OBLIGATIONS OUTLINE

FALL 2001 – BILBE

I. General Principals
a. Art. 1756 – obligation is a legal relationship in which the obligor is bound to
render a performance in favor of the obligee. Can be a bilateral contract in which
both are bound to perform. Debtor/creditor relationship. Commitment with legal
significance and consequences.
b. Art. 1757 -- obligations can arise from contracts, other declarations of will
(donations), and directly from the law (wrongful acts, unjust enrichment, etc)
c. Art. 1758 – obligations are enforceable.
i. The obligee has 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.
ii. The obligor has 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.
d. Art. 1759 – Contracts/obligations must be performed in good faith on part of both
obligee and obligor.
II. General Types of Conventional Obligations and Rules
a. Art. 1906 – A contract is an agreement between two or more parties whereby
obligations are created, modified, or extinguished.
b. Art. 1907 – Unilateral contracts are when one-sided obligations.
c. Art. 1908 – Bilateral or synallagmatic contracts are reciprocal obligations
between the parties. The obligation of each party is the cause of the other.
d. Art. 1909 – Onerous contract is when each of the parties obtains an advantage in
exchange for his obligation.
e. Art. 1910 – Gratuitous contracts are when one party obligates himself towards
another for the benefit of the latter without obtaining any advantage in return.
f. Art. 1911 – Commutative contracts is when the performance of the obligation of
each party is correlative to the performance of the other.
g. Art. 1912 – Aleatory contracts are 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. A measure of risk and uncertainty in
this type of contract, i.e. an insurance contract.
h. Art. 1913 – An accessory contract is one that is made to provide security for the
performance of another obligation, i.e. suretyship, mortgage, pledge, etc. A
principal contract is the original contract secured in this previous example
between the same parties.

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 i. Art. 1914 – nominate contracts are those with special designations such as sale,
lease, loan, or insurance. Innominate contracts are those without special
designation.
III. Cause
a. Art. 1966 – An obligation cannot exist without a lawful cause.
i. Carpenter v. Williams – ct says no longer valid cause for man to buy house
since boss no longer mandates move. Seller was aware of original cause.
Could also go will error vitiating cause in art. 1949.
ii. Hypo: Agree to buy horse in three years for xx dollars because prime
condition when see it, in interim horse injured and not worth same –
absence of cause.
b. Art. 1967 – Cause is the reason why a party obligates himself. Detrimental
reliance is when a party is 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 his reliance. When such case is enforceable,
the court may grant damages instead of specific performance. Court may even
limit recovery to expenses incurred because of reliance. However, reliance on a
gratuitous promise made without required formalities is not reasonable (a
gratuitous donation not in authentic form). Cause is not synonymous with
consideration.
i. Hebert v. McGuire – Promise of doctor’s office made before surgery and
parties exchange promises at this point. Patient relied on promise to her
detriment. Promise of doctor to collect from ins. Co enforceable because
of this. If promise had been made after surgery, then gratuitous promise.
ii. Edinburg v. Edinburg – husband should recover money owed from wife
for land and expenses into house because of detrimental reliance. He did
work on promise of aunt that would leave house to both husband and wife
and after divorce aunt left only to wife.
iii. Kethley v. Draughon Business College – Unjust enrichment and
detrimental reliance, lawyer taught class relying on notion that
compensation would be more to teach more classes. No contract but
detrimental reliance.
iv. Martin v Schluntz – No written lease, so month to month lease according
to code. Detrimental reliance allows owner to recover the amount she
decreased rent for months rented based on notion going to be long term
lease which it wasn’t.
c. Art. 1968 – An unlawful cause is when the enforcement of the obligation would
produce a result prohibited by law or against public policy – gambling.
i. Art. 2030 – Contract is considered absolutely null when it violates a rule
of public order of immoral. Can be invoked by person or court.
ii. Art. 2983 – Ct will not enforce gambling bets for winners unless games
are those tending to promote skill, i.e. arms, horse racing.
1. Lamy v. Will – ct refuses to enforce commitment to pay (check)
because based on outcome of gambling and loan enforceable
because both plaintiff and defendant parties in gaming.

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 2. Lauer. V. Catalanotto – ct will not enforce contract between two to
split winning and losing of gambling in Las Vegas because both
know cause to be unlawful at making of contract. However, will
enforce repayment of loan made by D to P because although D lost
money given by P in gambling, P was divorced enough from actual
proceedings.
iii. Art. 2984 – Also refuse to allow loser to reclaim loses unless fraud.
iv. McMahon v. Hardin – ct will not enforce a contract which contingent on
parties divorcing because marriage sacred bond and it is against public
policy.
d. Art. 1969 – An obligation may be valid even though its cause is not expressed.
e. Art. 1970 – When the expression of a cause in an obligation is untrue, the
obligation can still be valid if another cause can be shown. I.e. Not valid sale
because of price, but valid gratuitous donation because in authentic form.
f. Art. 1523 – Three types of inter vivos (between the living) donations:
i. Gratuitous – one made without condition
ii. Onerous – one burdened with charges imposed on the donee
iii. Remunerative – one in which the object of the donation is to recompense
for services rendered.
g. Art. 1524 – For a valid onerous donation, the value of the object given must be
fairly equal to the future services or “strings” required by the donee.
i. Succession of Lawrence – Uncle put nephew on all bank accounts years
before death. Nephew did a lot of things for uncle. Court regards
gratuitously rendered services which can easily be given value as basis for
differentiating between gratuitous donations and onerous donations.
Nephew’s services valued high enough to meet requirement in art. 1526.
ii. Thielman v. Gahlman – uncle gave nephew land in exchange that nephew
give uncle place to live until death, and take care of burial needs. Uncle
croaks days later. Not a valid gratuitous donation b/c no authentic form,
not onerous because value of services do not meet requirement of art.
1526. Becomes innominate contract (contracts not regulated by civil code)
because ct distinguishes aleatory element – uncle kept fruits of land in life,
not total give, but with strings.
h. Art. 1525 – For a valid remunerative donation, the value of the services already
rendered in which donation based upon must be fairly comparable to the value of
the thing donated.
i. Art 1526 – The requirement of authentic form is not necessary for onerous and
remunerative donations unless the value of the object given exceeds by one-half
that of the charges or of the services.
j. Art. 1536 – Donations of immovables and incorporeal things or property must be
in authentic form (art. 1833 requires act to be in writing before notary and with
two witnesses) to be valid.
i. Spanier v. DeVoe – Contract of sale for land between mom and daughter
for $5 ruled not valid sale b/c amount not sufficient. Gratuitous donation
but not in authentic form. No donation. Land belongs to mom.

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 ii. D’Orgenoy v. Droz – first two transactions fit def of sale b/c money in
exchange for land, last transaction not sale b/c money for this sale suppose
to be previous money exchanged in first two sales. Court says can’t due
this, but valid donation because of authentic form.
k. Art. 1537 – No feigned delivery of immovables given shall have effect against
third persons.
l. Art. 1538 – Inter vivos donations of movable effects must have authentic form to
be valid.
m. Art. 1539 – However, inter vivos donations of movable corporeals accompanied
by real delivery will be considered a manual gift and no authentic form necessary.
i. Hypo: Bilbe says I will give you this book if you acknowledge, you
acknowledge then Bible says never mind. Not valid donation because no
delivery or authentic form. If Bilbe gave you book, then changed mind,
valid manual gift because already affected delivery. Donee may have to
prove donation.
n. Art. 1540 – Donations effective only upon notice to donor of the donee’s
acceptance of donation in the required form or act.
o. Art. 1541 – Corporeal possession by donee of the effects given in donation will be
enough to consider donation has full effect, even if not yet accepted in express
terms.
p. LSA –R.S. 10:3-201(4) Special legislation dealing with the donation of negotiable
instruments. Permits you to give effect to a gratuitous transfer of negotiable
instrument if done via endorsement. Formalities of donation not necessary.
q. Art. 1560 – Revocation of an inter vivos donation on account of ingratitude only
when: donee has attempted to take the life of the donor; donee has been guilty
towards donor of cruel treatment, crimes, or grievous injuries; or if donee had
refused donor food when in distress.
i. Perry v. Perry – dad revokes donation of stock to son when son orders
sheriff to seize personal assets and belongs of parents to satisfy ct
judgment against company on stock.
r. Charitable donations different from rules of gratuitous donations. Do not need
authentic form. Enforceable because intention is to confer a benefit of good will.
i. La. College v. Keller
ii. Baptist Hospital v. Cappel
s. Art. 1847 – A promise to pay the debt of a third person or debt extinguished by
prescription cannot be established via parol evidence, but rather in writing. This
may possible be analogized to debts extinguished by bankruptcy. According to
jurisprudence writing is not required to prove a promise to pay the debt of a third
person when the promisor had a material interest in making the promise and has
received something in return therefore.
t. Art. 3035 – Suretyship is an accessory contract by which a person binds himself
to a creditor to fulfill the obligation of another upon the failure of the latter to do
so.
u. Art. 3036 – Suretyship may be established for any lawful obligation that is the
principal obligation. It may be presently existing or may arise in future.

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 i. USF&G v. Crais – ins co tries to enforce contract with friend to pay
embezzling friends debt to ins co. Ct rules no lawful principal obligation
for embezzler to pay debt because no lawful cause if motive to keep
embezzler out of jail.
v. Art. 2891 – Loan for use or commodatum is loan of things which may be used
without being destroyed. Loan for consumption, or mutuum, is the loan of things
which are destroyed by use.
w. Art. 2893 – A loan for use is an agreement by which a person delivers a thing to
another under terms that will be used as agreed or according to its natural
destination and will be returned after borrower has done so.
i. Lender cannot get object back until lendee has finished with initial use
negotiated for and is legally enforceable commitment.
x. Art. 2894 – A loan for use is gratuitous, otherwise would be a lease or sale.
y. Art. 2926 – A deposit is an act by which a person receives property of another and
binds himself to preserve it and return it in kind.
i. Depositary responsible for property and must safeguard as if own
property.
z. Art. 2992 – The contract of mandate may be onerous or gratuitous, but in absence
of contrary agreement, assumed to be gratuitous.
IV. Applying Theory of Cause
a. Natural Obligations
i. Art. 1760 – A natural obligation arises from circumstances in which the
law implies a particular moral duty to render a performance.
ii. Art. 1761 – A natural obligation is not enforceable by judicial action. If
freely performed, cannot be reclaimed. Only an onerous contract made for
performance of natural obligation can be enforced.
1. Thomas v. Bryant – enforceable promise (promissory note) to pay
because cause was natural obligation to pay for stepson’s rehab.
Detrimental reliance as well b/c kept stepson in rehab due to
promise to pay half of expenses.
2. Wortmann v. French – Court refuses to annul transfer of home and
furnishings to ex-wife because said man did this out of natural
obligation owing ex due to extramarital affairs. Will not reclaim
promises carried out in name of natural obligations.
3. Stroll v Goodnight – employee paid for bad check out of nat
obligation to employer, cannot regain money after fired.
4. Service Finance Co. v. Daigle – chattel mortgage extinguished by
bankruptcy, no proof of new contract to pay on part of debtor.
Analogy made to art. 1847 requirement of written proof to
establish new contract for debt extinguished by prescription.
iii. Art. 1762 – examples of natural obligations: civil obligation extinguished
by prescription or bankruptcy, obligation made by one who lacks legal
capacity but has discernment, when universal successors are not civilly
obliged to execute donations made by a deceased due to lack of form.
b. Remission of Debt

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 i. Art. 1888 – A remission of debt by an obligee extinguishes the obligation.
It may be express or tacit.
ii. Art. 1889 – An obligee’s voluntary surrender to the obligor of the
instrument evidencing the obligation gives rise to a presumption of
remission of debt. This assumption is rebuttable. A tacit remission would
be one when the obligee gives the obligor a receipt for payment in full
even though he has received no payment or if he were to destroy the
instrument intentionally.
1. Hicks v. Hicks -- Renunciation of debt complete when mom gave
son the original loan notes when due with the words paid in full on
them – tacit remission.
2. Hurley v. Hurley – dad’s expressed remission of debt for son’s
promise to take care of dad for rest of life was considered to be an
onerous donation. Ct ruled dad could revoke donation due to son’s
not fulfilling conditions of donation and ingratitude.
3. Jamison v. Ludlow – remission of debt can become a new
enforceable promise to pay under a natural obligation (1760).
iii. Art. 1890 – 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.
c. Transaction or Compromise
i. Art. 3071 – A transaction or compromise is an agreement between two or
more persons, who, for preventing or putting an end to a lawsuit, adjust
their differences by mutual consent. Contract must either be in writing or
recited in open court.
1. Meyers v. Acme Homestead – signing of check with note all rights
reserved is not a valid compromise. Defendants could have
refused to accept check. But one-sided bargains do not have any
effect.
2. RTL Corp. v. Manufacture’s Enterprises – Valid compromise
because plaintiff’s called defendant’s agent and informed of
problem with check being full payment. Defendant’s silence
indicated acceptance of compromise. So did the negotiations for
the past two months.
ii. Art. 3072 – The person making compromise must be able to carry out
those agreed upon items. A person can only make a compromise for a
third party when authorized by the judge.
iii. Art. 3073 – Transactions or compromises made between the parties is only
for the matter in contention, and for no other differences unless stated
elsewhere.
iv. Art. 3074 – One who has made a transaction concerning a right for
himself, then acquires a similar right, cannot have the original transaction
prejudiced.
v. Art. 3075 – A party may add to compromise a penalty stipulation for non-
performance.

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 vi. Art. 3076 – The creditor who transacts with the surety of his debtor, may
discharge the surety only, and the transaction will not diminish his right
against the debtor. But if it is with the debtor himself that he has
transacted, the surety will likewise have the benefit of the transaction,
because his obligations only an accessory to that of the principal debtor.
vii. Art. 3077 – A transaction made by only one party is not binding of the
others.
viii. Art. 3078 – Transactions have, between the interested parties, a force
equal to the authority of things adjudged. They cannot be attacked on
account of any error in law or any lesion. But an error in calculation may
always be corrected.
ix. Art. 3079 – A transaction may be rescinded whenever there exists an error
in the person or on the matter in dispute, fraud, or violence.
x. Art. 3080 – A transaction may also be rescinded when it has been made
based on a null title.
xi. Art. 3081 – A compromise entered into on documents which have since
been found false, is null.
1. Hypo: If last will and testament upon which based separation of
assets turns out to be false, then compromise of assets is rescinded.
xii. Art. 3082 – A transaction based on an action already adjudged in which
the either parties was ignorant, is null. If compromise made after, even if
unaware, ultimate judicial determination then judgment rules over
compromise. If compromise is made before final judgment, compromise
rules.
xiii. Art. 3083 – Once parties have compromised, valid titles which they knew
nothing of are not grounds for rescission. In attempting to achieve
certainty, parties are taking some risk in actions are not able to receive
rescission unless fraud on part on one party.
V. Consent
a. Union of the Parties’ Will
i. Art. 1927 – Contract is formed by the consent of parties through valid
offers and acceptances. Can be in writing, orally, by action or inaction.
Does not have to mirror if not explicit in offer. An offer is communication
between two parties to enter a contractual agreement. Nothing remains
but to accept offer.
ii. Belgard v. Collins – contractor offers services to defendant to deal with
ins. estimate for damage to house. Gets engineer to look at house. Def.
claims that she thought just over zealous contractor wanting contract and
did not accept offer of consulting services as binding contract. No
meeting of the minds.
b. Expressing Consent
i. Art. 1936 – The manner of acceptance is considered reasonable if it
mirrors the manner of the offer or is one which is customary in similar
transactions, unless otherwise stated in offer.
ii. Art. 1939 – When an offeror indicates that offeree can accept via
performance, through terms of contract or nature, a contract is formed

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 when the offeree begins the requested performance because it is assumed
what is begun will be completed.
1. N. La. Milk Producers Assoc v. The Southland Corp – Court rules
that defendants counteroffer not a valid offer because does not
specify amount to purchase and specific price. Since only one
valid offer, the performance/action of defendants in purchasing
milk from plaintiff is considered acceptance since it was indicated
in offer as so.
iii. Art. 1942 – In certain circumstances, the offeree’s silence may lead the
offeror to reasonably believe that a contract has been formed, and if so, the
offer is deemed accepted.
1. Illinois Central Gulf Railroad Co v. International Harvester –
Lessee wants to modify lease, lessor says no. Lessee does anyway.
Lessor indicates disapproval and attempts to meet with lease, who
does not show. Lessor then is silent for next 16 months and
accepts rent. Then sues to terminate lease for breach. Court says
silence on part of lessor is not indicative of acceptance of lease
modification. Evidence must support silence to mean acceptance.
Mere silence in principle is not to be considered acceptance.
2. Marine Ins. Co., Limited v. Rehm – Is reception of deposit ticket at
parking lot acceptance of terms in which parking lot assumes no
liability? No, court concludes ticket is a receipt and not a
contractual document. Customer did not agree to give up any rights
via law of deposit. Relationship is one of compensated depository
(art. 2937-2939) in which depository is bound to use same
diligence preserving property on deposit as own property and is
responsible for damage if not by accident he was unable to avoid.
3. Cashio v. Amco Transmissions – Ct ruled depository and offer via
sign stating parking $3 was to take car of car in capacity of
depository. Parking of car is acceptance. If the defendant had
wanted to be lease of space and not depository, needed to indicate
on sign no liability, no attendant, assume own risk. It didn’t and
defendant liable for plaintiff’s stolen car.
iv. Art. 2601 – allows for recognition of a contract for a sale of moveable
goods in circumstances where the documents of exchange are not 100%
identical, but do agree on thing and price.
v. Art. 2602 – situation where parties are justified I believing a legal
relationship exists even when communication between the two do not
form a legal contract, if the parties have acted or conduct indicate contract,
then contract consists of those terms in which parties had agreed upon via
communication.
c. The Offer and Duration of the Offer
i. Art. 1928 – An offer which has a specified time for acceptance and is not
described as revocable, then offer is considered irrevocable during that
period of time. Offer may even be irrevocable for period of reasonable
time if no time of acceptance specified and not indicated as revocable. If

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 the offer is revoked during period of irrevocability, the offer can still be
accepted by offeree and form a valid contract.
1. Schulingkamp v. Aicklen – Defendant made offer to plaintiff to sell
land and offer would be irrevocable until act of sale, after 36 days
def. revoked offer. Plaintiff says invalid revocation. Ct rules that 36
days is reasonable time as indicated in code. Revocation valid.
2. Meyers v. Burger King Corp. – offer stated irrevocable for at least
45 days. Ct concludes this means offer may be irrevocable for a
reasonable period after 45 days. BK implied acceptance on day 46
by allowing plaintiff to begin work and signed contract on day 54.
Ct concludes that bid was accepted timely and valid contract.
3. W.M. Heroman & Co. v. Saia Electric – defendant’s bid to do work
as sub-contractor is considered offer. Plaintiff accepted offer when
awarded hotel job. Def. argues that time between offer and
acceptance unreasonable and thereby offer revoked. Ct rules that
during 3 mo. Period communication between parties indicated
knowledge that waiting on hotel award to go forward with their
contract. Offer still valid for acceptance. Also issue of reliance on
part of plaintiff.
ii. Art. 1929 – An irrevocable offer expires if not accepted during prescribed
time.
iii. Art. 1930 – If not irrevocable offer, then considered revocable and can be
revoked at any time before acceptance.
iv. Art. 1931 – A revocable offer expires if not accepted within a reasonable
time.
v. Art. 1932 – Both revocable and irrevocable offers expire at the death or
incapacitation of the offeror or offeree before valid acceptance. Offers are
not transferable nor inheritable.
vi. Johnson v. Capital City Ford – newspaper ad is valid offer because it
entices public to go to business or make a step which pushes them into the
world of contracts. Ct feels plaintiff justified in believing he was accepting
offer made in newspaper even though the written contract says otherwise.
Contractual commitment can be based on newspaper ad.
vii. North Central Utilities v. Walker Community Water Systems – Ct says
mere solicitation of offers/bids does not indicate that an award of contract
to lowest bidder. Plaintiff was not reasonable in his believing this.
d. Option Contracts
i. Art. 1933 – An option contract is a contract by which one party obligates
himself to performance upon the acceptance or indication of the other
party within a period of specified time. Only one party is bound by
contract. Distinguishable from an offer because rights of option contract
are inheritable and assignable. They do not expire at death.
1. Glover v. Abney – considers this not an option contract but an offer
because no consideration. No longer need consideration for option
contract. Since ct ruled offer, not inheritable so no acceptance.

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 ii. Art. 2620 – Consideration no longer needed for option contracts which are
contracts whereby a party gives to another the right to accept an offer to
sell, or to buy, a thing within a stipulated period of time. An option must
have the requisites of a contract, the thing and the price.
1. Hypo: Bilbe writes letter and asks you to send letter in
acknowledgement that you will consider proposal to purchase
property for said amount. You acknowledge you will consider.
Valid option contract. Bilbe changes mind, you can sue for specific
performance because where in the world of contracts.
2. Hypo: Previous situation, but instead of changing mind, Bible dies
– still valid because option contracts are assignable.
iii. Art. 2621 – Acceptance or rejection of option contract is at time
acceptance is received by grantor (like irrevocable offer). Do not
relinquish rights when make a counter offer to an option contract.
e. Communication of the Acceptance and the Time of Contract Formation
i. Art. 1934 – An acceptance of an irrevocable offer is effective when
received by the offeror within the time named or within a reasonable time.
1. Ever-tite Roofing Corporation v. Green – defendants signed offer
from plaintiff co to repair roof. The fine print indicated not
accepted until headquarters approves. Acceptance at time roofing
co began performance—loaded truck with supplies. Time lag of
eight days reasonable because of financing considerations for def.
Contract is valid. Revocation by def. not valid because
performance begun first.
ii. Art. 1935 –An acceptance of a revocable offer is effective when
transmitted by the offeree as long as made in a reasonable or indicated
manner in offer. The risk of transmission is on the offeror.
iii. Art. 1936 – A medium or a manner of acceptance is considered reasonable
if it is the one used in making the offer or one customary in similar
transactions, unless otherwise indicated to offeree.
iv. Art. 1937 – A revocation of a revocable offer is effective when received by
the offeree prior to acceptance.
v. Art. 1938 – A revocation, rejection, or acceptance is received when it
comes into the possession of the addressee or an authorized person, or
deposited in a place addressee had indicated acceptable. The reception
theory. Only applicable if revocable for revocation and irrevocable for
acceptance.
1. Ambrose v. M&M Dodge – sign check to accept offer, but then
changes mind. Not valid/effective acceptance because never
transmitted. Lawyer did not deposit check, but returned it
indicating rejection of offer.
vi. Art. 1940 – If an offer can only be accepted by completed performance,
then the offeror cannot revoke the offer once the offeree has begun
performance and for the reasonable time to complete performance. The
offeree is not bound to complete performance once begun because contract

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 not valid until completed. Bargained for initiation of performance in
common law—the consideration doctrine.
vii. Art. 1941 – 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 had begun to perform, non-compliance subject to damages.
1. Ryder v. Frost -- defendant indicated to plaintiff he would pay
$500 if gets creditors to settle. Acceptance is implied to be
performance. The plaintiff does so and def refuses to pay stating
time completed not reasonable. Ct rules def to pay plaintiff because
negotiations began promptly and no notice needed of acceptance
because should have known plaintiff would start immediately. Also
a case of reliance and moral obligation.
2. Cardinal Wholesale Supply v. Chaisson – contract signed to
guarantee possible credit extension. Express acceptance not needed
according to contract. No credit extended. Later, not contingent on
guarantee co gets credit and defaults. Plaintiff sues defendants for
guarantee, def no longer connected to business. Ct rules implied
acceptance, but time period too long. Should have notified.
f. Acceptance and Terms of the Offer
i. Art. 1943 – An acceptance not in accordance with the terms of the offer is
deemed to be a counteroffer.
ii. Rodrigue v. Gebhardt – amount of deposit and financing costs on
acceptance differs from offer so not a valid acceptance, but rather a
counteroffer which was not accepted by original party.
iii. In common law, a counter offer is considered a rejection. No article
stating a counter to an irrevocable offer is a rejection or not. Best to
indicate in counter that want to reserve right to accept initial offer, but
making counter if want to do business today.
g. Form
i. Art. 1947 – When, in the absence of a legal requirement, the parties have
contemplated a certain form before agreement reached, then it is presumed
that they do not intend to be bound until the contract is executed in that
form.
ii. Breaux Bros. V. Assoc. Contractors – parties negotiated contract and
discussed the necessity of putting the agreement decided upon into
writing, which did not happen. Ct ruled that according to art. 1947, no
contract because did not put in writing as parties agreed. If had agreed to
writing requirement after made agreement, then valid contract without
written form.
iii. Presumption is probably rebuttable.
iv. Barchus v. Johnson – option contract stated acceptance must be within 30
days and since immovable property, in writing. Accepted verbally within
period, but did not do so in writing until after 30 days. Not valid
acceptance of option contract.
h. Offer/Acceptance of Reward Articles

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 i. Art. 1944 – 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. A legal obligation, not contractual.
ii. Art. 1945 – 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 of an equally effective means as the offer.
iii. Art. 1946 – Unless otherwise stipulated, 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.
VI. Vices of Consent
a. Error
i. Art. 1948 – Consent may be vitiated by error, fraud, or duress.
ii. Art. 1949 – Error vitiates consent only when the error concerns the cause
on which the obligation would not have been made without or would not
have been made had one known the truth. Also, the other party must have
known or should have known that this was the cause of one’s consent.
But/for assumption. Granting of relief for error when bilateral error,
misunderstanding, or misinformation by third party. Unilateral error is
when the exception for relief must include that the other party knew the
basis of cause.
1. Oil City Reality v. Bordelon – defendants claim ability to add
fourth bedroom to house was cause for contract and once found out
because of servitude could not have room, error concerning cause
vitiates contract. Court said no because seller’s didn’t know that
this was basis of cause. However, bad ruling because sellers
should have known that size of lot was part of cause and servitude
affects this.
2. Calhoun v. Teal – plaintiff gave defendant additional 50 acres due
to supposed deficiency of acreage in initial sale and then learns no
deficiency and wants 50 acres back. Bilateral misunderstanding.
Third party misinformation. Error on principal cause. Also could
use art. 2299
a. Art 2299 – A person who has received payment or a thing
not owed to him is bound to restore it to the person from
whom he received it.
3. Hypo: Lend Bilbe money which he does not pay and prescriptive
period has run. Later Bilbe pays money back, then asks for it to be
returned in court claiming error articles. Court will not accept
error argument because really a moral obligation – articles 1760-
1762.
4. Wilson v. Levy – error in deed of transfer for land. Both plaintiff
and defendant agree original agreement was not to include the
additional 30 acres, however, deed drawn up incorrectly. Ct
enforces original agreement because of bilateral mistake.
5. Saunders v. New Orleans Public Service – bus accident, lady signs
injury compromise based on diagnosis of doctor referred by

12
 defendant. Exam was inadequate and inaccurate. Court rules no
res judicata on case, because compromise based on error.
Misdiagnosis basis for contract, indicating mutual error.
6. Lyons Milling v. Cusimano – plaintiff wants money defendant
refuses to pay for flour shipment. Defendant says not what ordered
and refused shipment. Error based on the substance of the thing
and quality. Court believes plaintiff should have known what
defendant wanted when ordered.
7. Ouachita A/C v. Pierce – sold Amana and plaintiff wanted York.
Plaintiff wants price of Amana it installed at defendant’s residence.
Both misunderstood conditions of contract. Ct cannot recognize
which wrong to bind contract, so no legal contract.
8. Deutschmann v. Standard Fur – plaintiff gets deposit on fur coat
back because defendant admitted he knew what plaintiff wanted
even though she explained incorrectly, however what she wanted
could not be done so had court specified to what she incorrectly
requested. Error on part of plaintiff vitiates consent because
defendant knew of error.
9. Marcello v. Bussiere – Lounge purchase with no liquor license.
Lease not in writing so not enforceable, part of same contract as
sale, so defendants get deposit back. Also error on cause because
plaintiff knew about liquor license and did not tell defendant.
10. CH Boehmer Sales Agency v. Russo – sale of building which has
lost its non-industrial status and plaintiff did not tell defendant.
There was a communicated assumption by defendant on cause, so
plaintiff knew so rescission. If resisting rescission, do not assume
every communicated assumption gives you a but/for for rescission.
Some risks are to be born by the other party/purchaser. Good
Faith.
11. Universal Iron Works v. Falgout Refrigeration – court states that
plaintiff must convince trier of fact that the defendant made
commitment which plaintiff alleges. Do not have to get to error if
no contract exists. No meeting of the minds, so no contract. If
contract was valid, then 1949 would vitiate consent because error
in the nature of the contract. If was contract, defendant would
have to give damages in 1952.
12. Bischoff v. Brothers of the Sacred Heart – Error to principal cause
in contract so defendant has to pay nothing. Plaintiff knew
defendant school would not hire if knew he was divorced and
remarried without annulment. Error as to the person.
13. Voitier v. Antique Art Gallery – error as to substance of contract.
Purchase of painting believing authentic based on experts opinion.
Belief as to artist is primary motive. Shared assumption, so mutual
and error rescinds.
iii. Art. 1950 – 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

13
 of that thing, or the person or the qualities or the other party, or the law, or
any other circumstance that the parties regarded, as a cause of the
obligation. Relief may be granted when: a party has consented to a
contract different from the one intended, the thing for which a party has
contracted id different from what he understood it to be at the time of
contracting, the person one intended to contract with is different or
different quality, entered into contract based on erroneous conclusions of
law, not ignorance. Relief for error must also meet requirements of art.
1949.
1. Hypo: Buy plate from jeweler for friends wedding unbeknownst to
you that engagement ended the day before—
a. Do not tell jeweler reason for purchase – error is not valid
for void of sale.
b. Tell jeweler about wedding for basis of purchase – error is
not valid for void of sale.
c. Jeweler is the official registry site for wedding – error is
valid for void of sale because jeweler knew the definite
cause.
2. Hypo: Contract to buy painting hanging in Bilbe’s living room,
unbeknownst to Bilbe the painting he is referring to has been
moved to another room and the buyer is talking about the new
painting in the room. Misunderstanding here, no agreement at to
object being sold. No valid contract. However, under art. 1952,
Bilbe may be required to reimburse the buyer’s expenses incurred
in the non-sale (also 1967 – detrimental reliance).
3. Wise v. Prescott – Error due to nature of contract granted to
plaintiff. Compromise plaintiff signed in regards to personal
injuries not valid because misrepresentation of contract on part of
defendant’s employee. If one person sees contract to describe a
generic one instead of the contract described, then can be legal
grounds for not upholding contract due to error in nature.
4. Hypo: Two people who think they know law, divide estate
believing both equally had a right to estate, then found out only
one has right to land. This is an error to law and using art. 1950,
should get division rescinded based on error.
a. Same situation, but had conscious uncertainty to law, so
they were defining relationship according to art 3078 on
compromise, so no rescission.
iv. Art. 1951 – 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.
v. Art. 1952 – 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 and party was in good faith.
(Reliance expenses). The court may refuse rescission when the effective
interest of the other party requires contract to be upheld. In that case, a
reasonable compensation for the loss he has sustained may be granted to

14
 the party to whom rescission is refused. The party not seeking rescission
must have incurred actual expenses, or no relief.
1. Hypo: Bilbe offers $200,000 to build house, then rescinds because
of his error in calculating and buyer must pay another $260,000 to
build house. Buyer is due the difference if contract is not subject
to rescission (not obvious to buyer that Bilbe made mistake or was
unaware). If contract is rescinded, then buyer is due a small
amount of money to compensate for reliance upon contract.
b. Fraud
i. Art. 1953 – Fraud is the 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. Silence when calculated
to produce a misleading effect is fraud as well.
1. Do not need pecuniary harm to rescind for fraud, can be unjust
advantage or loss of convenience.
2. Orr v. Walker – Even though complaining seller got price he asked
for, hurt by property being owned by neighbor who obtained by
fraudulently representing another to buy land.
ii. Art. 1954 – 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 (employee, relative, etc) has reasonably induced a
party to rely on the other’s assertions or representations.
1. Overby v. Beach – Cannot base decision to purchase on statement
of defendant alone, plaintiff could have and should have checked
with the main office to verify information on rents.
iii. Art. 1955 – 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.
iv. Art. 1956 – Based on the facts of the situation, 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. When committed by a third person
without the knowledge of the party who benefited from it, the other party
is still bound, unless the requirements of arts. 1949- 1952 are met. The
party injured can recover damages from the third person who committed
the fraud.
1. Hypo: Con artist setting man up about to make deal, when another
seller comes along with a similar product and no knowledge of
previous dealings. This new dealer sells man item at higher cost,
but not enough to make suspicious, no rescission.
2. Griffing v. Atkins – Janitor at LSU with platinum ring and
jeweler’s employee takes advantage of his ignorance to purchase
ring. Cannot take advantage of person when you know or should
have known person was led to believe erroneous information.
v. Art. 1957 – Fraud need only be proved by a preponderance of the evidence
and may be established by circumstantial evidence.

15
 vi. Art. 1958 – The party against whom rescission is granted because of fraud
is liable for damages and attorney fees.
c. Duress
i. Art. 1959 – 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. Includes threats to party’s wife and
children. Based on person’s individual makeup and if reasonably feared.
ii. Art. 1960 – 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. Vitiating factor is
fear. Does not have to be directed to the party in question. Judge has
discretion in determining if relief is to be granted.
iii. Art. 1961 – Consent is vitiated even when duress has been exerted by a
third person.
1. Wilson v. Aetna – unfortunate situation, however court rules that
financial or economic duress is not a situation considered in code
or by legislature in drafting code.
iv. Art. 1962 – 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.
1. Coder v. Oteri – Threatening one with a lawsuit is not a form of
duress.
2. Adams v. Adams – Stress of divorce is not valid for claims of
duress. Also threaten bankruptcy action is legal action, so not
duress to invalidate contract or agreement.
3. Jordan v. City of Baton Rouge – forcing plaintiff to sign contract to
relinquish all rights to claims against defendant did not extinguish
liability of the wrecking co, only the city.
v. Art. 1963 – 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 not in good faith and not in collusion with the party exerting duress. A
contract of loan made for the purpose of paying ransom cannot be
rescinded for duress if the lender is in good faith. In order to get
rescission, party must be in collusion with party threatening injury.
vi. Art. 1964 – 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 party, the innocent party or parties to the contract who are innocent
of the duress may recover damages and attorney’s fees at the same time.
d. Lesion
i. Art. 1965 – A contract may be annulled on grounds of lesion only in those
cases provided by law. Only useful for a handful occasions. Ex) difference
between sale price and the price sold for.

16
VII. Kinds of Obligations
a. Real Obligations
i. Art. 1763 – A real obligation is a duty correlative and incidental to a real
right. Real obligation is the real right viewed from a different perspective.
The impact of a real right on property owned by person.
1. Real right of mortgage
ii. Art. 1764 – A real obligation is transferred to the universal successor
(entire patrimony) or particular successor (receives a particular item) 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. A real obligation
attaches to the thing. Cannot seize the personal assets of the particular
successor for debts just because inherited or bought property, can only
seize the property itself.
1. Creditor can seize property with mortgage purchased from original
debtor, even if new owner unaware of mortgage.
2. Just because accept a new debtor (like in mortgage), does not let
the first debtor off the hook unless expressly said by creditor.
3. Breaux v. Laird – Plaintiff sues defendant after plaintiff bought
house from developer who had contract with defendant and his
surety. Now under 1764 – plaintiff only have cause of action
against developer who would in turn sue surety. No tacit
assignment of rights.
a. If controversy involves both specific and general articles,
look at specific first, then general. Specific trumps general
and more recent articles can impliedly repeal the older.
4. McGuffy v. Weil – restriction of use of land, buildings, a real right
and therefore real obligation and assignable to future owners of
land. Only needed to be via written contract and was.
5. Stipulation pour autori (stipulation for another) – express
conclusion that a third party or beneficiary to a party in a contract
should be able to sue based upon contract.
b. Strictly Personal and Heritable Obligations
i. Art. 1765 – 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. Every
obligation can be classified as either heritable or personal.
1. Bogart v. Caldwell – movie plex non-compete clause was heritable
because only stated ended upon selling, not death. Lessening
competition is a benefit to anyone running a theatre. Heritable
obligation to wife.

17
 2. Laricca v. Laricca – divorce appeals or cases are usually personal
obligations and end upon the death of one of the parties. However,
in this case there is a property claim attached to the divorce. If
divorce is granted under fault of husband, then wife (or in turn
estate) can revoke donation of property to him. So in this instance
divorce proceedings continue even though one of the parties has
died, and the obligation is heritable by her successor.
ii. Art. 1766 – An obligation is strictly personal when its performance can be
enforced only by the obligee, or only against the obligor. When the
performance requires the special skill of 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.
1. In Re Minor Female Child – rare instance where no one else can
come in and assert mother’s right in parental rights appeal, so her
death put an end to adjudication. Personal obligation.
c. Simple or Conditional Obligations
i. Art. 1767 – 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.
1. Garig Transportation v. Harris – contract to transfer ownership
between plaintiff and defendant must be approved by Public
Service Commission – a suspensive condition. Defendant
withdraws before commission decides; commission says would
have approved had not defendant withdrawn. Plaintiff wins breach
of contract suit but no damages. Today suit would be covered
under 1772.
2. Manuel v. Shaheen – resolutory contract, because once dad paid
for boat and motor at invoiced price, he accepted ownership and is
liable for accident damage.
ii. Art. 1768 – Conditions may be either expressed in a stipulation or implied
by the law, the nature of the contract, or the intent of the parties.
iii. Art. 1769 – A suspensive condition that is unlawful or impossible makes
the obligation null.
iv. Art. 1770 – 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. Thus a
termination of contract at will clause is not necessarily null if the right to
terminate is exercised in good faith. Not a real potestative condition
which is a condition in which if one or the other parties can decide if the
provision can or will be filled. Not a real obligation, a person who says he
promises to obligate himself to do something if he wants to do it has not

18
 really promised anything. Potestative contracts were unlawful in the 1870
code, but now are just a condition to consider in resolutory conditions of
contracts. Sometimes even if contract has a condition in which allow to
call off contract immediately, the court will rule to have contract continued
or award damages because of effect on the other party.
1. Humble Oil v. Guillory – plaintiff landowner who made a contract
with Garland for ¼ undivided interest of royalties of any mineral
leases made on plaintiff’s land. Does not want to enforce contract
due to new lease. Claims potestative condition. Court says no,
because if so would then be to detriment of Guillory not to lease
property, so the contract is not potestative – not a whim.
2. Long v. Foster and Associates, inc. – radio employment contract –
lease of services and obligated to contract conditions – term, do not
need symmetry in duration of term for affirmation of contact.
3. National Safe v. Benedict and Myrick – on reconventional demand
for breach – defendant claims these facts: contract between the
parties was changed to end at will with no notice (resolutory
condition); plaintiff then ends contract, hires defendant’s key
employee to start new business. Breach of contract. Plaintiff
argues no breach because okay to do so per contract. Court rules
that defendants did indicate that plaintiff breached contract by no
good faith and even though contract nor code specifically indicates
or proscribes breach by bad faith – it is not allowed by courts.
v. Art. 1771 – The obligee of a conditional obligation, pending fulfillment of
the condition, may take all lawful measures to preserve his right.
vi. Art. 1772 – A condition is regarded as fulfilled when it is not fulfilled
because of the fault of a party with an interest contrary to fulfillment.
1. Bacon v. Ford – agreement to acquire real estate based on
defendant’s ability to get financing before said date. Defendant
cannot and plaintiff sues for breach. Suspensive condition. 1772
does not apply because defendants were not at fault in not
receiving financing in time, in good faith.
vii. Art. 1773 – 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.
viii. Art. 1774 – 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. That condition is regarded as fulfilled whenever it
is certain that the event will not occur, whether or not a time has been
fixed.
ix. Art. 1775 – 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 part, nor affect

19
 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.
x. Art. 1776 – 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.
d. Obligations with a Term
i. Art 1777 – 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.
1. Caston v. Woman’s Hospital – contract to take baby pictures, ended
without any notice. Court ruled that hospital administrator had
indicated term would be indefinite as long as okay; so a reasonable
time for term was indicated by the courts as six months and this is
time damages for plaintiff were calculated.
ii. Art 1778 – 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.
1. State v. Orkin – because of advertisement and statements, the
contract between Orkin and customers is for the lifetime of the
structure and easily ascertainable. Not indefinte as defendant
argues. Court gives effect to contract.
2. So. States Masonry v. JA Jones Construction – Pay when paid
clauses – court will not enforce because does not believe the will
of parties when initially contracted to base pay of subcontractors
on the solvency of the company employing general contractor
(1785). Clause is a provision for time of payment if things go as
assumed they would. Now under art 1778, payment would have
been due within a reasonable time.
iii. Art 1779 – 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.
1. Caston v. Bellina – prepayment of loan on land purchase. Contract
did not stipulate prepayment penalty so court assumes the term is
for the obligor (Caston) and that defendant was not allowed to
enforce penalties for their early payment. Art 1780 gave plaintiff’s
right to end term early.
iv. Art 1780 – The party for whose exclusive benefit a term has been
established may renounce it.
v. Art. 1781 – Although performance cannot be demanded before the term
ends, an obligor who has performed voluntarily before the tem ends may
not recover the performance.

20
 vi. Art 1782 – 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.
vii. Art 1783 – 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.
viii. Art 1784 – When the term for performance of an obligation is not marked
by a specific 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.
ix. Art 1785 – Performance on term must be in accordance with the intent of
the parties, or with established usage when the intern cannot be
ascertained.
e. Conjunctive and Alternative Obligations
i. Art 1807 – 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. Examples are salary,
wages, and rents.
1. Gardiner v. Montegut – prescriptive period has run for payment of
wages owed by past employer. Conjunctive obligation, therefore
separate claims. Cannot look at sum owed for past employment as
a whole, but for each employment period. Partial payment made to
plaintiff were not partial to all claims as a whole, put partial to the
oldest, individual, active claim. Each payment distinct in forms of
liberative prescription.
ii. Art 1808 – An obligation is alternative when an obligor is bound to render
only one of two or more items of performance.
1. Madere v. Cole – Misunderstanding between owners of mommie
and daddy dog. Selection of pick of litter was chosen from choices
of payment, so no longer any choice in decision.
iii. Art 1809 – 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.
iv. Art 1810 – 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.
v. Art 1811 – An obligor may not perform an alternative obligation by
rendering as performance a part of one item and a part of another.
vi. Art 1812 – 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

21
 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.
vii. Art 1813 – 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.
viii. Art 1814 – 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.
f. Several, Joint and Solidary Obligations – Multiple Parties
i. Art 1786 – 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.
ii. Art 1787 – When each of different obligors owes a separate performance
to one obligee, the obligation is several for the obligors. When one
obligor owes a separate performance to each of different obligees, the
obligation is several for the obligees. 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.
iii. Art 1788 – 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.
iv. Art 1789 – 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.
v. Art 1790 – An obligation is solidary for the obligees when it gives each
obligee the right to demand the whole performance from the common
obligor.
vi. Art 1791 – Before a solidary obligee brings action for performance, the
obligor may extinguish the obligation by rendering performance to any of
the solidary obligees.
vii. Art 1792 – Remission of debt by one solidary obligee releases the obligor
but only for the portion of that obligee.
viii. Art 1793 – Any act that interrupts prescription for one of the solidary
obligees benefits all the others.

22
 ix. Art 1794 – 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.
x. Art 1795 – 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.
xi. Art 1796 – Solidarity of obligation shall not be presumed. A solidary
obligation arises from a clear expression of the parties’ intent or from the
law.
xii. Art 1797 – An obligation may be solidary though it derives from a
different source for each obligor.
xiii. Art 1798 – An obligation may be solidary though for one of the obligors it
is subject to a condition or term.
xiv. Art 1799 – The interruption of prescription against one solidary obligor is
effective against all solidary obligors and their heirs.
xv. Art 1800 – 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.
xvi. Art 1801 – 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.
xvii. Art 1802 – 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.
xviii. Art 1803 – 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.
xix. Art 1804 – 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. Liability of solidary

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 obligors between themselves, each is liable for his virile portion—this
action is called an action for contribution.
xx. Art 1805 – A party sued on an obligation that would be solidary if it exists
may seek to enforce contributions 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.
xxi. Art 1806 – 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. Example – A, B, C, and D owe X
$12,000 – C is insolvent so now A, B, and D split C’s portion of 3K and
all owe 4K each to X. A renunciation of solidarity in favor of an obligor
still makes the obligor liable and must contribute to the loss (not if debt
was remitted – 1803 – debt then must be borne by the obligee.
VIII. Transfer of Obligations
a. Assumption of Obligations
i. Art 1821 – 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 note affect a release of the obligor.
The unreleased obligor remains solidarily bound with the third person.
ii. Art 1822 – 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. The third person can state the amount of
obligation he is assuming and does not have to be the entire obligation.
iii. Art 1823 – 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. This is when the promise of the third person to pay is
made to the creditor, not the debtor in art 1821.
iv. Art. 1824 – 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 defenses based on the relationship
between he original obligor and obligee. He may not invoke
compensation based on an obligation owed by the obligee to the original
obligor.
b. Subrogation
i. Art 1825 – Subrogation is the substitution of one person to the rights of
another. It may be conventional or legal. The transferability of obligations
between parties (claims for money). Subrogation is also the continuation
of the security of debt for the benefit of the one who paid the debt.

24
 Example—pay uncle’s mortgage, house is still security for the debt, just
instead of uncle owing bank, owes you.
ii. Art. 1826 – When subrogation results form 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. 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.
iii. Art 1827 – An obligee who receives performance from a third person may
subrogate that person tot the rights of the obligee, even without the
obligor’s consent. That subrogation is subject to the rules governing the
assignment of rights. Use the rules of assignment. Repudiating the notion
that the party who subrogated the loan, even if he paid less than the
amount owed, still can claim the entire obligation.
iv. Art 1828 – 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.
v. Art 1829 – 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;
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;
3. In favor of an obligor who pays a debt he owes with others of for
others ands who has recourse against those others as a result of the
payment;
4. In favor of an heir with benefit of inventory who pays debts of the
estate with his own funds; and
5. In the other cased provided by law.
vi. Art 1830 – 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.
IX. Proof of Obligations
a. Art 1831 – A party who demands performance of an obligation must prove the
existence of the obligation. A party who assets that an obligation is null, or that it
has been modified or extinguished, must prove the facts or acts giving rise to the
nullity, modification, or extinction.
b. Art 1832 – When the law requires a contract to be in written form, the contract
may not be proved by testimony or by presumption, unless the written instrument
has bee destroyed, lost, or stolen.
c. Art 1833 – An authentic act is a writing executed before a notary public with two
witnesses.

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d. Art 1834 – An act that fails to be authentic because of the lack of competence or
capacity of the notary public, or because of a defect of form, may still be valid as
an act under private signature.
e. Art 1835 – An authentic act constitutes full proof of the agreement it contains, as
against the parties, their heirs, and successors by universal or particular title.
f. Art 1836 – An act under private signature is regarded prima facie as the true and
genuine act of a party executing it when his signature has been acknowledged,
and the act shall be admitted in evidence without further proof. An act under
private signature may be acknowledged by a party to that act by recognizing the
signature as his own before a court, or before a notary public, or other officer
authorized to perform that function, in the presence of two witnesses. An act
under private signature may be acknowledged also in any other manner
authorized by law. Nevertheless, an act under private signature though
acknowledged, cannot substitute for an authentic act when the law prescribes such
an act.
g. Art 1837 – An act under private signature need not be written by the parties, but
must be signed by them.
h. Art 1838 – A party against whom an act under private signature is asserted must
acknowledge his signature or deny that it is his.
i. Art 1839 – A transfer of immovable property must be made by authentic act or by
act under private signature. Nevertheless, an oral transfer is valid between the
parties when the property has been actually delivered and the transferor
recognizes the transfer when interrogated on oath. An instrument involving
immovable property shall have effect against third persons only from the time it is
filed for registry in the parish where the property is located.
j. Art 1840 – When certified by the notary public or other officer before whom the
act was passed, a copy of an authentic act constitutes proof of the contents of the
original, unless the copy is proved to be incorrect.
k. Art 1841 – When an authentic act or acknowledged act under private signature
has been filed for registry with a public officer, a copy of the act thus filed, when
certified by that officer, constitutes proof of the contents of the original.
l. Art 1842 – Confirmation is a declaration whereby a person cures the relative
nullity of an obligation. An express act of confirmation must contain or identify
the substance of the obligation and evidence the intention to cure its relative
nullity. Tacit confirmation may result from voluntary performance of the
obligation.
m. Art 1843 – Ratification is a declaration whereby a person gives his consent to an
obligation incurred on his behalf by another without authority. An express act of
ratification must evidence the intention to be bound by the ratified obligation.
Tacit ratification results when a person, with knowledge of an obligation incurred
on his behalf by another, accepts the benefit of that obligation.
n. Art 1844 – The effects of confirmation and ratification are retroactive to the date
of the confirmed of ratified obligation. Neither confirmation nor ratification may
impair the rights of third persons.
o. Art 1845 – A donation inter vivos that is null for lack of proper form may be
confirmed by the donor but the confirmation must be made in the form required

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 for a donation. The universal successor of the donor may, after his death,
expressly or tacitly confirm such a donation.
p. Art 1846 – When a writing is not required by law, a contract not reduced to
writing, for a price or, in the absence of a price, for a value not in excess of five
hundred dollars may be proved by competent evidence. If the price or value is in
excess of five hundred dollars, the contract must be proved by at least one witness
and other corroborating circumstances.
q. Art 1847 – Parol evidence is inadmissible to establish either a promise to pay the
debt of a third person or a promise to pay a debt extinguished by prescription. La
jurisprudence indicates a writing is not required to prove a promise to pay the debt
of a third person when the promisor had a material interest in making the promise
and has received something in return therefore.
r. Art 1848 – Testimonial or other evidence may not be admitted to negate or vary
the contents of an authentic act or an act under private signature. Nevertheless, in
the interest of justice, that evidence may be admitted to prove such circumstances
as a vice of consent, or a simulation, or to prove that the written act was modified
by a subsequent and valid oral agreement.
s. Art 1853 – A judicial confession is a declaration made by a party I a judicial
proceeding. That confession constitutes full proof against the party who made it.
A judicial confession is indivisible and it may be revoked only on the ground of
error of fact.
X. Extinction of Obligations
a. Performance
i. Art 1855 – Performance may be rendered by a third person, even against
the will of the obligee, unless the obligor or the obligee ahs an interest in
performance only by the obligor. Performance rendered by a third person
effects subrogation only when so provided by law or by agreement.
ii. Art 1860 – When the performance consists of giving a thing that is
determined as to its kind only, the obligor need not give one of the best
quality but he may not tender one of the worst.
iii. Art 1861 – An obligee may refuse to accept a partial performance.
Nevertheless, if the amount of an obligation to pay money is disputed in
part and the obligor is willing to pay the undisputed part, the obligee may
not refuse to accept that part. If the obligee is willing to accept the
undisputed part, the obligor must pay it. In either case, the obligee
preserves his right to claim the disputed part.
iv. Art 1862 – Performance shall be rendered in the place either stipulated in
the agreement or intended by the parties according to usage, the nature of
the performance, or other circumstances. In the absence of agreement or
other indication of the parties’ intent, performance of an obligation to give
an individually determined thing shall be rendered at the place the thing
was when the obligation arose. If the obligation is of any other kind, the
performance shall be rendered at the domicile of the obligor.
v. Art 1863 – Expenses that may be required to render performance shall be
borne by the obligor.

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 vi. Art 1864 – 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.
vii. Art 1865 – An obligor may not, without the obligee’s consent, impute
payment to a debt not yet due.
viii. Art 1866 – 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.
ix. Art 1867 – 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.
x. Art 1868 – 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 hat, 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 all.
XI. Object and Matter of Contracts
a. Art 1971 – Parties are free to contract for any object that is lawful, possible, and
determined or determinable.
b. Art 1972 – A contractual object is possible or impossible according to its own
nature and not according to the parties’ ability to perform.
c. Art 1973 – 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.
d. Art 1974 – 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.
e. Art 1975 – The quantity of a contractual object may be determined by the output
of one party of the requirements of the other. In such a case, output or
requirements must be measured in good faith.
f. Art 1976 – 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.
g. Art 1977 – 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.
XII. Third Party Beneficiary

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 a. Art 1978 – 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.
b. Art 1979 – 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 ahs an interest in performing, however, the stipulation may not be
revoked without his consent.
c. Art 1980 – In case of revocation or refusal of the stipulation, the promisor shall
render performance to the stipulator.
d. Art 1981 – The stipulation give 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.
e. Art 1982 – The promisor may raise against the beneficiary such defenses based on
the contract as he may have raised against the stipulator.
XIII. Effects of Conventional Obligations
a. General Effects of Contracts
i. Art 1983 – 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.
ii. Art 1984 – 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.
iii. Art 1985 – Contracts may produce effects for third parties only when
provided by law.
b. Specific Performance
i. Art 1986 – Upon an obligor’s failure to perform an obligation to deliver a
thing, or not to do an act or to execute an instrument, the court shall grant
specific performance plus damages for delay if the obligee so demands. If
specific performance is impracticable, the court may allow damages to the
obligee. Upon failure to perform an obligation that has another object,
such as an obligation to do, the granting of specific performance is at the
discretion of the court.
ii. Art 1987 – The obligor may be restrained from doing anything in violation
of an obligation not to do.
iii. Art 1988 – A failure to perform an obligation to execute an instrument
gives the obligee the right to a judgment that shall stand for the act.
iv. Art 1989 – 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.
v. Art 1990 – 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.
vi. Art 1991 – An obligee may put the obligor in default by a written request
of performance, or by an oral request of performance made before two

29
 witnesses, or by filing suit for performance, or by a specific provision of
the contract.
vii. Art 1992 – If an obligee bears the risk of the thing that is the object of the
performance, the risk devotes upon the obligor who has been put in default
for failure to deliver that thing.
viii. Art 1993 – 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.
c. Damages
i. Art 1994 – 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.
ii. Art 1995 – Damages are measured by the loss sustained by the obligee and
the profit of which he has been deprived.
iii. Art 1996 – An obligor in good faith is liable only for the damages that
were foreseeable at the time the contract was made.
iv. Art 1997 – An obligor in bad faith is liable for all the damages,
foreseeable or not, that are a direct consequence of his failure to perform.
v. Art 1998 – 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.
vi. Art 1999 – When damages are insusceptible of precise measurement,
much discretion shall be left to the court for the reasonable assessment of
these damages.
vii. Art 2000 – When the object of the performance is a sum of money,
damages for delay in performance are measured by the interest on the 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 article 2924. 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.
viii. Art 2001 – 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.
ix. Art 2002 – An obligee must make reasonable efforts to mitigate the
damage caused by the obligor’s failure to perform. When an obligee fails
to make these efforts, the obligor may demand that the damages be
accordingly reduced.

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 x. Art 2003 – An obligee may not recover damages when his own bad faith
has caused the obligor’s failure to perform or when, at the time of the
contract, he has concealed from the obligor facts that he knew or should
have known would cause a failure. If the obligee’s negligence contributes
to the obligor’s failure to perform, the damages are reduced in proportion
to that negligence.
xi. Art 2004 – 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.
XIV. Dissolution
a. Art 2013 – When the obligor fails to perform, the obligee has a right to the
judicial dissolution of the contract or, according to the circumstances, to regard
the contract as dissolved. In either case, the obligee may recover damages. In an
action involving judicial dissolution, the obligor who failed to perform may be
granted, according to the circumstances, an additional time to perform.
b. Art 2014 – A contract may not be dissolved when the obligor has rendered a
substantial part of the performance and the part not rendered does not
substantially impair the interest of the obligee.
c. Art 2015 – Upon a party’s failure to perform, the other may serve him a notice to
perform within a certain time, with a warning that, unless performance is rendered
within that time, the contract shall be deemed dissolved. The time allowed for
that purpose must be reasonable according to the circumstances. The notice to
perform is subject to the requirements governing a putting of the obligor in
default and, for the recovery of damages for delay, shall have the same effect as a
putting of the obligor in default.
d. Art 2016 – When a delayed performance would no longer be of value to the
obligee or when it is evident that the obligor will not perform, the obligee may
regard the contract as dissolved without any notice to the obligor.
e. Art. 2017 – The parties may expressly agree that the contract shall be dissolved
for the failure to perform a particular obligation. In that case, the contract is
deemed dissolved at the time it provides for or, in the absence of such a provision,
at the time the obligee gives notice to the obligor that he avails himself of the
dissolution clause.
f. Art 2018 – Upon dissolution of a contract, the parties shall be restored to the
situation that existed before the contract was made. If restoration in kind is
impossible or impracticable, the court may award damages. If partial
performance has been rendered and that performance is of value to the party
seeking to dissolve the contract, the dissolution does not preclude recovery for
that performance, whether in contract or quasi-contract.
g. Art 2019 – In contracts providing for continuous or periodic performance, the
effect of the dissolution shall not be extended to any performance already
rendered.
h. Art 2020 – When a contract has been made by more than two parties, one party’s
failure to perform may not cause dissolution of the contract for the other parties,
unless the performance that failed was essential to the contract.

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i. Art 2021 – Dissolution of a contract does not impair the rights acquired through
an onerous contract by a third party in good faith. If the contract involves
immovable property, the principles of recordation apply.
j. Art 2022 – Either party to a commutative contract may refuse to perform his
obligation if the other has failed to perform or does not offer to perform his own
at the same time, if the performances are due simultaneously.
k. Art 2023 – If the situation of a party, financial or otherwise, has become such as
to clearly endanger his ability to perform an obligation, the other pary may
demand in writing that adequate security be given and, upon failure to give that
security, that party may withhold or discontinue his own performance.
l. Art 2024 – A contract of unspecified duration may be terminated at the will of
either party by giving notice, reasonable in time and form, to the other party.

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