9. Code III: Sales and Leases Flashcards
(122 cards)
1
Q
Warranty against Redhibition: Remedies for Good Faith Seller
A
- useless = entitled to refund of purchase price and reasonable expenses (NO damages/attorney’s fees)
- if not USELESS = quanti minoris
however, buyer MUST give good faith seller opportunity to correct defect before seeking rescission of the sale
2
Q
Good Faith Seller
A
= one who did not know thing had defect
3
Q
Warranty against Redhibition
A
implied in every sale
protects buyer from:
(1) hidden defects in the thing:
(2) present at the time of delivery
(3) that qualify as redhibitory
4
Q
Types of Redhibitory Defects
A
(1) defect that renders the thing either absolutely useless or so inconvenient to use that the buyer would not have bought the thing had he known of the defect
(Remedy = RESCISSION of the sale)
OR
(2) defect that diminishes the usefulness or value of the thing such that it must be supposed that the buyer would have paid a lesser price
(Remedy = quanti minoris)
5
Q
Quanti minoris
A
reduction of the price
remedy for the type of redhibitory defect that diminishes the usefulness or value of the thing such that it must be supposed that the buyer would have paid a lesser price
6
Q
Hidden Defect/ Duty to Inspect
A
one that would likely not be discovered upon reasonably prudent inspection
- buyers knowledge/ expertise
- opportunity to inspect
- assurances made by sellers
7
Q
Burden of Presence of Redhibitory Defect Upon Delivery
A
burden on buyer to prove existence at time of delivery
not the cause of defect
8
Q
Waiver of Warranty against Redhibitory Defects
A
(1) must be clear and unambiguous (“as is” is likely not good enough)
(2) must be brought to buyer’s attention
IMPORTANT: waiver is ineffective against a seller who declared that a thing had a quality that seller knew it did not have
9
Q
Liberative Prescription for Redhibitory Defects: Good Faith Sellers
A
the shorter of:
(i) 2 years from the date of perfection of the sale
(ii) 1 year from the date the buyer discovered the defect
10
Q
Liberative Prescription for Redhibitory Defects: Bad Faith Sellers
A
bad faith = had knowledge of the defect
the shorter of:
(i) 10 years from the date of perfection of the sale
(ii) 1 year from the date the buyer discovered the defect
11
Q
Warranty of Fitness
A
seller warrants that the thing sold is reasonably fit for its ordinary use
governed by the rules of contract
limited to ordinary uses – EXCEPTIONS
12
Q
Warranty of Fitness extended to uses beyond ordinary when:
A
- buyer has some particular use in mind for the thing,
-
seller knows or should know the buyer’s particular purpose,
AND - the seller knows or should know that the buyer is relying on the seller’s skill and judgement in selecting the thing
13
Q
Warranty of Fitness: Remedies
A
damages for the amount of loss sustained by the breach
14
Q
Prescription of Breach of Warranty of Fitness
A
the shorter of:
(i) 2 years from the date the thing was delivered, or
(ii) 1 year from the date the buyer discovered the unfitness
15
Q
Contract to Sell
A
bilateral agreement where the parties promise to enter into a sale at a later date
16
Q
Form for Contract to Sell
A
- must specify the thing and the price
- in writing for immovables
17
Q
Sale: Definition
A
contract whereby a person
transfers ownership
of the thing
to another
for a price in money
sale of immovables must be in writing to affect 3d persons
18
Q
Perfection of the Sale
A
- object
- price (determined or determinable)
- consent of the parties (consider counteroffer)
19
Q
Contract to Sell: Earnest Money
A
money given by buyer to seller to secure the parties’ interests in the event of breach
- must be EXPRESSLY stipulated
- precludes possibility of seeking specific performance and damages (functions as stipulated damages)
20
Q
Contract to Sell: Earnest Money Effects on Breach
A
if buyer recedes from contract: buyer forfeits earnest money
if seller recedes from contract, seller must pay the earnest money given to the buyer plus the same amount
if either party’s failure to perform is EXCUSED, earnest money is not owed
21
Q
Sale of an Immovable: Prescription of Action for Failure to Perform
A
5 years
22
Q
Warranty against Eviction
A
seller warrants the buyer against eviction
23
Q
Eviction
A
the buyer’s loss of or danger of losing
the whole or part of a thing sold
because a third person’s right existed in the thing
at the time of sale
24
Q
Warranty against Eviction: Servitudes
A
warranty against eviction extends to undeclared, nonapparent conventional servitudes
does NOT extend to natural or legal servitudes
25
Seller's Liability for Breach of Warranty Against Eviction: Waiver/Modification by Warranty Sale
parties do not address the matter of the warranty OR they state that the sale is a "warranty sale"
26
Seller's Liability for Breach of Warranty Against Eviction: Waiver/Modification by Warranty Sale
REMEDIES
- **restitution of the price**
- **restitution of fruits** if buyer has to pay them to the owner who evicts him
- all **costs incurred by the lawsuit** concerning the warranty/eviction
- **damages** ONLY IF the buyer did not know about danger of eviction
- **improvements** (all improvements if bad faith seller, only "useful improvements" if good faith seller)
27
Seller's Liability for Breach of Warranty against Eviction: Waiver/Modification by **Non-Warranty Sale**
seller renounces the warranty
28
Seller's Liability for Breach of Warranty against Eviction: Waiver/Modification by **Non-Warranty Sale**
REMEDIES
restitution of the price ONLY IF buyer did not know about danger of eviction
29
Seller's Liability for Breach of Warranty against Eviction: Waiver/Modification by **Buyer's Peril and Risk**
non warranty sale +
(1) **buyer was aware** at the time of the sale the danger of eviction, or
(2) regardless of the buyer's knowledge, the **buyer declared that he was buying the property at his peril and risk**, or
(3) the seller's **obligation of returning** the price of the property has been **expressly excluded**
Remedies for buyer: nothing
30
Seller's Liability for Breach of Warranty against Eviction: **Quitclaim Deed**
assignment of any rights without warranting the existence of those rights
REMEDIES: nothing
31
Warranty against Eviction: Partial Eviction
buyer is entitled to **proportionate reduction in price**
if buyer's **PRINCIPAL CAUSE** was to get the part on which the eviction occurred, buyer could get **complete rescission of sale**
32
Right of First Refusal
unilateral contract in which **one party agrees that she will not sell a certain thing without FIRST offering it to a certain person**
- may be enforced by specific performance
- need not contain a term OR price
- *immovable must be in writing and cannot extend past 10 years (movable capped at 5)*
33
Sale on View or Trial
buyer retains the right to test the goods
*sale is not perfected until the goods have been checked*
34
Sale on a Suspensive Condition (when perfection?)
title does not transfer (sale is not perfected) until the condition is fulfilled
35
Types of Warranties
(1) warranty against redhibition
(2) warranty against eviction
(3) warranty of fitness
36
Option Contract
unilateral K whereby a grantor of the option is BOUND TO BUY OR SELL if the grantee accepts within the time stipulated
37
Option Contract: Requirements
1. thing
2. price
3. correct form (immovables = writing)
4. term
38
Option Contract Term Requirements
can be tied to another contract with a definite term,
NO LONGER THAN 10 years for an immovable
UNLESS tied to a contract that gives rise to obligations of continuous and periodic performance *(ie a lease)*
39
Lesion Beyond Moiety
(1) K for **corporeal immovable**
(2) only **SELLER** can bring action for lesion
(3) price is **less than 1/2 FMV** at time of sale
40
Counteroffer
- an acceptance not in accordance with the terms of the offer is deemed to be a counteroffer
*different terms = proposals for modification* (must be accepted by offeror to be part of K
MERCHANT EXCEPTION
41
Counteroffer Exception: acceptance forms K of sale of movable even if acceptance contains different terms from original offer IF
- THERE IS AGREEMENT ON THE SALE AND THE PRICE
*(no K if acceptance _conditioned_ on acceptance of additional terms)*
42
Merchant Exception for Counteroffers
different terms become part of the K automatically _unless_:
a. they **materially alter** the offer
b. offer **expressly limits acceptance to terms of the offer**
OR
c. offeror **objects within reasonable time**
(still a K just not included automatically)
43
sale of future things
Things not yet in existence
coming into existence = **suspensive condition** so buyer does NOT assume the risk
44
sale of hope
ALEATORY (uncertain)
buyer assumes risk that thing won't materialize
45
Simulation
when parties do not intend a price to be paid (presumed if seller remains in possession)
46
Ownership
Passes to buyer upon perfection of the sale
47
Risk of Loss
risk of loss due to **fortuitous events** (not reasonably foreseen @ time of K) transfers to buyer upon *delivery*
48
Perfection of the Sale: Goods Sold by Weight/ Tail
perfection when weighing/counting completed
49
Perfection of the Sale: Lump Sale
perfection at consent (no counting)
50
Perfection of the Sale: Individualization
things sold must be set aside for buyer when seller can't easily change her mind
51
Perfection of the Sale: Things in Transit
transfer of ownership determined by BILL OF LADING
- person owns the things in transit deliverable to them
- **shipment k** = risk of loss transferred to buyer upon delivery to CARRIER
- **destination K** = risk of loss transferred to buyer when things duly tendered to buyer at place of destination
52
Agreements Preparatory to the Sale
1. Option
2. Right of First Refusal
3. Contract to Sell
53
Implied Warranty of Merchantability
allows buyer to refuse to go through with sale if title of the property is **suggestive of serious litigation**
54
Primary Obligations of the Seller
1. Delivery
2. Implied Warranty Against Eviction
3. Implied Warranty Against Redhibitory Defects
55
Seller's Failure to Deliver
buyer may demand **dissolution** or **specific performance** + buyer is entitled to DAMAGES
56
Obligations of the Seller: Conforming Goods
- seller must deliver goods of agreed kind/quality/quantity
- buyer always has right to inspect (must reject within reasonable time)
- can't accept then later reject
57
Seller's Right to Cure Nonconforming Goods
IF:
1. Time for performance has not expired OR
2. Seller reasonably believed buyer would find nonconforming goods acceptable
58
Intentional Misrepresentation by Seller
innocent misrepresentation/ not of the kind specified = general rules of K
intentional = REDHIBITION
59
Redhibitory Defects MUST:
(1) not be **apparent** (buyer must not know of defect at time of sale)
(2) not **discoverable** at time of sale by a *reasonably prudent buyer of such things* (imposes duty to inspect)
AND
(3) **exist at the time of delivery** (presumed if manifests within 3 days/ reasonable inference otherwise)
60
Warranty against Redhibition: Remedies for Bad Faith Seller
= knew of defect and omits to declare it OR declares it to have a quality it does not have
*manufacturer = always charged with knowledge*
- useless = entitled to refund of purchase price and reasonable expenses
- if not USELESS = quanti minoris
PLUS DAMAGES AND ATTORNEYS FEES
BAD FAITH SELLER HAS NO RIGHT TO REPAIR
61
Considerations for Claims of Breach of Warranty against Redhibition
1. **deduction for use** *(generally only for GF sellers/ BF= court's discretion)*
2. **notice to GF seller** *(so they can repair)*
3. **return** of the thing *(if remedy = rescission , must take care as prudent administrator pending satisfaction of his claim)*
4. **risk of loss** *(thing destroyed BECAUSE of redhibitory defect and buyer gave notice BEFORE fortuitous event)*
5. **quanti minoris**
6. **subrogation** *(buyer can bypass seller and sue manufacturer)*
62
Obligations of Buyer
1. pay the price (can be compelled to pay if seller offers to deliver the thing)
2. take delivery of the thing
63
Breach: Buyer Doesn't Pay
seller can either:
(1) dissolve sale
OR
(2) seek performance (suit for specific performance)
64
Right of Resale
FOR MOVABLES: If buyer doesn't pay, seller has right of selling thing to 3d party and buyer is held responsible for any LOSSES realized in the resale
65
Dissolution for Nonpayment of Price
if buyer fails to pay, seller entitled to dissolution
*if promissory note/ other instrument given to represent price has PRESCRIBED, right to dissolve prescribes as well!!* **5 years**
66
Sale with Right of Redemption
= right to take thing back from buyer
- must be included in act of sale
- must reserved for a _peremptive_ period (5 yrs movables/ 10 immovables)
- immovables = recorded for effectiveness against 3P/ movables = effective against 3P with knowledge of ROR
67
Exchange
K in which each party transfers to the other ownership of a thing for something other than money
68
Eviction of a thing Received in Exchange
person evicted may get **value** of the thing or the **return of the thing he gave**
plus damages
69
Daiton En Paiment
debtor gives a thing to creditor as payment for a debt that is due
70
Contract to Build
(1) buyer has some **control** over the specification of the object
(2) **negotiations BEFORE object is constructed**
AND
(3) K contemplates that any **one party will supply materials and furnish his skill and labor** to build the desired object
breach = breach of warranty of workmanlike performance
71
Contract to Furnish and Install
= K of Sale with suspensive condition
72
Promise or K to Sell
no transfer until actual K of sale
73
Effects of Lesion Beyond Moiety
buyer can EITHER:
(a) return the thing (and get price back)
OR
(b) keep the thing and give seller supplement equal to difference price paid and FMV
*if buyer sold to 3d party - only against OG buyer and capped at his* **profits on resale**
_PEREMPTIVE_ **1 YR** from date of sale
74
Sale of Future Thing transfers when . . .
transfers when thing comes into being
75
Lease
a bilateral contract in which one gives the use of the thing in exchange for the rent
76
Lease: Term
If the parties do not fix a term for the lease, a term will be supplied by law.
77
Fixed Term Lease
tied to a designated date or the occurrence of an uncertain event
MAY NOT EXCEED 99 YEARS
78
Required Elements of a Lease
agreement on the thing
agreement on the rent
*does NOT have to be in writing! - even for immovables*
79
Indefinite Lease: Non-Agriculture (immovable) or Residential (movable)
a non-agricultural lease of an immovable or a residential lease of a movable without a stated term shall have a **month-to-month** term (imposed by law)
80
Lessee's Right to Sublease
can if not expressly prohibited
= transfer of lessee's *right of occupancy* & does NOT promise to pay lessor anything
81
Payment of Taxes on a Leased Thing
Lessor is responsible
82
Making of Repairs on a Leased Thing
*unless otherwise agreed*
Lessor's responsibility:
all other repairs, including those necessary to keep the thing in a condition suitable for the purpose for which it is leased
Lessee's responsibility:
damage that is lessee's fault, and
deterioration caused by lessee's use beyond the normal use of the thing
83
Dissolution of a Lease for Breach
within the court's discretion
factors court will consider:
(a) whether the breach was **major**
(b) whether breach was **fault** of lessee/lessor
(c) whether the breach was in **good faith**
84
Enforcement of a Lease Against a Third Party
requires that the lease be recorded in the mortgage records of the parish in which the immovable property is situated
(actual knowledge is irrelevant)
85
Tacit Reconduction
*ONLY IN FIXED TERM LEASES*
occurs when lessee **continues in possession for a certain period of time after the conclusion of the fixed term _without opposition from the lessor_**
ASK:
1. has the lease been reconducted?
2. if so, how long is new term?
86
*1. Has the Lease been Reconducted?*
Period of Time Required for Tacit Reconduction
NON-AGRICULTURAL LEASE
1 week
87
*2. How long is New Term?*
New Term of Tacitly Reconducted Lease
NON-AG LEASE WITH A TERM LESS THAN 1 DAY
term is equal to expired term
88
Lessee Abandonment
allows lessor to retake the premises and rent to another lessee as a mandatary for the original lessee
but lessor can only recover from original lessee the difference between rent paid by new lessee and rent owed by old lessee
89
Acceleration Clause
if put in lease, allows lessor to **demand payment of all rent due for the duration of the lease** when one payment is not made on time
*does not apply after tacit reconduction because lease becomes month to month (usually)*
90
Termination of the Lease: Indefinite Term
lease term > 1 mo
NOTICE (by either party) MUST BE GIVEN TO TERMINATE
*WRITTEN for leases of immovables or residential leases of movables*
**30 days before end of period**
91
Lessor's Obligations
(1) **deliver** the thing to the lessee
(2) **maintain the thing** in a condition suitable for the purpose for which it was leased
(3) protect the lessee's **peaceful possession** for the duration of the lease
92
Lessor's Duty to Maintain
lessor must make all repairs NECESSARY to maintain thing in a **suitable condition for purpose in which it was leased**
*except for those which lessee is obligated to make*
93
Lessee's Obligations
(1) repair damage to the thing caused by his **fault** or that of persons who use the thing with his consent
(2) repair damage or deterioration due to **use excessive of normal wear and tear**
94
Motorcycle Steering Problem when Going Above Speed Limit: Whose Duty to Repair?
provided the steering problem was not caused by the misuse of the lessee, it is the lessor's duty to make the necessary repairs, because the steering problem seems to prevent the use of the motorcycle for the purpose in which it was leased
95
Lessee Withholding Rent
only acceptable if the lessee could consider the lease extrajudicially dissolved
96
Types of Leases
*categorized by dominant purpose*
- **residential**
- **agricultural**
- **mineral**
- **commercial**
- **consumer** (personal use outside his trade or profession)
97
Indefinite Term Lease
no fixed term/ depends on the will of the parties subsequently expressed
- AG = year to year
- non ag immov/ res movables = month to month
- non res immovables = day to day
98
Indefinite Term Lease
no fixed term/ depends on the will of the parties subsequently expressed
- AG = year to year
- non ag immov/ res movables = month to month
- non res immovables = day to day
99
Termination of Lease: Fixed Term
upon expiration of the term
100
Destruction of the Leased Thing
- completely destroyed = **lease terminates** (no one pays damages)
- partially destroyed/ substantial impairment of use = if lessee is NOT at fault: **lessee can get diminution of rent or dissolution of lease** (if lessor at fault lessee can get **DAMAGES**)
*if impairment caused by _external circumstances_ lessee only gets dissolution* (eg. zoning)
101
Peaceful Possession
Lessor liable if lessee disturbed by:
(1) any person claiming a right in the leased thing OR
(2) persons with access to the thing with lessor's consent or who occupies adjacent property belonging to lessor
*nonwaivable*
102
Lessee's Right to Repair and Deduct
first must make DEMAND that lessor repair
if he doesn't, lessee can repair and demand **immediate reimbursement** *(price lessee pays must be reasonable)*
GENERALLY HE CANNOT WITHHOLD RENT
103
Lessor's Responsibility for Vices and Defects
lessor liable for all DEFECTS AND VICES that **prevent the thing from being used for its intended purpose**
- includes natural decay/ deterioration
- does not have to exist at the time of K/ lessor need not know
104
Waiver for Vices and Defects
(1) clear and unambiguous AND
(2) brought to the attention of the lessee
105
Lessee's Duties
1. use thing as a **prudent administrator** according to the purpose for which it was leased
2. pay the **rent**
3. **return the thing** at the end of the lease in same condition as delivered (minus normal wear/tear)
106
Lessee Misuse of Property
Misuse = lessee uses in way not intended OR in a way that may cause damage
lessor may DISSOLVE lease + damages OR injunctive relief
107
Lessee's Failure to Pay Rent
Lessor may:
(1) sue to dissolve and regain possession
(2) specific performance
PLUS ACCRUED RENT
- can't collect future rent before it's due unless ACCELERATION CLAUSE
- can't BOTH retake possession and collect future rent unless lessee has ABANDONED property and he RELETS it to another (OG amount owed reduced by new rent)
108
Lessee's Right to Assignment
can if not expressly prohibited
= transfer of K (both rights and duties) & includes obligations of paying right to lessor
109
Lessee's Right to Assignment
can if not expressly prohibited
= transfer of K (both rights and duties) & includes obligations of paying right to lessor
110
*Bourbon St. Case*
an owner lessor with full knowledge of potentially harmful effects of lessee's activities on property is answerable for the damages lessee causes
111
Lessee's Right to Improvements
- **right to remove** = lessee may remove all improvements but is bound to restore them to its former condition
- **if he does NOT remove** lessor may (1) keep and pay costs or enhanced value OR (2) demand lessee remove within reasonable time *(if lessee doesn't the lessor may remove at lessees expense or keep and notice by certified mail and not pay)*
112
Lessee's Right to Assignment
can if not expressly prohibited
= transfer of K (both rights and duties) & includes obligations of paying right to lessor
113
Security Deposit
if the lessor in a residential lease does not return the security deposit within **30 days** after written demand, lessee has right to recover the amount of deposit wrongfully withheld and the **greater of $300 or 2X the amount wrongfully withheld**
*(court has discretion to award costs + attorney fees)*
114
*1. Has the Lease been Reconducted?*
Period of Time Required for Tacit Reconduction
AGRICULTURAL LEASE
30 days
115
Waiver for Vices and Defects NOT Effective For
(a) vices lessee didn't know and lessor did/ should have
(b) violate rules prohibiting advance limiting liability
(c) in res/consumer leases, seriously affect or threaten HEATH or SAFETY
116
Termination of the Lease: Indefinite Term
> 1 week
NOTICE (by either party) MUST BE GIVEN TO TERMINATE
*WRITTEN for leases of immovables or residential leases of movables*
**any time before expiration**
117
Termination of the Lease: Indefinite Term
month to month
NOTICE (by either party) MUST BE GIVEN TO TERMINATE
*WRITTEN for leases of immovables or residential leases of movables*
**10 days before end of period**
118
Termination of the Lease: Indefinite Term
1 week – 1 month
NOTICE (by either party) MUST BE GIVEN TO TERMINATE
*WRITTEN for leases of immovables or residential leases of movables*
**5 days before end of period**
119
*2. How long is New Term?*
New Term of Tacitly Reconducted Lease
NON-AG LEASE WITH TERM BETWEEN 1 DAY AND 1 MONTH
day-to-day
120
*1. Has the Lease been Reconducted?*
Period of Time Required for Tacit Reconduction
LEASES WITH A FIXED TERM OF 1 WEEK OR LESS
1 day
121
*2. How long is New Term?*
New Term of Tacitly Reconducted Lease
NON-AG LEASE WITH A TERM OF 1 MONTH OR LONGER
month-to-month
122
*2. How long is New Term?*
New Term of Tacitly Reconducted Lease
AGRICULTURAL LEASE
year to year
