LOUISIANA LAW OF CONVENTIONAL OBLIGATIONS A PRÉCIS SECOND EDITION

LOUISIANA LAW OF CONVENTIONAL OBLIGATIONS A PRÉCIS SECOND EDITION Alain Levasseur With the Assistance of: Kimberly Ulasiewicz

LexisNexis Law School Publishing Advisory Board Paul Caron Professor of Law Pepperdine University School of Law Bridgette Carr Clinical Professor of Law University of Michigan Law School Steven I. Friedland Professor of Law and Senior Scholar Elon University School of Law Carole Goldberg Jonathan D. Varat Distinguished Professor of Law UCLA School of Law Oliver Goodenough Professor of Law Vermont Law School John Sprankling Distinguished Professor of Law McGeorge School of Law

LOUISIANA LAW OF CONVENTIONAL OBLIGATIONS A PRÉCIS Second Edition ALAIN A. LEVASSEUR Hermann Moyse, Sr. and Henry Plauché Dart Professor of Law, Emeritus Director, European Studies Jean Monnet Chair Louisiana State University, Paul M. Hebert Law Center 2015

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Louisiana Code Series CIVIL CODE SERIES LOUISIANA POCKET CIVIL CODE ALAIN LEVASSEUR 2016 LOUISIANA CIVIL CODE PRÉCIS SERIES LOUISIANA LAW OF OBLIGATIONS IN GENERAL ALAIN LEVASSEUR 2015 LOUISIANA LAW OF CONVENTIONAL OBLIGATIONS ALAIN LEVASSEUR 2015 LOUISIANA LAW OF SALE AND LEASE ALAIN LEVASSEUR & DAVID GRUNING 2015 LOUISIANA LAW OF TORTS FRANK MARAIST 2010 LOUISIANA LAW OF PROPERTY JOHN RANDALL TRAHAN 2012 LOUISIANA LAW OF SUCCESSIONS FORTHCOMING LOUISIANA LAW OF SECURITY DEVICES MICHAEL H. RUBIN 2011 LOUISIANA LAW OF PERSONS MONICA H. WALLACE, FORTHCOMING iii

ABOUT THE AUTHOR Professor Alain Levasseur is a graduate of the Universities of Paris (France) and Tulane. He was an associate with the Paris firm of Mudge, Rose, Guthrie & Alexander for a while but left the firm to become a technical assistant at the World Bank in Washington, D.C. Professor Levasseur taught at Tulane Law School from 1970 1977 when he joined the LSU Law Faculty. He is a member of the International Academy of Comparative Law, the Société de Législation Comparée, and the Louisiana State Law Institute; he serves on the editorial or advisory boards of the American Journal of Comparative Law, the Revue Internationale de Droit Comparé, the Revue Trimestrielle de Droit Civil, the Revue Générale de Droit, the Foro de Derecho Mercantil, and e- Competitions. He is a member of the Scientific Committee of the Fondation pour le Droit Continental; he is president of the Louisiana Chapter of the Association Henri Capitant and of the International Association of Legal Methodology. He has published extensively in the fields of Comparative Law, Civil Law (Civil Law System/Tradition, Obligations, Contracts, Sale/Lease, etc.), EU/EC Law, and U.S. Law (in French with Dalloz). He has been a regular visiting Professor at the Universities of Aix-Paul Cézanne and Lyon III. He has been honored with two Doctorats Honoris Causa, one from the University of Aix- Marseille Paul Cézanne (1999) and another from the University of Paris-Panthéon Assas (2010). v

Table of Contents Introduction.................................................... 1 Chapter 1 Classification of Contracts (General Principles) LSA-C.C. Arts. 1906 1917...................................... 3 Article 1 Unilateral Contracts and Bilateral or Synallagmatic Contracts LSA- C.C. Arts. 1907 1908.............................. 4 Article 2 Onerous and Gratuitous Contracts LSA-C.C. Arts. 1909 1910. 5 Article 3 Commutative and Aleatory Contracts LSA-C.C. Arts. 1911 1912...................................... 7 Article 4 Principal and Accessory Contracts LSA-C.C. Art. 1913..... 10 Article 5 Nominate and Innominate Contracts LSA-C.C. Arts. 1914-1915-1916................................. 11 Article 6 Implied Kinds of Contracts.......................... 11 1.6.1. Consensual, Solemn, and Real Contracts....................... 12 1.6.2. Mutually Negotiated Contracts and Contracts of Adhesion........... 13 Chapters 2 to 7 Formation of Contracts........................... 15 Chapter 2 Capacity LSA-C.C. Arts. 1918 to 1926................ 17 Article 1 Incapacity of Enjoyment........................... 18 Article 2 Incapacity of Exercise............................. 19 2.2.1. Scope and Effect of Nullity for Incapacity...................... 20 Chapter 3 Consent LSA-C.C. Arts. 1927 to 1947................. 23 Article 1 Existence and Expression of Consent.................. 24 3.1.1. Offer................................................ 24 3.1.2. Acceptance............................................ 28 Article 2 Binding Nature of Offer; Meeting of Minds; Revocation..... 31 Article 3 Offer of a Reward and the Public..................... 31 Chapter 4 Integrity of Consent, Vices of Consent LSA-C.C. Arts. 1948 to 1965......................................... 33 Article 1 Error......................................... 33 4.1.1. Concept of Error........................................ 34 4.1.2. Seriousness of the Error................................... 35 4.1.3. Kinds of Serious Errors: Errors of Fact, Errors of Law, Errors as to the Person............................................... 36 4.1.4. Effect of Error.......................................... 42 Article 2 Fraud......................................... 44 4.2.1. Concept of Fraud........................................ 44 4.2.2. Constitutive Elements of Fraud.............................. 45 4.2.3. Effects of Fraud......................................... 47 vii

Table of Contents Article 3 Duress [Violence]................................ 48 4.3.1. The Constitutive Elements of Duress.......................... 49 4.3.2. Characteristics of Duress: Author-Perpetrator, Reasonableness, Unlawfulness.......................................... 50 4.3.3. Legal Consequences..................................... 51 Article 4 Lesion........................................ 52 Chapter 5 Cause LSA-C.C. Arts. 1966 to 1970.................. 53 Article 1 Brief Historical Survey of Cause.................... 53 5.1.1. Contemporary Theory of Cause and its Legal Regime.............. 55 5.1.2. Legal Regime of Cause................................... 57 Chapter 6 Object and Matter Oof Contracts LSA-C.C. Arts. 1971 to 1977......................................... 63 Article 1 Legal Characteristics or Features of an Object............ 64 6.1.1. Lawfulness of the Object.................................. 64 6.1.2. Determination of the Object: Kind, Quantity, Quality.............. 65 6.1.3. Possibility or Impossibility of the Object....................... 68 Article 2 Promesse De Porte-Fort............................ 69 6.2.1. Promesse De Porte-Fort: Description and Nature................. 70 6.2.2. Effects of a Promesse De Porte-Fort.......................... 71 Chapter 7 Third Party Beneficiary Stipulation Pour Autrui LSA-C.C. Arts. 1978 to 1982............................... 73 Article 1 Notion of a Stipulation for the Benefit of Another.......... 73 Article 2 Conditions for a Valid Stipulation..................... 74 7.2.1. Conditions Pertaining to the Contract Between Stipulator and Promisor.............................................. 75 7.2.2. Conditions Pertaining to the Stipulation Itself.................... 75 Article 3 Effects of a Stipulation for the Benefit of Another.......... 75 7.3.1. Effects Between Stipulator and Promisor....................... 76 7.3.2. Effects Between the Stipulator and the Third Party Beneficiary....... 76 7.3.3. Effects Between the Promisor and the Third Party Beneficiary........ 77 Chapter 8 Effects of Conventional Obligations or Contracts LSA-C.C. Arts. 1983 to 2012............................... 79 Article 1 General Effects of all Contracts: Effect of Law-Good Faith... 79 8.1.1. Effect of Law.......................................... 79 8.1.2. Good Faith............................................ 84 Article 2 Specific Performance and Putting in Default............. 85 8.2.1. Specific Performance..................................... 85 8.2.2. Default; Putting in Default; Effects and Manners................. 86 Article 3 Damages...................................... 89 8.3.1. Stipulated Damages...................................... 90 8.3.2. Court Assessed Damages.................................. 93 viii

Table of Contents Chapter 9 Dissolution LSA-C.C. Arts. 2013 2024 and Nullity LSA-C.C. Arts. 2029 2035................................. 97 Article 1 Dissolution..................................... 97 9.1.1. Grounds for Dissolution................................... 98 9.1.2. Mechanism of Dissolution................................ 101 9.1.3. Effects of Dissolution.................................... 102 Article 2 Nullity....................................... 104 9.2.1. Kinds of Nullity and Extent of Nullity: Absolute and Relative....... 106 9.2.2. Effects of Nullity....................................... 108 Chapter 10 Interpretation of Contracts LSA-C.C. Arts. 2045 to 2057. 113 Article 1 Rules of Interpretation............................ 113 Article 2 Bending the Rules: Interpretation is not Revision......... 115 10.2.1. Bending the Rules...................................... 115 10.2.2. Interpretation is not Revision.............................. 116 Chapter 11 Revocatory and Oblique Actions LSA-C.C. Arts. 2036 to 2044......................................... 119 Article 1 The Revocatory Action........................... 119 11.1.1. Conditions for the Existence of a Revocatory Action.............. 120 11.1.2. Principal Effect of a Revocatory Action: Nullity of the Act......... 121 11.1.3. Revocatory Action and Onerous Contracts..................... 122 11.1.4. Revocatory Action and Gratuitous Contracts................... 124 11.1.5. Exceptions........................................... 124 11.1.6. Additional Requirements and Effects of a Revocatory Action........ 124 Article 2 The Oblique Action.............................. 125 Appendix I Louisiana Civil Code 2015 Title 4 Conventional Obligations or Contracts......................... 129 Appendix II Louisiana Code of Civil Procedure 2015............. 147 Appendix III Cases Illustrations........................... 151 Index........................................................ I-1 ix