligation Thus, the existence of a Duty (charity or kindness) can NOT be morally denied,
but charity or kindness from others is NOT an Obligation
i. Moral Duties that may give rise to a Natural Obligation (1760) a natural obligation
arises from circumstances in which the law implies a particular Moral Duty to render a
performance to a particular person, because that person has done something for you in the
past
b. Moral Duty - a duty of conscience (natural obligations)
c. Legal Duty - a right to demand a performance (civil obligations)
d. Sanctions of Moral & Legal Duties when NOT fulfilled . . .
i. Legal Duty Sanctions warranted by law bound by the law, meaning one can be
forced or ordered to perform
ii. Moral Duty Sanctions - warranted by criticism NOT bound by law and can NOT be
forced or ordered to perform
C. Moral Duty and Natural Obligations
a. Moral duties may be felt in different degrees Thus, a persons kindness received from another
may NOT be as strongly felt as a material advantage received from of another
i. When such is the case (when a moral duty is so strongly because the other person did
something for them in the past), that duty becomes an element of the natural obligation
D. The 5 Elements for Turning a Moral Duty Into a Natural Obligation
a. The moral duty must be felt towards a particular person and NOT towards all persons in general
b. Special circumstances must exist that allow the assumption that the person involved
reasonably feels that he owes a debt
c. The moral duty must be such that it can be fulfilled through rendering a performance with
financial value
d. A recognition of the obligation by the obligor, which may be made either by performing the
obligation or by promising to perform it must occur --- (a recognition that brings the natural
obligation into existence and simultaneously makes it into a civil one)
e. Fulfillment of the moral duty must NOT be illegal
i. Thus, a promise to pay a gambling debt is NOT enforceable even if made out of a strong
feeling of moral duty
E. Cause and Natural Obligation
a. The cause of obligations is a primary criterion for the classification of contracts and therefore
plays a role of definitive importance in contact characterization

15/33
b. Where a promise is made, the natural obligation shows that the cause makes the new contract
with the obligee onerous rather than gratuitous
i. A natural obligation, in sum, operates as the cause of an obligation. It serves the purpose
of holding as onerous, and therefore valid, an act that would be invalid if it were
gratuitous
-----------------------------------------------------------------------------------------------------------------------------A. Effect
a. A Civil Obligation lies at the root of a Natural Obligation
b. Examples / Good Language
i. When the executor (daughter) of her dead mother takes the maid to court to demand back
her dead mothers $5,000 donation (because the maid received $5,000 for caring for the
mother and being nice to her, thus making the $5,000 donation a Natural Obligation)
the court will hold that the gift was in fact an Onerous transfer because it was payment
pursuant to a natural obligation, and therefore, NOT subject to return as a donation
B. Effect - Performance NOT Recoverable
a. A Natural Obligation is NOT enforceable by judicial action BUT whatever has been freely
performed or given may be reclaimed
i. Thus, for the creditor to take his stuff back and resist an action by the debtor to recover it,
the performance must have been rendered freely
ii. Exception - If the creditor were to induce the debtor to pay through fraudulent means,
then the debtor could recover that payment
b. HOWEVER If an error occurs a debtor may still reclaim from the creditor what he has
paid as long as the performance rendered was NOT civil or natural (as a natural obligation to
pay will be sufficient to prevent recovery)
i. HOWEVER If the error is induced by a fraudulent 3rd party the debtor may only
recover damages from the fraudulent 3rd party and NOT the creditor
c. If the debtor only pays a part of what he owes, the creditor must settle for the debtors
performance, as he has NO action to demand the balance
C. Effect - Promise to Perform (Onerous Contract)
a. The debtors promise to perform his Natural Obligation is Onerous The debtor intends to pay
a debt he feels he owes The debtor is promising something to compensate the creditor for
something else from him received in that past
b. Thus, a debtors promise to perform his Natural Obligation binds himself to the creditor by a
Civil Obligation of which the Natural Obligation is the cause
i. Since NO return promise is expected from the creditor, his acceptance is implied (tacitly
or silently)
ii. HOWEVER Nevertheless, if the debtor intends to perform his Natural Obligation by
making the kind of Onerous Contract for which a formality is exceptionally required, like
the transfer of immovable property for example, the resulting Onerous Contract must be
made in that form
c. The debtors promise to perform his Natural Obligation must be expressed or clearly implied to
be enforceable as a Civil Obligation . though NO particular writing or words need to be used

16/33
i. HOWEVER a partial performance rendered by the debtor does NOT imply a promise
to perform the balance
---------------------------------------------------------------------------------------------------------------A. Remission of Debt
a. Remission of Debt the voluntary abandonment of his right by the creditor in favor of his
debtor a Remission of Debt by an offereor extinguishes the obligation
i. In other words, it is a forgiveness of the debt by the creditor
ii. An creditor may discharge his claim against the debtor, in whole or in part
B. Remission - Express or Tacit
a. A Remission of Debt may be express or tacit
i. Expressed Remission of Debt made orally or in writing
ii. Tacit Remission of Debt when the offeror speaks NO words
1. As when the creditor gives the debtor the full amount owed back without having
received payment OR- when he returns to the debtor the instrument that
evidences the obligation after writing on the back thereof that the debt was
cancelled for services rendered that the debtor acknowledged as the equivalent of
cash
C. Remission - Presumption of Remission
a. A creditors voluntary surrender (tacitly or silently) of the instrument gives rise to a
presumption that the creditor intended to Remit the Debt
D. Remission - Release of Real Security (only for rules on Mortgage and Pledge)
a. The Release of Real Security given for the performance of the obligation does NOT give release
the debt you STILL owe the money, even if they security stops asking for it. In other words,
the mortgage is cancelled, but the DEBT IS NOT.
i. Since the security is accessory to the obligation the performance of which it secures, it
can NOT be presumed that a creditor who relinquishes the security intends also to remit
the debt
E. Remission - Contractual in Nature, Presumption of Acceptance
a. A Remission of Debt is effective when the debtor receives the communication from the creditor
i. HOWEVER Remission of a Debt requires the agreement of both the creditor and
debtor
ii. Acceptance of a Remission is always presumed (since it helps the debotr out ultimately)
UNLESS the debtor rejects the remission within a reasonable time
1. The rejection must be within a reasonable time since the creditor will be
warranted in believing that the Remission has been accepted after a reasonable
time has elapsed
2. The debtor may reject the Remission either
a. Expressly, by communicating his unwillingness to accept
b. Tacitly, by rendering a performance of the obligation that the creditor
receives

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b. The creditor may NO longer revoke the Remission once it has been communicated, but he may
validly revoke it before that time
F. Remission - Gratuitous or Onerous
a. As a contract, the Remission of Debt is Gratuitous A long tradition regards a Remission of
Debt as an act of generosity of the creditor made for the purpose of helping the debtor, who may
lack the means to perform the obligation
b. HOWEVER the creditor may consent to Remit because of some advantage offered him by
the debtor such as by a compromise
c. Remission of the Debt is Onerous when it is entirely compromised in another legal transaction,
for which there is a special designation
i. For example Novation when a new debt is taken on in place of another such as
when the creditor allows the debtor to trade in his old car for an old boatthis is an
Onerous compromise
ii. When the debtor owes $1,000
1. Gratuitous Remission - If the creditor tells him to pay only $200 and keep the
balance for himself as a gift
2. Onerous Remission (Compromise) - If the debtor says he can only pay $200, and
he will do so only if the creditor forgives the balance, because he (debtor) is in a
difficult situation that makes it impossible for him to pay the whole
G. Remission - No Formality Required
a. Gratuitous Remissions are NOT subject to the requirement of form
c. Exception Donation Mortis Causa If the creditors intent is that the Remission take place
upon his death, then it can only be formed in his last will
i. Thus, if the creditor surrenders to the debtor the instrument evidencing the obligation
after writing on the back thereof that the debt will be forgiven in the event of the
creditors death, that act is invalid as a Remission because the deposition does NOT meet
the requirements for any of the forms of a will
------------------------------------------------------------------------------------------------------------A. Compromise (a.k.a. Transaction)
a. Compromise (or Transaction) an agreement whereby the parties prevent litigation (a lawsuit)
from taking place AND- it must be made in writing or recited in court
b. The 3 Eements of a Transaction:
i. Existence of litigation
ii. The intention of putting an end to that litigation
iii. Reciprocal concessions each person must give up something
c. The 3 Elements of a Compromise:
i. A claim that is unliquidated or disputed
ii. A tender by the debtor
iii. An acceptance by the creditor
B. Compromise Types of Compromise (in the Existence of Litigation)
a. Judicial Compromise - when the litigation has already began, and it puts an end to the law suit

18/33
i. For this to occur, NO final judgment has yet been entered UNLESS an appeal can
be taken
b. Extra Judicial - when the litigation has NOT yet started
C. Compromise Intention to Put an End to Litigation
a. An agreement whereby the parties foresee that the litigation may continue will NOT qualify as a
Compromise
i. HOWEVER a Compromise may be partial reaching an agreement on some of the
points of their dispute and allowing the litigation to continue as to the res
b. Parties that agree to a compromise by taking on a novation (new debt) will be required to
perform that new debt
D. Compromise Reciprocal Concessions (or Both Parties Giving up Something)
a. Although this Reciprocity of Concessions or the giving up something from both parties is by all
means necessary for the validity of the Compromise, the sacrifices made by the parties do NOT
have to be of equal value
E. Compromise Cause in Compromise
a. The sacrifice that one of the parties makes of a claim has as its cause the Concomitant
Renouncement - contracts with a twofold cause
i. An end that each of the parties pursue individually
ii. An end that both of them pursue in common
F. Compromise - Acts Compromise
a. It is up to the court to recognize whether or NOT a certain act constitutes a compromise given by
the parties to their agreement
i. Thus, the courts may uncover a contract of a different and illegal kind behind the
agreement called a Compromise by the parties, and they may find a Compromise behind
the appearance of a different act
b. The decision of the trial court will be reversed if a Compromise is admitted despite the lack
of the necessary elements
--------------------------------------------------------------------------------------------------------A. Compromise and Accord and Satisfaction
a. Accord and Satisfaction - a substitute contract to extinguish one duty and replace it with
another for a lower price Where there has been a dispute between the parties as to the exact
amount due and an amount first tendered is returned, and a second amount is sent in settlement
of the controversy, the offer of such accord amount is to be viewed in the nature of a
Compromise The plaintiff had the privilege either to return the checks and sue for the whole
amount, or to keep them and accept the condition, he made his chose and must abide by it

Chapter 7: Vices of Consent

19/33
A. Consent and Freedom
a. Subjective Impairment of Consent occurs in a persons mind where someone gets
information and perceive something based on what they think it is
i. Including error & fraud, since fraud can be induced by another person, but believed based
on what someone perceive it as
b. Objective Impairment of Consent interferes with the persons consent based on an outside
force forcing someone what to think you should be able to point to it and know the time
that it occurred (including duress and fraud)
i. Fraud is both Objective and Subjective because it is an error that is brought about by
another person forcing you what to think
B. Error and Consent
a. Consent must be free of error, fraud, and duress
b. Error - a false idea that a party to a contract has of an element of that contract something
the other party should have known was an error of that contract
i. ANALYSIS WHERE AND WHAT IS THE ERROR & HOW IT AFFECTS???
ii. If consent is prompted by an error, it does NOT then express the partys true will to
consent, and therefore the consent thus given should be ineffective because a party is
ultimately consenting to something to which he did NOT intend to consent
iii. This is Relatively Null because the error can be corrected (especially if the person
chooses to look past their error and buy the object anyway)
c. Error is effective as a ground for nullity regardless of whether it is induced by another or NOT
d. Rule The error may concern a cause when it bears on the thing that is the contractual object
or substantial quality of that thing (Bordelon v. Kopicki)

Chapter 8: Vices of Consent (Cont)

A. Fraud
a. Fraud refers to one with superior knowledge of an objects value who takes undue advantage
over another party, who is totally ignorant of the value of the object and attempting to obtain
relative information for the evil purpose of receiving a benefit or putting the other party
at a loss
i. Fraud is induced through false statements of misrepresentation or through silence
b. IF fraud is found in an obligation A person may have his contract annulled financial loss
is NOT essential
c. Rule When the person to whom the alleged false representation is made does NOT rely on the
representations, but conducts his own investigation, he will NOT be heard to complain of fraud
B. Duress
a. Duress Consent induced under threat, fear, injury, or violence (based on the persons age,
health, and ability to receive duress) causing it to be invalid
b. An obligation under Duress is invalid even if the person favored by the contract did NOT
exercise the violence -AND- was unaware of the duress

20/33
i. HOWEVER A threat of doing a lawful act or a threat of exercising a right (minor
threats) does not constitute duress Duress must be violent in nature
ii. Duresss Modern Approach (Judicial Reaction) the contract is cancelled regardless
of whether it was from the other party or from distressing circumstances
c. Consent and Adverse Circumstances - A person who faces harsh circumstances and is forced
to overcome them by consenting to a contract that is unfairly and excessively onerous, either
because he must promise to give too much or too little

Chapter 9: Object
A. Object of Contract
a. An Object consists of anything lawful
i. Determined or Determinable---The Object must be determinate at least to kind
HOWEVER the quantity of an Object may be undetermined, as long as it is
determinable
b. An object also includes the Sale of Hope and Sale of Future Things:
i. NO CONRACT FORMED Sale of Future Things (there is NO contract, because the
person invests in something of the future, and if they something does NOT come
through, the creditor will get their money back!!!)
ii. CONTRACT FORMED Sale of Hope (there IS a contract, because the person
invests in something for hope that they will get something in return thus, if the
something does NOT come through, the creditor will NOT be able to get his money
back!!!)
iii. NO CONTRACT FORMED---Although the Sale of Future Things are sufficient a
party can NOT promise a party that she will pay her debt based on her mothers
succession
iv. CONTRACT FORMED---Sale of Hope Example A fisherman has been paid a
substantial amount and as a result is obligated to give Jennifer next seasons shrimp that
he catches
B. The Tripartite Relation
a. Stipulation Pour Autrui refers to an offeror who stipulates (or offers) a benefit to a 3rd party
(beneficiary), instead of himself
i. A Beneficiary (3rd party), Stipulator (offeror), and Promisor (offeree) relations
ii. For Example A may sell property to B and stipulate (offer) that B shall pay the price to
C, or A may donate property to B and require that B pay C through a benefit
iii. For Example Ill give you $35,000 for your car, BUT instead of giving it to ME
give it to my daughter
iv. From (stipulator) Through (promisor) To (beneficiary)
b. Once the 3rd party attaches himself to the benefit contract, the contract can NOT be cancelled
without the Beneficiarys consent
c. The Beneficiary may bring a direct action against the promisor to perform his benefit

21/33
C. Tripartite Stipulator and Beneficiary
a. Creditor-Beneficiary refers to when the 3rd party is a creditor of the stipulator, and the
stipulator requires that the price be paid to that Creditor-Beneficiary for the purpose of canceling
his debt owed to that Creditor-Beneficiary
b. 3rd Party Benefit Contract Factors:
i. Legal relationship between stipulator and 3rd party where the stipulator owes a debt
to the 3rd party
ii. Existence of a factual relationship between stipulator and 3rd party
D. Tripartite Stipulator and Promisor
a. The stipulator may demand performance from the promisor with or without the involvement
of Beneficiary
b. Also, the stipulator may cancel the contract for the promisors failure to perform, or demand
damages for nonperformance
i. HOWEVER If the Beneficiary has already availed himself to the contract If the
stipulator and promisor agree to Dissolve the contract that can NOT happen without
the Beneficiarys consent
E. Tripartite Promisor and Beneficiary
a. The Beneficiary has an action of his own against the promisor for specific performance of the
benefit
i. HOWEVER the Beneficiary does NOT have an action for cancellation of the contract
from nonperformance, because the Beneficiary is NOT a party of the contract
1. HOWEVER Once the Beneficiary adds on to the contract, the contract can
NOT be dissolved without the Beneficiarys consent
A. Act of Another
a. Promesse de Porte-fort Opposite of the Stipulation Pour Autrui A promisor may promise
that the contract he is accepting will be performed by another party
i. If the 3rd party does NOT perform, the promisor is liable in damages ... UNLESS the
3rd party shows up and does a terrible job, then the 3rd party will be liable
ii. As long as the 3rd party does NOT bind himself, the promisor remains the sole debtor
BUT as soon as the 3rd party binds himself, the promisor is released

Chapter 10: Putting the Obligor in Default

and Right to Damages
A. Delay
a. The 3 types of Nonperformances:
i. Delayed Performance
ii. Nonperformance
iii. Defective Performance

22/33
b. Absolute Failure to Perform refers to when the debtor renders NO performance at all the
performance is NO longer possible
c. Relative Failure to Perform refers to a debtors late, partial, or defective performance that
still has value to the creditor the performance may NO longer be possible (such as when a
wedding dress came does NOT arrive until after the wedding) UNLESS There is a
fortuitous event, such as a hurricane that destroys the dress
d. Delay refers to a performance that can still be rendered, even thought its specified (or
reasonable) time has expired
e. Default refers to when a Delay Performance has occurred, the creditor must notify the
debtor that the specified (or reasonable) time for performance has passed and is currently due
i. Notice should say if the performance is NOT rendered immediately, the contract
will be deemed Dissolved and the debtor will be held liable for damages
1. HOWEVER A notice is NOT required when the debtor already knew of the
due date (since it was specifically given in the contract)
2. HOWEVER Putting a debtor in Default does NOT mean that a lawsuit will
be filed by the creditor it simply explains that a creditor may recover for
damages if the debtor remains in Default
ii.
iii.
iv.
v.
vi.

The 4 Ways of Placing One in Default:

Written request of performance
Oral request of performance made before 2 witnesses
Filing suit for performance
Specific Provision of the contract (meaning there will NOT be Moratory Damages,
because the creditor does NOT have to notify debtor)

f. When the debtor ignores the Default Notice The debtors second delay will amount to an
absolute or nonperformance when the debtors procrastination makes a delayed performance
physically impossible
i. For example when a repair man waits too late to fix a building, and a week later it
Collapse!!
g. Non-judiciary Default - refers to a creditor who does NOT seek the courts assistance when
putting a debtor in Default, because the creditor made the specified time clear in the contract
B. Failure to Perform Damages
a. Moratory (Delay) Damages refer to a delay damages owed from the time the debtor is put
in Default The creditor may only receive Moratory Damages from a Delayed Performance
b. Compensatory Damages refer to nonperformance damages designed to compensate the
creditor and owed from the time the debtor has failed to perform The creditor may only
receive Compensatory Damages for Absolute Failed performances
i. Compensatory Damages are established based on the Loss Sustained and the Profit
Deprived
1. If the debtor is late performing BUT goes ahead and performs the contract
. you can still get Moratory Damages (from the defaults period of time)
BUT you can NOT get compensatory damages, because the performance has
been fulfilled
c. For Defective Performances Damages will only be established based on what the person
did NOT finish

23/33
C. Anticipatory Breach
a. Anticipatory Breach refers to a Absolute Nonperformance, due to a debtor who explicitly
announces he will NOT perform at the specified* time OR- the creditor has reason to know
the debtor will NOT perform at the specified* time the creditor may only receive
Compensatory Damages for the Anticipatory Breach (owed from the time the debtor failed to
perform)
i. Rule The creditor is NOT required to put the debtor in Default by demanding
performance where the debtor has already refused to perform his obligation
ii. For example - Its clear that the party was not going to perform before you even requested
the performance, because when he was suppose to wash your car, he called you the day
before and said he was in France (dummy!!!)

Chapter 11: Dissolution

A. Contract Remedy
a. Dissolution refers to a creditor who seeks the courts approval to free himself from the
contract because . . .
i. The debtor has failed to perform
ii. Termination
iii. Nullity
iv. Fraud, Duress, or Error
b. Why a Judicial Proceeding? The intervention of the court is the best possible means of
establishing that the complaining party has good reasons to demand dissolution
c. A creditor may NOT obtain Dissolution UNLESS he has already performed (paid) ORwas ready to perform (pay) his obligation when the other party failed to perform
i. A party in a Commutative Contract (receive equal benefit) may refuse to perform his
obligation if the other party has failed to perform
d. The court may pronounce Dissolution without damages when both parties are at fault ORwhen NO fault can be found by either party
e. The court may pronounce Dissolution with reduced or proportioned damages when the failed
performance of the careless debtor was foreseeable
f. The courts intervention is NOT necessary when the performance is still possible
i. Instead of Dissolution, the court will give the debtor an additional delay, a period of
grace, to perform his obligation
1. If the debtor does NOT perform during this grace period Dissolution is then
pronounced (with or without the courts intervention)
g. Partial Dissolution refers to when the court finds that the debtor has performed a
substantial part of his obligation (rendered a defective performance) the creditor can be
compensated only with damage for the unperformed part of the debtors obligation

Chapter 12: Specific Performance

24/33
A. Specific Performance
a. The 3 Contractual Remedies:
i. Specific Performance (the preferred remedy in Louisiana, unlike Damages in
Common Law)
ii. Damages (when specific performance is NOT possible)
iii. Dissolution (with or without damages)
b. Specific Performance refers to the right of the creditor to receive the exact performance that
was promised by the debtor
c. The 3 Categories of Specific Performance:
i. Obligation To Deliver / Give to transfer of a real right (ownership or title of a thing)
(such as delivering immovable property or when the court actually DEMANDS a debtor
to sign the contract that sells his land to the creditor, or selling anything)
ii. Obligation To Do rendering a service
iii. Obligation NOT To Do to abstain from undertaking a certain course of action
d. Upon failure to perform any of these 3 categories the granting of specific performance is at
the courts discretion
i. The court may grant specific performance plus damages (if there was a delay)
ii. If the specific performance is impossible the court will only grant Damages

Chapter 13: Damages

A. Right to Pecuniary Damages
a. When Specific Performance (due to the debtors Nonperformance) is NOT available the
creditor is receives a Dissolution OR- Right To Damages
b. Pecuniary Damages refer to the creditors Loss Sustained and Profit Deprived
i. The creditor is only entitled to damages for the profit of which he has been deprived
1. For example If goods for sale perish through fault of the debtor, the
creditor is only entitled to recover the price of the goods that were loss
ii. In the absence of fraud or bad faith, the debtor is liable only for Pecuniary Damages
which were contemplated at the time the contract was entered into
c. The 3 Requirements for Right to Damages:
i. Existence of Damage
ii. Debtor is at Fault
iii. Direct Connection between fault and damage
B. Total and Partial Nonperformance
a. Partial Nonperformance refers to a performance that is still beneficial to the creditor, despite
the nonperformance nonperformance that is psychological, and NOT mathematical
i. The 3 Types of Partial Nonperformance:
1. Delay
2. Defective

25/33
3. One missed performance (out of several) from a Several Obligation
-------------------------------------------------------------------------------------------------------------------a. Exemplary Damages (a.k.a. Punative Damages) refer to damages that seek to penalize the
debtor in addition to paying Pecuniary Damages
i. In Louisiana, Exemplary Damages are only granted when specifically provided in a
statute
ii. HOWEVER Exemplary Damages are disfavored in Louisiana
b. Nominal Damages refer to damages given because the court feels sorry for the creditor and
knows he deserves something, even though there was NO real loss
i. Nominal Damages are usually extremely small ($10) and rarely given
B. Mitigation of Damages
a. Mitigation of Damages provides that a creditor must make reasonable efforts to mitigate
(lesson) the damages caused by the debtors failure to perform
i. When the creditor does NOT mitigate the damages, the debtor may demand the
damages to be reduced
ii. A reasonable mitigation depends on the circumstances (time, expense, etc.)
b. Fault of the Creditor provides that a creditor may NOT recover damages OR- damages
will be reduced in proportion to the displayed negligence when . . .
i. The creditors own bad faith caused the debtors failure to perform
ii. The creditor knew* that the debtor would cause a failure at the formation of contract
c. Contractual Limitations on Damages provides that a contractual clause is null if tries to
exclude liability in advance for causing physical, gross, intentional, or negligent injury to
another party
d. Proof of Damages (art. 1999) provides that whenever damages are undetermined of precise
measurement the court shall determine a reasonable amount
-------------------------------------------------------------------------------------------------------------------A. Stipulated (Specified) Damages
a. Stipulated Damages provides that the creditor may stipulate or specify predetermined
damages to be recovered for nonperformance, defective performance, or delay
i. The creditor may demand either the stipulated damages OR- performance of the
principal obligation but NOT both (unless damages are for a Delayed
Performance, meaning Moratory Damages and the principle performance may be legally
stipulated)
ii. If the debtor commits a Defective Performance, and the creditor wants to modify his
Stipulated Damages, the court will NOT allow this, because you can NOT go back and
change damages that were already determined in advance
b. If the debtor has a valid excuse for failure to perform he will NOT be held liable
c. A creditor who demands Stipulated Damages does NOT need evidence of his actual loss
d. The creditor may NOT demand Stipulated Damages until the debtor has been put in default
e. Stipulated damages may NOT be modified by the court UNLESS they are so
unreasonable as to be contrary to public policy
--------------------------------------------------------------------------------------------------------------------

26/33
C. Recovery on Quantum Meruit - provides that whenever a creditor fails or forgets to make provision
for a situation in the contract it is assumed that the parties bind themselves to both the expressed
and implied provisions for the contract to achieve its purpose
D. The 2 Ways of Recovery on Obligations that Arise in a Quasi-Contract or a contract Without
Agreement
a. Management of Affairs (a.k.a. Negotiorum Gestio) provides that in a management of affairs
the manager may act without authority to protect the interests of the companys owner
in the reasonable belief that the owner would approve of the action if made aware of the
circumstances
i. For example If your neighbor leaves town and it floods the next day, if the neighbors
boat floats away, the homeowner may protect the neighbors boat by securing it on his
property HOWEVER the protection must be reasonable, meaning the homeowner
can NOT nail the boat down and put holes into it
b. Payment of a thing NOT owed to him, which imposes upon that person the duty to restore the
payment or the thing to the one from whom he received it

Chapter 14: Non-Pecuniary Damages

A. Non-Pecuniary Damages
a. Every damage does NOT consist of monetary compensation . . .
b. Non-Pecuniary Damages refer to moral damages awarded for loss of a persons feelings and
NOT of a material nature
i. Damages that seek to compensate mental anguish, embarrassment, humiliation, etc.
c. It is the loss of the Non-Pecuniary Interest, and NOT the loss of damages that qualify as NonPecuniary Damages
i. Non-Pecuniary Interest refer to emotionally or sentimentally attached interests
ii. For Example - Whenever a debtor fails to build the creditors dream home, which
would serve to improve the familys quality of their lives, and the American dream for
them the court will award Non-Pecuniary Damages for mental anguish
iii. For example I deserve this back because my aunt gave it to me and that was my last
living. Oldest aunt, and I loved her
d. Damages for Non-Pecuniary loss may be recovered when . . .
i. Contracts intent was to gratify a Non-Pecuniary Interest
ii. Debtor knew* that his failure to perform would cause the kind of loss
1. Such damages may also be recovered when the debtor intended to hurt the
feelings of the creditor

Chapter 16: Kinds of Contracts

A. Kinds of Obligations

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a. Real Obligation (1763-1764) refer to the transfer of a real right (follows the property) to a
particular successor, without a special provision to the effect (Mencer will refer to the transfer
of immovable property)
i. HOWEVER a particular successor is NOT personally bound UNLESS he
assumes the personal obligations of his transferor with respect to the thing, and he may
free himself of the real obligation by abandoning the thing
1. For example - When a plaintiff purchases immovable property, he is assigned all of the
rights and privileges granted to the original owner under a contract to faithfully perform
the construction of the home on the property, and will have a cause of action and right of
action against the contractor for his failure to perform his obligation to deliver said home
free of defects

b. Heritable Obligations refers to a performance that is enforced by a successor of the creditor

i. Every obligation (and real rights) are heritable between living persons UNLESS
the obligation terms forbids it (this usually refers to ownership of a thing, such as
enforcing the ownership of a movie theatre or building)
c. Strictly Personal Obligations refers to a performance that is enforced by the creditor himself
OR- a contract where one specific person can fulfill the duty and nobody else can do it
(this usually refer to personal service duties for or from a person inparticular)
i. If that debtor dies who you wanted to fulfill your obligation the contract dies!!!
Therefore, the heirs will reimburse the creditor if the debtor no longer can fulfill his
Strictly Personal Obligation
ii. For example If you go to Annas Beauty Shop, BUT you only want Lisa to do your hair,
then this is a Strictly Personal Obligation
iii. For example When a parent dies in a car accident, the parental rights over the child
terminate, because parental rights are Strictly Personal Obligations
d. Condition refer to an obligation dependant on a uncertain event
e. While Aleatory Contracts exists by a chance (If I give you $100, I will receive whatever you
get at the Casino) --- Conditions refers specifically on an even that will either occur or NOT
occur
i. Suspensive Conditions (on the Will of the Debtor) refer to a condition that may NOT
be enforced until the uncertain event occurs
1. HOWEVER an unlawful or impossible suspensive condition Nulls the
obligation
2. Suspensive Condition on the Whim of the Debtor - Unlike Suspensive
Conditions that depends on the will of the debtor, a Suspensive Condition that
depends on the whim of the debtor makes it NULL!! (Ill sell you my house if I
want to) there is NO offer CRAZY!!!
ii. Resolutory Conditions (on the Will of the Debtor) refer to when the condition may
be immediately enforced BUT ends once the uncertain event occurs
iii. The condition must occur within its specified* time if the event does NOT occur (or
it becomes apparent that the event will never occur) the condition fails
1. Resolutory Conditions on the Whim of the Debtor - Unlike a Resolutory
Condition that depends on the debtors will, a Resolutory Condition that depends
on the debtors will depends strictly on the debtors good faith on IF
something happens (Debtor may say You can stay in my house as when I
move to Canada in June) as long as you are really going to Canada, then it is in
good faith

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f. Obligations With a Term (Articles 1777-1785)
i. Requirements Contract a valid contract where the party may have I will buy all I
require from you and the party is restricted in the sense that he is NOT to purchase to
anyone else HOWEVER the requirements contract may be determined as NULL
when the person is asking more than the creditor may give
ii. If a time is associated with a Suspensive or Resolutory Condition it has a TERM!
1. Suspensive Condition with a TERM I will buy a car from you, but only if I
get approved for a loan (therefore, this has a term, because it will expire next
week)
2. Resolutory Condition with a TERM I will cut your yard for 3 years, but only
except if my loan mower breaks (meaning the contract will come to an end
g. Conjunctive Obligation refers to an obligation where one debtor renders multiple
performances separately
i. I will do this AND- that
ii. (Monthly wages are considered Conjunctive, meaning the creditor can sue for each
months missed payment)
h. Alternative Obligation refers to an obligation where one debtor renders only one of several
performances the choice belongs to the debtor (unless the creditor says differently)
i. I will do this OR- that
ii. The debtor may NOT render 2 partial performances and consider them as one

Chapter 17: Several, Joint, & Solidary

Obligations
A. Several, Joint, and Solidary Obligations
a. Several Obligations refer to multiple debtors who owe separate performances to one
creditor -OR- one debtor owes separate performances to multiple creditors
i. There is a separate contract for each separate creditor/debtor, meaning each legal
bond has NO impact on the others
ii. In a Several Obligation---the creditor(s) could bring suit against each debtor BUT
only for the performance promised by that debtor
iii. Building a house with multiple contractors company
b. Joint Obligations- refer to multiple debtors who owe one combined performance to one
creditor -OR- one debtor who owes one performance to multiple creditors
i. BUT neither debtor is bound for the whole obligation
ii. BUT neither creditor is entitled to the whole obligation

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iii. In a Joint Obligation---the creditor(s) may bring suit against each debtor BUT
only for the performance promised by that debtor
iv. Building a house with one contractor companies (but multiple workers)
c. Solidary Obligations (a.k.a. Obligations In Solido) refer to multiple creditors who have the
right to demand the whole performance from one debtor OR- one creditor who have the
right to demand the whole performance from multiple debtors
i. If the debtor chooses to render the whole performance to just one of the solidary
creditors. the debtor does NOT have to perform for the remaining creditors
ii. In a Solidary Obligation---the creditor may bring suit against every debtor for the failed
whole performance
iii. Building a house with one contractor company (and each worker is responsible for
another workers mistakes)
d. Surety Contracts where one person really owes the debt, but others are co-signing for him
but the company may sue all 3 individuals, because the parties are in a Solidary Contract
-------------------------------------------------------------------------------------------------------------------A. Divisible Obligations refer to obligations with a dividable object (money, ownership, etc.)
B. Indivisible Obligations refer to obligations without a dividable object (a house or horse, etc.)
a. An Indivisible Obligation with multiple debtors or creditors must follow the Solidary Obligation
rules

Chapter 18: Transfer of Obligations

A. Assumption of Obligations provides that a debtor and a 3rd person may agree to an assumption by
the 3rd person of an obligation
a. To be enforceable by the creditor against the 3rd person the agreement must be made in
writing
b. The creditor's consent to the agreement does NOT affect a release of the debtor
B. Subrogation refers to the substitution of one person to the rights of another (legally or informally)
the debtors payment will be made by a 3rd party or by the debtor himself (with the 3rd partys
money)
a. The obligation is extinguished with regard to the original creditor BUT survives in favor
of the third party who is entitled to assert the rights and actions of the former creditor

Chapter 19: Extinction of Obligations

A. Tender and Deposit provides that if the debtor knows* that the creditor will refuse the performance
OR- when debtor delivers an object to a place other than the creditors domicile a notice given to
the creditor that the debtor is ready to perform has the same effect as a Tender
1. If the creditor refuses the Tender . the debtor may deposit the thing or sum of money in a
place designated by the court AND- may declare the performance valid

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2. If creditor accepts the Tender -OR- the court declares the performance is valid the creditor is
liable for all expenses of the deposit
B. Impossibility of Performance provides that when the entire performance owed by one party has
become impossible (because of a fortuitous event) the contract is dissolved
1. The creditor may then recover any payment he has already rendered
C. Novation refers to the extinguishment of an existing obligation for the substitution of a new one
1. For example Jacob was obligated to paint Sheilas home. However, after Sheila sold the home,
Jacobs original obligations party (Sheila) was replaced by the new home owners
1. Subjective Novation substituting the people in a contract changing the people
2. Objective Novation substituting the actual cause changing what were doing
D. Compensation refers to whenever 2 persons owe to each other the same amount of money
compensation extinguishes both the obligations to the extent of the lesser amount
1. Delays of grace do NOT prevent compensation
E. Confusion refers to whenever the qualities of the creditor and debtor are united in the same person
the obligation is extinguished by confusion
1. For example A couple agrees to sale their home BUT ends up buying the home from
themselves (How Confusing?!?!?)

Chapter 20: Proof of Obligation

A. Writing Proof of Obligations refers to an obligation formed through an Authentic Act (a written
agreement between both parties in the presence of a notary public and 2 witnesses AND- signed
by all 5 parties)
a. Parties do NOT have to sign at same time or location
b. If the party is unable or does not know how to sign his name the notary public must cause
him to attach his mark to the writing
B. Testimonial Proof of Obligation provides that Testimonial Proof of Obligation is NOT allowed
whenever the law requires an obligation to be in written form UNLESS the written instrument
has been destroyed, loss, or stolen
C. Judicial Confession Proof of Obligation refers to a statement made by a party in a judicial
proceeding AND- constitutes as full proof against the party who made it

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Chapter 21: Simulation, Nullity, and

Revocatory Action Oblique Action
A. Simulation refers to a contract that by mutual agreement, does NOT express the true intent of the
parties
a. HOWEVER If the true intent of the parties is expressed in a separate writing ... that writing
is a counter-letter
b. For Example When a person is about to leave on a long trip is in need of somebody to take care
of his affairs. Instead of giving a power of attorney to someone, he makes a simulated sale of
his property to a friend or agent for him to act freely as owner, and they also execute a second act
whereby it is clearly stated that the first party is still the real owner
c. Absolute Simulation parties intend that their contract shall produce NO effects between them
d. Relative Simulation parties intend that their contract shall produce effects between them
B. Nullity refers to a contract where the requirements for its formation have NOT been met
a. Absolute Nullity of Contracts refer to a contract that violates a rule of public order (illegal)
b. Relative Nullity of Contracts refer to a contract that violates a rule intended for the
protection of private parties (as when a party lacked capacity or did not give free consent at the
time the contract was made)
C. Revocatory Action Oblique Action refers to a creditor that has the right to cancel the debtors act
that causes the debtors Insolvency
a. Insolvency refers to when the debtors liabilities exceed his assets (bankruptcy)
b. A Revocatory Action must be brought within one year from the time the creditor knew* of the
act that forms the basis of the action

Sample Answer for Exam (According to Prof. Mencer):

A. When __(issue)__ exists courts will generally question whether or not there is a (rule).
B. In this case, when (creditor and debtor) did (multiple facts).
C. Thus, the court will (conclusion).

Obligations Exam Tips

a. Long answer - Organization
NO, chances are her wishes would not be carried.
The issue is whether the will Halle created was in proper form.
Louisiana law states that for a will to be in proper form it must be an authentic act. The elements of an
a.a. are (1) (2) (3).
In establishing the first element, that a notary and the person were present, the facts stated that a notary
was present. However, because there were not 2 witnesses for the will, it was not in proper form/

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Therefore, due to the will not being in proper form, Halles wishes will not be carried out.
b. When you are writing your answer, do NOT include a However sentence (unless the analysis
strictly requires it)
i. If you do have to write a However sentence, keep it to ONE SENTENCE ONLY
c. Short answer Organization
Yes, the lot owner would be held liable, because the Safe Harbor Provision which protects lot owners is
only liable when (1) the vehicle owner has complete dominion over the vehicle and (2) the vehicle
owner is aware that the lot is unattended. The facts state that he had his motorcycle keys, which would
signify complete dominion. However, because the owner did not make the vehicle owner aware that the
lost was unattended, he has failed the second prong. Therefore, the lost owner is liable.
d. Second Short Answer Organization
i. The second short answer should be even SHORTER than the first short answer.
Yes, because both provisions of the Safe Harbor Provision are not met. John has his keys (complete dominion)
and he was aware (the sign being posted), which would make the owner free from liability
c. Mencers Language:
i. A reasonable person would assume . . . (that this counteroffer was not a rejection, rather,
it was a modification through continued negotiations)
d. Questions involving Remunitive Contracts
i. Real Donation - when the objects value exceeds by 2/3 the value of the imposed price
or services a gratuitous donation (w/ Authentic Act) is formed
ii. Onerous Donation - when the imposed price or persons services exceeds by 2/3 of the
objects value an onerous donation is formed
iii. YOU MUST MENTION THE 2/3 NUMBERS!!!!!!!!