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Louisiana Bar > Civil Code 3 > Flashcards

Civil Code 3 Flashcards

1
Q

What are the three warranties?

A

Warranty against eviction, warranty of fitness, and warranty of redhibition

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2
Q

When does the warranty against redhibition apply?

A

Either:

  • the thing is so useless or its use so inconvenient that it must be presumed that the buyer would not have bought the thing had he known of the defect or

-the defect diminished the usefulness or value of the thing that it must be presumed that he would have bought the thing for a lesser price

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3
Q

What are the other requirements of a warranty against redhibiton?

A

The defect must have existed at the time of delivery.

The defect must be apparent or discoverable by a reasonably prudent buyer

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4
Q

What is the duty to inspect the thing sold?

A

Reasonableness of the inspection based on:
-the buyer’s knowledge and expertise
-the opportunity for the inspection
-assurances made by the seller

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5
Q

What are the consequences of a good faith seller with a warranty against redhibition?

A

They have the opportunity to fix the defect.

The prescription is 1 year from the discovery of the defect or 2 years from delivery of the thing.

There is a deduction of the value of use derived by the buyer.

The seller must restore the purchase price and reasonable expenses of the sale or the reduction of the price.

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6
Q

What are the consequences of a bad faith seller on the warranty against redhibition?

A

There is no opportunity to fix the defect.

The seller must restore the purchase price, any reasonable expenses of sale, and if the buyer wouldn’t have bought they must pay damages and attorney’s fees.

Prescription is one year from discovery of the defect or 10 years from the perfection of the sale.

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7
Q

How can you be a bad faith seller in a warranty against redhibition?

A

You must actually know of the defect and omit or declare the thing has a quality you know it does not have.

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8
Q

How can you be a good faith seller in a warranty against redhibiton?

A

Not know the thing had a defect.

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9
Q

How do you extend a warranty of fitness for extraordinary use?

A

The warranty of fitness protects ordinary use but can be extended for extraordinary use if

-the buyer has a particular use in mind for the thing
-the seller knew or should have known of the buyer’s particular purpose
-the seller knew or should have known the buyer is relying on the seller’s skill and judgment in selecting the thing

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10
Q

What is the prescription period for a warranty of fitness?

A

1 year from discovery of the defect
2 years from delivery of the thing

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11
Q

Is an oral transfer of immovable property valid?

A

Yes, but only when the property has been actually delivered and the tranferor recognizes the transfer when interrogated under oath.

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12
Q

May the depositary use the deposited thing?

A

Only if he has the express or implied permission of the depositor.

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13
Q

How long is a mortgage effective?

A

A mortgage is effective on the public records for 10 years after the date of the act of mortgage.

If some part of the secured obligation matures 9 years or more beyond the date of the act of mortgage and the act of mortgage clearly expresses that fact, the mortgage is effective for 6 years beyond the described maturity date.

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14
Q

When do you have to reinscribe a multiple-indebtedness mortgage of only 8 years?

A

Generally, you must reinscribe 10 years after the date of the mortgage.

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15
Q

What are the requirements of making a lease?

A

The consent of the parties
The lease
The rent: certain or determinable

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16
Q

What is the maximum term for a lease?

A

99 years, if longer will be reduced to 99 years

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17
Q

When does tacit reconduction apply?

A

When there is a fixed lease, it will continue under the same conditions as before if the lessee possesses the thing for long enough

Type of lease - possession - new lease

Agricultural - 30 days - year to year

Nonagriculatural - 1 week - month to month

Lease less than 1 week - 1 day - equal to expired term

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18
Q

When can you terminate an indeterminate lease?

A

With notice (written for immovables)

30 days if longer than 1 month

10 days if month to month

5 days if one week to one month

anytime if less than 1 week

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19
Q

When is the termination of a fixed lease?

A

Expires at its term

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20
Q

What are the lessor’s obligations?

A

To deliver the thing at the agreed upon time in good condition

To maintain the thing in a condition suitable for the purpose of which it was leased

To protect the lessee’s peaceful possession of the thing

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21
Q

What type of repairs must a lessor make?

A

All necessary repairs to maintain the thing as long as it was not the lessee’s fault

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22
Q

What types of repairs must a lessee make?

A

Repairs caused by their fault or someone on the premises with their consent

They must also remedy deterioration resulting from his use if it exceeds the normal wear and tear

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23
Q

Does a lessee have to let a lessor make repairs?

A

Yes. A lessee must tolerate repairs that cannot wait until the end of the lease. If they suffer a large inconvenience, they might be entitled to rent reduction.

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24
Q

When does a promissory note prescribe?

A

5 years after each installment is exigible (due and owing)

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25
Q

What must be in a mortgage for it to be valid?

A

It must be:
-in writing
-signed by the mortgagor
-describe the indebtedness secured or the maximum amount that might be secured at any given time
-describe the nature and situation of the immovable propeorty

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26
Q

Which debt gets paid out first if there are multiple debts on a property?

A

The debt that is valid in form, has not prescribed, and was filed first in the correct records office in the parish where the immovable is situated.

Super priority occurs when you file an action within 7 days of passing the act. If this occurs, then the act will take priority.

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27
Q

What must error concern to vitiate consent?

A

Error must concern a cause without which the obligation would not have been incurred and the other party must have known or should have been known of that cause.

Error may concern a cause when it bears on the nature of the contract, or the thing is the contract object or a substantial quality of the thing, or the person or qualities of the other party, or the law, or any other circumstance that the parties regarded, or should have regarded in good faith as a cause of the obligation.

Courts will also consider whether the error was readily discoverable.

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28
Q

When does silence rise to the level of fraud?

A

Only when the law imposes a duty to speak.

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29
Q

What does the warranty against eviction cover?

A

The buyer’s loss of, or danger of losing, the whole or a party of the thing sold because of a third person’s right that existed at the time of sale.

The warranty also covers encumbrances on the thing that were not declared at the time of the sale, with the exception of apparent servitudes and natural and legal nonapparent servitudes, which need not be declared.

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30
Q

Is a modification of the obligation to pay rent effective if it has been pledged?

A

Yes, a modification of the obligation to pay rent that has been pledged is effective against the pledgee without his consent, so long as the pledgor and the obligor made the modification in good faith.

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31
Q

What is the presumption for warranty against redhibitory defects?

A

A defect is considered presumed to have existed at the time of delivery if it discovered within 3 days of delivery.

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32
Q

How can you prove that a redhibitory defect existed at the time of delivery?

A

By the 3 day presumption or by direct or circumstantial evidence giving rise to a reasonable inference that the defect existed at the time of the delivery

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33
Q

What is a good faith seller of a redhibitory defect entitled to?

A

They must only repair, remedy, or correct the defect.

If they are unable to do so, then they must return the price to the buyer with interest from the time it was paid and reimburse the reasonable expenses occasioned by the sale, and costs for preserving the thing.

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34
Q

How do you calculate quantity minors for an immovable?

A

The cost converting the unsound structure into a sound structure.

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35
Q

How are damages measured?

A

By the loss sustained or profit deprived.

A bad faith seller of redhibitory can recover damages and reasonable attorney’s fees.

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36
Q

What are defenses to a redhibition suit where the seller was in good faith?

A

Buyer failed to give the seller timely notice of the defect. When the seller is in good faith, the buyer must give the seller notice of the defect as to give them a chance to make the repairs. This notice is not required if the seller has actual knowledge of the defect.

Waiver

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37
Q

When is a waiver invalid?

A

If it is not clear and unambiguous and brought to the seller’s attention.

A buyer is not bound by an otherwise valid waiver when the seller has declared that the thing has a quality he knew it did not have. This rule effectively prohibits the seller from procuring a waiver by fraud. While the Civil Code speaks of the seller’s affirmative misrepresentations, the LASC has extended this rule to invalidate a waiver when a seller who knows of a defect fails to declare it to the seller.

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38
Q

What is the remedy for a breach of warranty of fitness.

A

Remedies for a breach of contract including judicial dissolution and damages.

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39
Q

What is the prescripiton period for warranty of fitness?

A

Ten years

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40
Q

How can someone recover based on fraud?

A

The buyer must show that the seller’s omissions or misrepresentations made the buyer make an error that concerned a circumstance that substantially influenced their consent to the contract.

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41
Q

What is the remedy for fraud?

A

Fraud vitiates consent and creates a relative nullity.

The parties must be restored to the situation that existed when the contract was made. If it is impossible or impracticable to make restoration in kind, it may be done by an award of damages.

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42
Q

What is the prescriptive period for fraud?

A

5 years

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43
Q

When is a surety a commercial surety?

A

A guaranty is a commercial suretyship if the surety is paid, the surety or principal obligor is a business obligation, or if the obligation arises out of a business transaction.

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44
Q

When is a suretyship extinguished?

A

When the obligee modifies the obligation in a material way without the surety’s consent.

A commercial suretyship is extinguished by modification only to the extent it harms the surety.

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45
Q

What is required for a contract of sale?

A

A contract whereby a person transfers ownership of a thing to another for a price in money.

The thing, the price, and the consent of the parties are requirements for the perfection of the sale.

46
Q

For a contract of sale, how do you determine if thing and price are met?

A

If they are sufficiently determined and if the object is valid

47
Q

What is the acceptance exception for the sale of movables?

A

Sales of Movables: Non-merchants
Generally: acceptance, terms become proposal unless specifically stated otherwise
-different terms become proposals for modification

48
Q

When are additional terms allowed in an acceptance?

A

If the parties to the contract are merchants.

If they are merchants, additional terms are likely to become part of the contract as a matter of course, unless
1) they alter the offer materially or
2) the offer expressly limits the acceptance to the terms of the offer or
3) the offer is notified of the offeror’s objection to the additional terms within a reasonable time

49
Q

How do you know if a party to a sale is a merchant?

A

A party is a merchant if they habitually manufacture, or buy and sell things of the kind involved in the contract.

50
Q

How do you know if a party to a sale is a merchant?

A
51
Q

When does an additional term offer the terms materially?

A

If their nature is such that it must be presumed that the offeror would not have contracted on those terms.

52
Q

What is the remedy when the buyer fails to perform a contract of sale of a movable thing?

A

The seller, within a reasonable time and in good faith, may resell those things that are still in his possession.

Whether it is a reasonable time depends in part on whether the thing sold are perishable or subject to rapid decline in value.

To sell in good faith, the terms of the sale must be “commercially reasonable”

The seller who resold must give the buyer reasonable notice of the sale unless the thing are perishable or subject to a rapid decline in value.

53
Q

How does good faith/bad faith impact what damages an obligor is liable for?

A

A good faith obligor is liable only for the damages that were foreseeable at the time the contract was made.

A bad faith obligor is liable for all damages, foreseeable or not, that are a direct consequence of his failure to perform.

Bad faith is the intentional and malicious failure to perform.

54
Q

When are nonpecuinary damages available?

A
  1. When the contract, because of its nature, is intended to gratify a significant nonpecuinary interest and because of the circumstances surrounding the formation or the nonperformance of the contract, the obligator knew or should have known the failure would result in this kind of loss.
  2. When the obligor intended, through his failure, to aggrieve the feelings of the obligee. It must be shown that the obligor intended to cause the obligee losses of a nonpecuinary nature, such as embarrassment or humiliation.
55
Q

When is a lease reconducted?

A

If at the expiration of the term, and without notice to terminate or other opposition by the lessor and the lessee, the lessee remains in possession for a certain period of time.

56
Q

What is required in an option to buy?

A

An option to buy is a contract whereby a party gives to another the right to accept an offer to sell the thing within a stipulated time. An option must set forth:
-thing
-price
-meet the formal requirements of the sale it contemplates

57
Q

What is the effect is the option to buy agreement has no term?

A

A perpetual or indefinite option to buy agreement is null.

The failure of parties to expressly state a term for the option made part of a lease having a definite term does not render the option invalid if the time for acceptance is necessarily limited by the terms of a lease.

The law generally limits the term of an option of an immovable for 10 years. If the option is granted in connection with a contract that gives rise to obligations of continuous and periodic performance, the option may be granted for as long. period as required for the obligations.

58
Q

What is the maximum term for a lease?

A

99 years

59
Q

Does the transfer of a leased thing terminate the lease?

A

No, unless the contrary had been agreed to between the lessor and lessee

60
Q

When does a person not qualify as a “third person” under the public records doctrine?

A

A “third person” is a person who is not a party to or personally bound by an instrument.

A person who assumes an obligation or is bound by a contract to recognize a right is not a “third person” with respect to that obligation or contract.

61
Q

When does a lessor warrant against eviction?

A

In every lease, the lessor warrants the lessee’s peaceful possession of the leased thing against any disturbance caused by a person who asserts ownership of, or right of possession of, or any right in the thing.

62
Q

What is the remedy when the warranty against eviction is breached?

A

Damages, injunctive relief, or dissolution of the lease

Ask whether injunctive relief is possible given superior rights of possession (ex. someone else bought the property).

63
Q

How does the assumption of a seller’s obligations affect a claim against warrant against eviction?

A

When an obligor and a third person agree to assumption of an obligation, the original obligor remains solidarity bound with the third person.

64
Q

What is subrogation?

A

Substitution of one person to the rights of another. Assignment of rights

65
Q

What is the remedy for breach of a lease?

A

Not every breach of contract entitles the obligee to immediate dissolution when the breach is related to a minor infraction.

In a suit for judicial dissolution, the court may exercise a great deal of discretion in determining whether dissolution is appropriate.

This discretion is called “judicial control” of the lease and can grant an obligor who has failed to perform his obligation additional time.

66
Q

How can you determine whether additional time to perform is appropriate?

A

Courts may look to
1. The extent and gravity of the failure to perform
2. The nature of the obligor’s fault
3. The good or bad faith of the parties
4. The surrounding economic circumstances

67
Q

How are compensatory damages measured?

A

By the loss sustained by the obligee and the profit which has been depirved

68
Q

Exception to the mirror image rule

A

Movables acceptance still forms a contract even if there are additional or different terms so long as there is agreement in the parties communications as to thing and price.

-Merchant rule: become part of k automatically unless they alter the offer materially, offer expressly limits acceptance, the offer is notified of objection to additional terms within reasonable time

-Non-merchant: proposals for modification. If not accepted, can be severed. Must be accepted to be valid.

69
Q

What is the exception for merchants adding additional terms to a contract?

A

They will become part of the contract automatically unless
1. They alter the offer materially
2. The offer expressly limits the acceptance of the terms to the offer
3. Offer is notified of the offeror’s objection to the additional terms within a reasonable time

70
Q

What is a merchant

A

Person who habitually manufacturers, or buys and sells things of the kind involved in the contract

71
Q

What is the default rule about where the place of the delivery for a sale of a movable?

A

Delivery must be made at the place where the thing is located at the time of sale

72
Q

What are the requirements of an object of a contract?

A

Needs to be determined as to kind
Determinable as to quantity

73
Q

How are compensatory damages measured?

A

By the loss sustained by the obligee (out of pocket expenses) and the profit of which he has been deprived (lost profits).

74
Q

How are lost profits measured?

A

Lost profits are measured as the difference between the contract price and the market price on the dates of the breach.

Damages for lost profits must be proved to a reasonable certainty.

75
Q

When are nonpecuinary losses recoverable?

A
  1. When the k is intended to gratify a nonpecuinary interest and and because of the circumstances surrounding the formation or nonperformance of the k, the obligor knew or should have known that failure to perform would cause that type of loss
  2. Obligor intended to aggrieve the feeling of the obligee (humiliation or embarrassment)
76
Q

What is the prescription for an action of rearrages for past due rent?

A

3 years

77
Q

When may a seller cure a defect in a sale?

A

If the time has not expired or if they had a reasonable belief the goods would be acceptable

78
Q

What are the requirements for a perfection of sale?

A

Thing
Determinable price
Consent of the parties

79
Q

What are the requirements of a lease?

A

Thing
Rent
Consent

80
Q

What are the requirements for an option to buy?

A

Thing
Term
Consent

(Be in writing if immovable)

81
Q

How can the right of first refusal be enforced?

A

Specific performance

82
Q

What are the requirements of a right of first refusal?

A

Consent
Thing
(In writing for immovable property)

NOT term

83
Q

What are the requirements for a contract to sell?

A

Thing
Price
Consent

(Same as a sale)

84
Q

What is the prescriptive period for a contract to sell an immovable?

A

5 years

85
Q

What is the time restriction an option or a right of first refusal?

A

For an immovable, it is 10 years. If one is not stipulated, it will be reduced to 10 years.

If there is continuous or periodic performance, the duration will be the performance of those obligations (like rent)

86
Q

What are the obligations of a buyer?

A

Pay the price
Take delivery of the thing

87
Q

What is the liability for a buyer who breaches the duty to take delivery of the thing?

A

They must pay damages that the seller has sustained and expenses incurred for the preservation of a thing

88
Q

What are the requirements of lesion beyond moiety?

A

Sale of corporeal immovable
Vendor can begin an action
Leision must be beyond 1/2 at the time of the sale

89
Q

What are the effects of the lesion beyond moiety?

A

Buyer can either return the thing or keep it and supplement equal difference between price paid and FMV

90
Q

What happens if the buyer has sold the thing in a claim for lesion beyond moiety?

A

Recovery is limited to the profit made by the buyer upon resale.

91
Q

What is the prescription period for lesion beyond moiety?

A

1 year from the date of the sale

92
Q

What are the requirements of a mortgage?

A

In writing
Signed by mortgagor (authentic act not required)
State amount or maximum amount secured
Precise description of the nature and situation of the property (not omnibus)

93
Q

Who is the mortgagee

A

The party in whose favor the mortgage is granted

94
Q

Who is the mortgagor?

A

The party granting the mortgage

95
Q

Who has to sign a mortgage?

A

The mortgagor is the only person who has to sign. The mortgagee’s consent is presumed.

96
Q

What is an omnibus description?

A

One that describes all immovable property within some general geographic region. It is not enough to establish a mortgage

97
Q

What is a suretyship?

A

A suretyship is an accessory contract by which a person binds themself to a creditor to fulfill the obligation of another upon the failure of the latter to do so

98
Q

What are the requirements of a suretyship?

A

Express
In writing
Signed by the party acting as a surety (creditor’s acceptance is presumed)

99
Q

How should you talk about liberate prescription for a promissory note?

A
  1. The period of liberate prescription for promissory notes, whether negotiable or not, is 5 years
  2. Prescription commences from the day that the note or any installments thereunder becomes exigible.
100
Q

List and fully explain the three forms of suretyship.

(5 points)

A
  1. Commercial suretyship is one where
    -the surety is engaged in surety business
    -the principal obligor or the surety is a business corporation, partnership, or other business entity
    -the principal obligation arises out of a commercial transaction of the principal obligor
    -the suretyship arises out of a commercial transaction the surety
  2. Legal suretyship is one given pursuant to legislation, administrative act or regulation, or court order.
  3. Ordinary suretyship is one that it is neither commercial nor legal.
101
Q

What type of modification requires consent for a surety?

A

A material modification

102
Q

Who has the burden of proving the extent to which any material modifications or impairment has not injured the surety?

A

The creditor

103
Q

Is delivery required to perfect a sale for a movable?

A

No, neither delivery nor payment are required for the perfection of a sale.

104
Q

What is a notice of lease?

A

May be recorded in lieu of the lease. It must contain
-names, addresses, and signatures of the parties
-date of execution
-a brief description of the leased property
-the term
-any renewal or purchase options
-reference to the existence of an option , right of first refusal, or other agreement of the lessor to transfer the leased premise

105
Q

What is the maximum time for a lease?

A

99 years

106
Q

How does actual knowledge affect the buying of immovable property?

A

It does not. An unrecorded instrument (lease) affecting immovable property is not enforceable against third persons, even if those with actual knowledge of that instrument.

Are they third persons?

107
Q

Are they third persons?

A

One who has assumed an obligation or is bound by contract to recognize a right is not a third person with respect to the obligation or right to the instrument.

108
Q

Can an assumption of a lease by a purchasing third party be oral or must it be in writing?

A

To be enforceable between the third person and the obligor, the agreement may be verbal.

To be enforceable by the obligee (lessee) it must be made in writing.

109
Q

If a lease has been recorded, can the third party purchaser evict the lessor?

A

Only in the event that the term of the lease has arrived or the lease is otherwise dissolved due to the lessor’s failure to perform one or more of its obligations under the lease.

110
Q

Does a transfer of a leased thing automatically transfer the lessor’s rights and obligations?

A

No, a contractual subrogation of the purchaser to the lessor’s rights is required.

111
Q

When the obligor has rendered substantial performance and the part not rendered does not substantially impart the interests of the obligee, is the contract likely to be dissolved?

A

NO. But you could be liable for damages for nonperformance, measured as actual loss sustained and profit deprived.

112
Q

What does an acceleration clause do?

A

It allows the lessor to recover future rent. The lease may not be dissolved and the lessor may not retake possession of the lease for their own use.

It is like specific performance of the contract.

Louisiana Bar (9 decks)

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