gruning sales leases loyola fall 2012

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Sales & Leases – Professor GruningLoyola College of Law – Fall 2012Louisiana Law of Sale and Lease

I. The Nature and Perfection of contracts of sale

a. Distinguishing contracts from othersII. Perfection of Sale

a. Price i. Left to 3rd parties

ii. No price fixed by partiesiii. Lesion beyond moiety

b. Thing i. Hope v. future

ii. Things in commerceiii. Things that cannot be sold

1. Things of another2. Litigious rights3. Litigious redemption

c. Consent i. Implied and express consent

1. BenglishIII. Form

a. Movables b. Immovablesc. Sufficiency of description d. Mandate and other ancillary contracts

IV. Agreements Preparatory to the Salea. Unilateral Promises to Sell

i. The optionii. Right of First Refusal

iii. Special prescriptive periods for options, rights of first refusal and rights of redemption

b. Bilateral Promises to Selli. Earnest Money v, Deposit

ii. Destruction of thingiii. Implied warranty of

merchantabilityV. Transfer of Title and Risk

a. Appropriation or individualization b. Transfer of riskc. Things in transit

VI. Sales Subject to Conditionsa. Inspection by the buyer v. view and trialb. Other implicit resolutory conditions c. Common law “conditional sales”d. The bond for deed contract

VII. Effect of sale on third partya. Movables and the Bona Fide Purchaser

Doctrinei. Lost or stolen things

ii. Registered movablesb. Immovables: The Public Records

DoctrineVIII. Seller’s Obligation of Delivery and Warranty

Against Evictiona. Delivery of the thingb. Warranty against eviction

IX. Sellers Obligation for Redhibition, Fitness, and Thing not of Kind

a. Limitations on redhibition: Seller’s right to an opportunity to repair

b. Liability of seller for redbihibitory defect: good faith and bad faith

c. Waiver of warrantyd. Subrogation

X. Elements of a Leasea. The Thingb. Rentc. Consentd. Term

i. Fixed termii. Indeterminate term

1. ReconductionXI. Obligations of the Lessor

a. Deliver the thing to the lesseeb. Maintain the thing in a condition

suitable for the purpose of which it was leased

c. Warrant the thing against vices/defectsd. Protect lessee’s peaceful possession

XII. Obligations and rights of Lesseea. Pay the rentb. Use thing as a prudent administrator &

in accordance w/ purpose which leasedc. Return thing in condition leased, except

for normal wear and teard. Removal of improvements/additionse. Right to make repairs if lessor fails and

right to reimbursement for cost

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I. The Nature and Perfection of the Contract of Salea. What Law Applies:

i. Civil Code v. The Convention of the International Sale of Goods (CISG)1. If 1) the sale is of a good, and 2) while one party’s place of business is in Louisiana, the

other party is in some other country that has ratified the CISG, then the CISG applies, rather than the code

b. Distinguishing Sales from Other Contracts1. Article 2439. Definition.

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

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

c. Either a synallagmatic or commutative contract2. Article 2025. Definition; simulation and counterletter

a. A contract is a simulation when, by mutual agreement, it does not express the true intent of the parties.

b. If the true intent of the parties is expressed in a separate writing, that writing is a counterletter

3. Hunt v. Suares, 1836 [marble mantle destroyed in fire; contract for sale or construction?]a. Holding: TC reversed; Principal contract was one of sale of the mantle pieces

ready-made, and as soon as they were delivered, they were risk of purchaser; 4. Henson v. Gonzalez, 1976 [build jewelry cases; construction or sales contract?]

a. Holding: TC affirmed; in this case, negotiations are completed prior to the commencement of construction, the obligation is governed by the articles on building contracts rather than sales. In building or construction contracts, substantial performance is the standard rule for determining if the contractor is entitled to recover for contract price. Factors for substantial performance: extent of defect or nonperformance, degree to which the purpose of the contract is defeated, ease of correction, and use or benefit to the defendant of the work performed

ii. Sale Distinguished from a Lease 1. Lease with the option to purchase -> at the end of the lease, must pay additional $2. Conditional sale -> at the end of the lease term, lessee can buy w/o paying additional

money at the end3. Why would seller/lessor want to disguise a lease as a sale?

a. So seller/lessor can get the $, in LA ownership is transferred upon agreement, not upon receiving the $

b. Lessors can evict in a streamlined process in LAc. If you are a seller, you don’t get the $, have to file an ordinary action

4. Byrd v. Cooper, 1928 [13 mules; once paid all notes, could buy for no other consideration; contract for sale or a contract for lease w/ condition to buy?]

a. Holding: D retains ownership, title vested in buyer from the very inception of the contract; sale disguised as a lease; When a party is to become the owner of the thing at the end of the payment period, for no consideration, this is merely a sale with payment terms. If a lease, seller can take the mules back. If it’s a sale, the seller can’t get it back.

b. Test: Look at the total cost of the “rent” compared to the true value of the mules. If rent = real value, it looks like a price

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iii. Sale Distinguished from Security Device (Pledge and Mortgage)1. Nature and requirements of security devices

a. Personal security: suretyshipb. Real security: pledge and mortgagec. Mortgage: “Mortgage is a nonpossessory right created over property to secure

the performance of an obligation.”i. Rights created by the mortgage: Mortgage gives the mortgagee, upon

failure of the obligor to perform the obligation that the mortgage secures, the right to cause the property to be seized and sold in the manner provided by law and to have the proceeds applied toward the satisfaction of the obligation in preference to claims of others. (like a foreclosure)

d. Pledge: The pledge is a contract by which one debtor gives something to his creditor as a security for his debt. (3133, 3134)

i. The thing is physical turned over to the bankii. Movable=pawn; immovable=antichresis

2. Significance of distinction from sale a. Why make it like a sale rather than a mortgage?

i. Borrower looks like a seller and the bank looks like buyer: this allows the bank to grab it. They are immediately the owner. Great procedural consequences: eviction v. foreclosure.

b. Whether ownership has been transferred1. Collins v. Pellerin, 1850 [hydraulic presses; security or right of redemption?]

c. Holding: TC affirmed; holds that the contract was not one of sale with power of redemption, but merely a security device

iv. Limitations on Capacity1. Article 1918. General Statement of Capacity. All persons have capacity to contract,

except unemancipated minors, interdicts, and persons deprived of reason at the time of contracting.

2. Article 1919. Right to Plead Rescission. A contract made by a person w/o legal capacity is relatively null and may be rescinded only at the request of that person or his legal representative

3. Article 1921. Rescission of contract for incapacity. Upon rescission of a contract on the ground of incapacity, each party or his legal representative shall restore to the other party what he has received thereunder. When restoration is impossible or impracticable, the court may award compensation to the party to whom restoration cannot be made.

4. Additions to the general rule of capacity: officers of a court may not buy litigious rights subject to contestation in the jurisdiction where they perform their professional duties (Art. 2447), nor may a person buy a thing he already owns (Art. 2443), or sell to a third party something that belongs to another (unless authorized) (Art. 2452). One spouse cannot sell or otherwise alienate immovable property owned by the community – consent of both spouses required (Art. 2346-47)

5. Article 394. Pre-interdiction juridical acts. Interdiction does not affect the validity of a juridical act made by the interdict prior to the effective date of interdiction

6. Julius Cohen Jeweler, Inc. v. Succession of Jumonville 1987 [interdicted bought a lot of jewelry]

a. Holding: The attacking party has the burden of proving (1) that the alleged incompetent was deprived of reason at the time of the contracting, and (2) that the other party knew or should have know of his incapacity. No evidence that D was “notoriously” insane, or that P knew or should have known that D was incapable of contracting.

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7. Banks v. Hyde, 1840 [public auction; TP acting at P’s request; buy something already owns?]

a. Holding: A person is not capable of purchasing something he already owns, as the P tried to do.

8. Boudreaux v. St. Farm Mut. Automobile Ins. Co., 1980 [P’s son buys car, gets in fatal wreck; sale to son absolutely null?]

a. Holding: A contract entered into by a minor is not an absolute nullity but rather a relative nullity (art. 1919). The sale b/t son and Aucoin was valid but voidable. The father had authority to either confirm or annul the contract on behalf of his minor son. Court finds that father left no doubt that his intent was to disaffirm the contract.

II. Consenta. Art. 1927 Consent (ways to consent)

i. A contract is formed by the consent of the parties established through offer and acceptance.ii. Unless the law prescribes a certain formality for the intended contract, offer and acceptance may

be made orally, in writing, or by action or inaction that under the circumstances is clearly indicative of consent.

iii. Unless otherwise specified in the offer, there need not be conformity between the manner in which the offer is made and the manner in which the acceptance is made.

III. Perfection of Sale – Pricea. Price as Distinguishing Sale from other kinds of Contracts

i. Art. 2464. Price, essential elements1. The price must be fixed by the parties in a sum either certain or determinable through a

method agreed by them. There is no sale unless the parties intended that a price be paid.2. The price must not be out of all proportion with the value of the thing sold. Thus, the

sale of a plantation for a dollar is not a sale, though it may be a donation in disguise.ii. Art. 2465. Price left to determination by third person

1. The price may be left to the determination of a third person. If the parties fail to agree on or to appoint such a person, or if the one appointed is unable or unwilling to make a determination, the price may be determined by the court.

iii. Art. 2466. No price fixed by the parties1. When the thing sold is a movable of the kind that the seller habitually sells and the parties

said nothing about the price, or left it to be agreed later and they fail to agree, the price is a reasonable price at the time and place of delivery. If there is an exchange or market for such things, the quotations or price lists of the place of delivery or, in their absence, those of the nearest market, are a basis for the determination of a reasonable price.

2. Nevertheless, if the parties intend not to be bound unless a price be agreed on, there is no contract without such an agreement.

3. Per Guning – art 2466 is the edge which we are willing to bind someone to a contract when a price is not intended

b. Price as Distinguishing Sale from Other Kinds of Contractsi. Hearsey v. Craig, 1910 [real estate for services, grandchildren want to cancel;

1. Holding: to be a remunerative and an onerous donation, is not affected by the failure of the parties to estimate or fix in exact terms the value of the real estate conveyed or services rendered; needs price for sale, not so with donation

c. Price Provisions as Suppletive Law; GAP FILLERS i. Art. 2465. Price Left to Determination by Third Person; suppletive gap fillers only apply so

someone doesn’t get screwed

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ii. Benglis Sash & Door Co. v. A.P. Leonards, 1980 [window’s ordered per prior dealings; did parties agreed on price?]

1. Holding: Court holds that consent of the parties to buy and sell the specific item at a reasonable price may be implied from the circumstances of this case and that the contract was perfected before P ordered the windows from manufacture.

iii. Louis Werner Sawmill Co. v. O’Shee, 1904 [P & D agree that estimators should agree on the price of timber for sale; such sale valid?]

1. Holding: no contract exists due to the volatility of the estimators and lack of agreement; fixing of price by estimators is suspensive condition, which was never perfected, therefore, no contract was complete

2. Would the same result be reached today? a. The answer is unknown, but Art. 1974 seems to indicate so. Seems to be written

for this very purpose, as Louis Sawmill v. O’Shee is cited in the Revision Comments.

iv. Landeche Bros. Co. v. New Orleans Coffee Co., 1931 [sell coffee between market price (.15-.30$)1. Holding: Affirmed. Contract evidences that P did not bargain to sell nor the D to buy

syrup except on condition that the market price of sugar ranged from $.15 to $.30 per pound.

d. Lesionary Price and Rescission for Lesion Beyond Moiety i. Per Gruning – the law will give a remedy for lesion even if the seller knows the value of the

immovable he is selling is ½ of fair market value1. Land rich, cash poor, take it or leave it, takes it, seller will still get lesion 2. Does not protect seller, if price of property skyrockets

ii. Generally –A claim for rescission for lesion is extremely limited; it applies only to the sale of a corporeal immovable, only to the seller, only if the seller receives less than ½ the value of the immovable, and only for one year after the date of the sale.

iii. Article 2589: Rescission for lesion beyond moiety1. The sale of an immovable may be rescinded for lesion when the price is less than one half

of the fair market value of the immovable. Lesion can be claimed only by the seller and only in sales of corporeal immovables. It cannot be alleged in a sale made by order of the court.

2. The seller may invoke lesion even if he has renounced the right to claim it.3. Revision Comments:

a. Under this article, the valuation cannot be based on conjecture, possibility or speculation.

iv. Article 2590: Time of valuation for determination of lesion1. To determine whether there is lesion, the immovable sold must be evaluated according to

the state in which it was at the time of the sale. If the sale was preceded by an option contract, or by a contract to sell, the property must be evaluated in the state in which it was at the time of that contract.

v. Article 2591: Option of buyer to supplement.1. When a sale is subject to rescission for lesion, the buyer may elect either to return the

immovable to the seller, or to keep the immovable by giving to the seller a supplement equal to the difference between the price paid by the buyer and the fair market value of the immovable determined according to the preceding Article.

vi. Article 2592: Lesion, return of fruits by buyer and payment of interest by seller1. If the buyer elects to return the immovable he must also return to the seller the fruits of

the immovable from the time a demand for rescission was made. In such a case, the seller must return to the buyer the price with interest from the same time.

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2. If the buyer elects to keep the immovable he must also pay to the seller interest on the supplement from the time a demand for rescission was made.

vii. Article 2594: Lesion, action against vendee who has resold the immovable1. When the buyer has sold the immovable, the seller may not bring an action for lesion

against a third person who bought the immovable from the original buyer.2. In such a case the seller may recover from the original buyer whatever profit the latter

realized from the sale to the third person. That recovery may not exceed the supplement the seller would have recovered if the original buyer had chosen to keep the immovable.

viii. Article 2595: Preemption of action for lesions1. The action for lesion must be brought within a peremptive period of one year from the

time of the sale.ix. Joiner v. Abercrombie, 2007 [D flips property a month after sale for +$200k, plus “timber

management fee]1. Holding: the property in question was ideally located and in an area with a burgeoning

residential market, its highest and best use was residential, was clear error. As such, LA civil code does not allow seller to recover from third party, but it allows the seller to recover from the original buyer whatever profit the latter realized from the sale to the third person. In this case, P is owed $190k.

x. Saizan v. Century 21 Gold Key Reaity, 19841. Holding: Cannot be rescinded on account of lesion b/c exchange fails to invoke the

application of either exception, i.e. Art 2666 and 2665; Art. 2665 is not applicable b/c the exchange was not immovable for movable property, but immovable for immovable. Art. 2666 is not meet b/c the party who does not pay the balance does not have an action for lesion.

Perfection of Sale – The Thing Sold

I. Perfection of Sale – The Thing Solda. Generally – A sale must include a lawful, possible, determined, or determinable thing as the object of the

sale. All things corporeal and incorporeal, susceptible of ownership, may be the object of a contract of sale, unless the sale of a particular thing is prohibited by law, Art. 2448

b. Article 2448. Things that may be soldi. All things corporeal or incorporeal, susceptible of ownership, may be the object of a contract of

sale, unless the sale of a particular thing is prohibited by law. c. Article 2450. Sale of future things

i. A future thing may be the object of a contract of sale. In such a case the coming into existence of the thing is a condition that suspends the effects of the sale.

ii. A party who, through his fault, prevents the coming into existence of the thing is liable for damages.

d. Article 2451. Sale of a hopei. A hope may be the object of a contract of sale. Thus, a fisherman who may sell a haul of his net

before he throws it. In that case, the buyer is entitled to whatever is caught in the net, according to the parties’ expectations, and even if nothing is caught the sale is valid.

ii. The sale of a hope is an aleatory contract. iii. In Lossecco v. Gregory, the court concluded that the sale of future crops where the buyer assumed

all risks was the sale of the hope.e. Article 2452. Sale of the thing of another

i. The sale of a thing belonging to another does not convey ownership f. Article 2453. Sale of thing pending litigation of ownership

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i. When the ownership of a thing is the subject of litigation, the sale of that thing during the pendency of the suit does not affect the claimant's rights. Where the thing is immovable, the rights of third persons are governed by the laws of registry.

II. Sale of a Hope versus Sale of a Future Thinga. Losecco v. Gregory, 1901 [frozen oranges]

i. Holding: 2. 2nd Hearing: Held for D; ordered $4k returned; the parties did not contemplate the risk of

the crop freezing, the sale was of the crops themselves, the legal situation is that the vendor warranted the continued existence of the grove during the time required for the production of the crops, and that he is relived of this warranty only to the extent that the purchaser assumed the risk of the loss of the crop

3. 3rd Hearing: Held entirely for D, and ordered the buyer to pay the balance of the price, an additional $4k; ruling relies almost entirely on one sentence of the contract, future tense “all the oranges my trees shall bear

b. Plaqumines Equipment & Mach. Co. v. Ford Motor Co., 1963 [Truck to be modified and balance due on delivery]

i. Holding: As with a Sale for a Future thing, such a contract is not immediately translative of the ownership of the property. If the thing sold has not come into existence, as in the instant case, the concurrence is lacking. Article 2456 provides for the vesting of title in the purchaser by operation of the law prior to actual delivery. For the transfer of title to be operative under the Article, the object of the contract must exist in a deliverable state. The law does not presume to pass title to anything other than the object of the contract.

ii. Per Gruning – this is not a suspensive condition, as it is the will of the parties, this is a sale of a future thing

III. Things in Commercea. The recognition that commerce - i.e. trade – increases the wealth of a nation led to a public policy

encouraging sales and discouraging perpetual ownership, particularly of immovables, both common law and civilian jurisdictions.

b. Hicks v. Clark, 1954 [1/4 mineral interest; acquisitive prescription & revisionary interest]i. Holding: Court holds that the reservation of the reversionary interest as an attempt to circumvent

public policy, and the court refuses to give effect to the contract for reversionary rights. The sale of reservation of a mineral servitude is not a sale of hope. Predial servitudes are extinguished after liberative prescription of 10 years, while a revisionary interest, a future interest in the possibility that the servitude holder allows servitude to lapse is not transferable, against PP

ii. Per Guning – Hicks wants to sell the revisionary rights to Red Chute in hope that Raines’ ¼ interest prescribes for non-use.

IV. Things that may NOT be Solda. Things of Another, Art. 2452

i. The sale of a thing belonging to another does not convey ownership, Art. 2452 and a seller who purports to sell a thing he does not own is liable for damages, Art, 2452

ii. Often the owner of the object can only receive damages, because the third-party purchaser is protected by the bona fide purchaser doctrine or the public records doctrine

b. Litigious Rightsi. Art. 2447. Sale of Litigious rights, prohibitions

1. Officers of a court, such as judges, attorney’s, clerks, and law enforcement agent’s, cannot purchase litigious rights under contestation in the jurisdiction of that court. The purchase of a litigious right by such an officer is null and makes the purchaser liable for all costs, interest, and damages

ii. Art. 2653. Assignability Prohibited by Contract; Exceptions

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1. A right cannot be assigned when the contract from which it arises prohibits the assignment of that right, Such a prohibition has no effect against an assignee who has no knowledge of its existence.

iii. McClung v. Atlas Oil Co., 1921 [Long to have free power to sue on behalf of McClung]1. Holding: There was no suit pending when Long acquired his interest in the mineral

rights, and while it is true that the consideration which he agreed to give was his professional services in such actions as he might deem necessary to obtain judgment in favor of McClung therefor, yet, this could not have the effect of supplying the condition which the Code requires, i.e. the pending suit.

c. Litigious Redemptioni. Art. 2652. Sale of Litigious Rights

1. When a litigious right is assigned, the debtor may extinguish his obligation by paying to the assignee the price the assignee paid for the assignment, w/ interest from the time of the assignment.

2. A right is litigious, for that purpose, when it is contested in a suit already filed3. Nevertheless, the debtor may not thus extinguish his obligation when the assignment has

been made to a co-owner of the assigned right, or to a possessor of the thing subject to the litigious right.

ii. Luk-Shop, L.L.C. v. Riverwood LaPlace Assocs. L.L.C., 2002 [buying debt and assigning rights]1. Holding: SC finds error in TC holding b/c the facts indicate that the assignment from

CFSC to Luk-Shop was the sale of a litigious right pursuant to Art. 2652.2 2. that obligation is extinguished, the state court sequestration and claim on the debt fall.

iii. Martin Energy Co. v. Bourne, 1992 [sale of a judgment for $10, plus other valuable consideration]

1. Holding: TC affirmed because evidence shows the real price paid for the right was $102. Reasoning: Art. 2653, for the purposes of litigious redemption, there must exist a suit

and contestation of the same. Prior to the rendition of judgment, an exception pleading the objection of litigious redemption was filed by Borne, thus it is clear 2653 was meet. Art. 2652 provides, he against whom a litigious right has been transferred, may get himself released by paying to the transferee the real price of the transfer, together with the interest from its date. Martin filed the exception pleading litigious redemption timely, shortly after pre-trial conference, and before the litigation had advanced significantly. The contract stipulated that the consideration for the transfer for the rights was “$10 and other valuable services,” and the court finds that Martin was unable to show that it performed any “valuable services” along with the $10, therefore the court finds that the real price paid for the transfer of the litigious rights was $10.00

The Form of the Contract of Sale

I. Movablesa. Art. 1846. Contract not in excess of five hundred dollars

i. 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.

ii. 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.

b. Art. 1848. Testimonial or other evidence not admitted to disprove a writing; Parol Evidence Rulei. 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.

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ii. Per Gruning:1. Parol Evidence2. 4 corners3. Simulations4. Counter-letter5. Integrated and partially integrated

iii. Gruning Notes:1. The Louisiana supreme court generally recognizes that the parol evidence rule excludes

only oral testimony and does not extend to extrinsic writings2. The Louisiana supreme court allows use of parol evidence to aid in the interpretation of a

written agreement, usually when an ambiguity in the writing requires resolution, because the evidence is consistent with the agreement and not offered for the purposes of altering, contradicting, varying, enlarging, or restricting.

c. Joyner v. Liprie (ORAL Contract) [Dr.’s fighting over patent; oral agreement enforceable?]i. Holding: there exists a reasonable factual basis in the record on which the jury could have

concluded that the three men reached an oral agreement, either in the Atlanta meeting, or surrounding the time of the two “letters of intent.” Contracts for large amounts of money will be enforced, even if not written, as long as the one alleging the contract proves its existence with at least one witness and corroborating evidence. Nevertheless, even if no particular form is required, if the parties choose to write out their agreement, then the parol evidence rule set forth in Art. 1848 comes into play.

d. Jeanfreau v. Jeanfreau, 1935 [Alice D boat sold, brother fighting; can parol evidence be introduced to establish ownership of boat?]

i. Holding: Yes, parol evidence may be introduced to prove Louis is owner of boat. Unlike immovables, the ownership of movables may be established by the corroborating testimony of one witness.

II. Immovablesa. Per Gruning:

i. An authentic at is required for the donation inter vivos of an immovables but is NOT required for a valid sale of an immovables. Thus, a sale of an immovable is effective as between the parties even if it is simply written on a paper napkin.

ii. There are two exceptions to this writing requirement: 1. First, parol testimony may be accepted if the written instrument was destroyed, lost, or

stolen2. Second, if there never was a written instrument, then the transfer is effective if there was

actual delivery and the transferor acknowledges the transfer under oath.b. Art. 2440. Sale of immovable, method of making

i. A sale or promise of sale of an immovable must be made by authentic act or by act under private signature, except as provided in Article 1839.

c. Act under private signature – just a signed writing by the partiesd. Act under private signature duly acknowledged – signature on document which claims to verify the act

under private signature, and the duly authorized act is notorized e. Art. 1839. Transfer of immovable property

i. 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.

ii. 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.

f. Art. 1832. Written form required by lawi. 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 been destroyed, lost, or stolen.

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g. Art. 1833. Authentic acti. An authentic act is a writing executed before a notary public or other officer authorized to

perform that function, in the presence of two witnesses, and signed by each party who executed it, by each witness, and by each notary public before whom it was executed. The typed or hand-printed name of each person shall be placed in a legible form immediately beneath the signature of each person signing the act.

ii. To be an authentic act, the writing need not be executed at one time or place, or before the same notary public or in the presence of the same witnesses, provided that each party who executes it does so before a notary public or other officer authorized to perform that function, and in the presence of two witnesses and each party, each witness, and each notary public signs it. The failure to include the typed or hand-printed name of each person signing the act shall not affect the validity or authenticity of the act.

iii. If a party is unable or does not know how to sign his name, the notary public must cause him to affix his mark to the writing.

h. Art. 1834. Act that fails to be authentici. 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.i. Art. 1837. Act under private signature

i. An act under private signature need not be written by the parties, but must be signed by them.j. Pierce v. Griffin, 1957 [contract written on four stakes; should parol evidence be admitted to prove the

existence of destroyed contract?]i. Holding: TC affirmed. The court held that such a writing was adequate although it was not upon

paper or parchment because it sufficiently proved conveyance of the title, which was corroborated by other evidence including the purported buyer's own testimony and that of disinterested witnesses. Parol evidence of the writing was properly admitted under La. Civ. Code Ann. art. 2279, as the article did not bar a party from proving the content of a writing that was burned without realizing the effect of such action.

k. Mitchell v. Clark, 1984 [aunt put property in nephews name, nephew moves in, aunt wants clerk to change conveyance records to get nephew out; parol evidence admitted to prove ownership of immovable?]

i. Holding: Court cannot give relief to the P w/o abrogating the consistent rule of property that excludes parol evidence to prove that one not named in the deed is the real vendee. The TC should not have permitted the oral or testimonial proof of any facts relating to the land purchase b/c this litigation concerns the ownership of an immovable whose sale was effected by a written act. Both lower courts were correct in determining that Mitchell’s gift was not in proper form to have its desired effect.

ii. Per Gruning - It lacked the formality of a donation of an immovable inter vivos, and was the reprobated donation causa mortis not honored under Louisiana law

l. Frank v. Motwani, 1987 [mutual consent to cancel contract]i. Holding: Court concludes that a writing is not required to cancel a contract which has to be in

writing to be valid. CA erred in affirming the summary judgment.ii. Lemmon Concurrence: In the case of a later contract which extinguishes a previous contract to

sell immovable property, the later contract (extinguishing the obligation) need not be in writing b/c it does not constitute an agreement to sell immovable property.

m. Gruning Note:i. The previous cases discuss when the parol evidence rule excludes oral testimony concerning the

purported sale of an immovable, and provide two instances when it does not:1. If the oral testimony establishes the previous existence of a writing2. If the oral testimony is being used to establish that a contract to sell was extinguished,

(i.e. “the written act was modified by a subsequent and valid oral agreement, Art. 1848)

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n. Mathews v. Mathews (Simulations, donations in disguise, authentic act) [two brothers fight over mother’s tract of land]

i. Holding: Court finds that Emmett did not sustain his burden of proof of proving that he and his mother intended a relative simulation or disguised donation by the 1996 sale.This supposed disguised donation, as claimed by Emmett, would be a relative simulation, which by definition would require a showing of the “mutual agreement” b/t his mother and himself. Their transaction, which our law requires in writing to transfer the immovable, and, more importantly, as an authentic act to insure the proper written of the donative intent, should not be recognized as a donation of this immovable under these extrinsic circumstances which did not show mutuality of the parties’ intentions.

o. Simulationi. Art. 2025. Simulation A contract is a simulation when, by mutual agreement it does not express

the true intent of the parties. If the true intent of the parties is expressed in a separate writing, that writing is a counter-letter. A simulation can be a feigned or pretend sale clothed in the formalities of a valid sale.

ii. Ex: A person who is about to leave on a long trip is in need of somebody to take care of his affairs while he is absent. Instead of giving a power of attorney to a friend or agent that this purpose, he makes a “simulated” sale of this property to the friend or agent for him to act freely as owner, and they also execute a second act whereby it is clearly stated that the first party is the real owner, called a counter-letter.

iii. Per Guning – how to give property to a mistress:1. Dress up a donation in the clothes of a sale; relative simulation, it WILL transfer

ownership 2. Must show grantor’s donative intent3. If dressed up as sale, to be valid, it must be an authentic act, generally it will be found

validiv. Two types of simulations

1. Art. 2026 Absolute simulation – a simulation is absolute when the parties intend that their contract produce no effects between them. That simulation, therefore, can have no effects between the parties

2. Art. 2027 Relative simulation – a simulation is relative where the parties intend that their contract produce effects between them which are different from those recited in their contract. A relative simulation produces between the parties the effects they intended if all requirements for those effects have been meet

a. i.e. authentic act for a donation, etc. p. Disguised Donation – A deed stating nominal consideration in authentic form, nevertheless, is invalid as

a disguised donation, unless evidence establishes grantor’s donative intent., see Nofsinger v. Hinchee. Likewise, if donative intent can be proven with extrinsic evidence, and the act is authentic, will generally be found valid, see Wood v. Martin

q. Sufficiency of Descriptioni. Per Gruning – omnibus description – if there is a mortgage involved, an omnibus description is a

problem; an omnibus description is not enough to put a third party on notice ii. Per Gruning – the buyer is at risk b/c if seller sells later w/ more detailed description. And 3rd

party is in on the fraud, there is a problem because the omnibus description is vulnerable; it is good against another, but not good against the world

iii. Lemoine v. Lacour [oral contract, P has 9 receipts for paid installments1. Holding: CA reversed, to allow P to supplement his pleadings so as to state a cause of

action, allowing P to interrogate D. The buyer should have been granted permission to supplement his pleadings and to interrogate the sellers on oath regarding the verbal sale, pursuant to the provisions of La. Civ. Code art. 1839

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2. Per Gruning – if merely an ambiguity in description, parol evidence will be allowed to remedy the ambiguity or defective description

r. Mandate and other Ancillary Contractsi. Art. 2993. Form

1. The contract of mandate is not required to be in any particular form.2. Nevertheless, when the law prescribes a certain form for an act, a mandate authorizing

the act must be in that form.ii. Generally – Not only must the sale of an immovable be in writing, so must any ancillary contract

that relates to the sale of an immovable, such as a contract to sell in Art. 2623, an option in Art. 2620, a right of first refusal in Art. 2625

iii. Per Gruning – because donations must be by authentic act, a mandate authorizing a mandatory to make a donation must also be by authentic act

iv. Form and “Equal Dignity” – whenever the extrinsic law demands that an act be in a certain form, the authority of a mandate to consummate that act for this principal must be in the same form.

v. Triangle Farms, Inc. v. Harvey [D claims holding property for third party, mandate situation1. Holding: The court held that the agent did not have a written contract with the seller,

that parol evidence was not admissible under La. Civ. Code Ann. art. 2992 to establish an agency to sell land, and that the buyer could not establish title to the land by parol evidence of the agent's authority to sell the land. The court held, however, that parol evidence was admissible to show that the seller received the purchase price.

Agreements Preparatory to the Sale

I. Unilateral Promises to Sella. The Option

i. Art. 2620. Option - Provides that an option to buy, or an option to sell, is a contract whereby a party gives to another the right to accept an offer to sell, or to buy, a thing w/n a stipulated time. An option must be set forth the thing and the price , and meet the formal requirements of the sale it contemplates.” Thus, if it relates to the sale of an immovable, it must be in writing. It can be assigned or inherited, or enforced by specific performance.

ii. An option must set forth the thing and the price, and meet the formal requirements of the sale it contemplates.

1. Power lies within the Grantee 2. This is a contract and must have all the elements of such, COCC.3. Does need to set forth all the requirements of the underlying offer to be accepted.

iii. Art. 2621. Acceptance, when effective; option turns into contract to sell; rejection (option contract)

1. The acceptance or rejection of an offer contained in an option is effective when received by the grantor. Upon such an acceptance the parties are bound by a contract to sell.

2. Rejection of the offer contained in an option terminates the option but a counteroffer does not.

iv. Becker & Assoc., Inc. v. Lou-Ark Eqpt. Rentals Co., Inc., 1976 [lessee of heavy equipment, lease grants lessee option to purchase crane w/ 99% of rental applied to purchase price]

1. Holding: The option agreement set forth no time limit within which the offer had to be accepted. Under La. Civ. Code Ann. art. 2686, the lease was presumed to continue from month to month. That meant the original lease was continued each month until canceled. As there were no provisions in either the lease or the option itself limiting its duration, the option was null and void for failure to stipulate a time period for the acceptance of the promise to sell.

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b. The Right of First Refusali. Generally – A party may agree that he will not sell a certain thing w/o first offering it to a certain

person. The right given to the latter is such a case is a right of first refusal that may be enforced by specific performance. In contrast with an option to buy or sell, which must set forth the thing, the price, and meet the formal requirements of the sale contemplated, a right of first refusal must indicate the thing and the satisfy the requirements of form, but it need not state the price.

ii. Art. 2626 – the grantor of a right of first refusal may not sell to another person unless he has offered the thing to the holder of the right on the same terms, or on those specified when the right was granted if the parties have so agreed,

iii. Art. 2627. Right of first refusal, time for acceptance1. A right of first refusal must be accepted within:

a. Ten days from the time it is received if the thing is movable b. Thirty days from that time if the thing is immovable, c. Unless otherwise agreed.

2. The right of first refusal subsists in the grantee who failed to exercise it when an offer was made to him, unless the grantor concludes a final sale, or a contract to sell, with a third person within six months.

iv. Art. 2628 – An option must have a specified period of time, but a right of first refusal need not, though both may remain effective for a maximum of 10 years if the thing is an immovable.

v. Art. 2568 – right of redemption for a movable to a maximum of five yearsvi. The right given to the latter in such a case is a right of first refusal that may be enforced by

specific performance.1. Power lies within the Grantor 2. This is a contract and must have all the elements of such, COCC.3. Seller of only offering or promising to sell the thing.4. “Only if I Decide to Sell”

vii. Jones v. Hospital Corp. of America, 1987 [Dr. claims he was given 1st right of refusal; does it have to be in writing?]

1. Holding: The court found that the doctor had acknowledged that the transfer of immovable property had to be in writing, pursuant to Art. 1832, 1839, and 2240 and he did not justifiably rely on any unwritten representation. The right of first refusal is a type of contract to sell. Such a contract must be in writing to be enforceable; therefore estoppel will obviously not like to prove the first right of refusal.

viii. Pelican Publ’g Co. v. Wilson, 1993 [publisher to get “next work” in contract; what must be included in 1st right of refusal?]

1. Holding: two clauses lack specificity for their enforcement. An option is an elective right that, when exercised, ripens into a binding contract therefore it must be specific as to the thing, price, and the terms. In this case, the supposed option clause is void of any mention of price.

ix. Travis v. Heirs of Felker, 1985 (Right of redemption) [seller could repurchase property if sister ever sold it]

1. Holding: clause did not give the seller the unqualified right to demand the return of the property, it was a first refusal, and under art. 2462, the agreement was actually an option, and no prescriptive period applied. SC has held that the right of first refusal is enforceable as an option under Art. 2462 despite arguments that it states no specific time and contrary to public policy b/c its perpetual option. “if ever sold”

2. Per Gruning – the function of a right of redemption is essentially a loan, with power to get it back after the party has raised requisite money

3. Per Gruning – here, it was the other way around. It was the buyer that needed money, not the seller; idea here was to allow the sister to use the land as collateral for a loan; this

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could be an onerous donation, b/c there is a charge placed on the transferee by having to offer to the transferor the right to repurchase

x. Youngblood v. Rosedale Dev. Co., L.L.C. [three-year extension options triggered by developer; in violation of 10 year maximum?]

1. Holding: The appellate court determined that an exception listed in La. Civ. Code Ann. art. 2628 was inapplicable. However, option in favor of D is valid for a term of 10 years, and does not expire before the attempted purchase of additional property. The option had the effect of being perpetual and indefinite.

2. Per Gruning – if you want to protect the option here, include in the contract that the property must not just be purchased, it must also be developed.

II. Bilateral Promise to Sella. Art. 2623. Bilateral promise of sale; contract to sell

i. An agreement whereby one party promises to sell and the other promises to buy a thing at a later time, or upon the happening of a condition, or upon performance of some obligation by either party, is a bilateral promise of sale or contract to sell.

1. Such an agreement gives either party the right to demand specific performance.b. A contract to sell must set forth the thing and the price, and meet the formal requirements of the sale it

contemplates.i. This is a suspensive condition

ii. Is not enforceable until the existence of that condition iii. This promise can be binding if the purpose of the promise is to protect the interest of a third party

debtor, the promise becomes binding when he borrows money. c. Rules Particular to a Bilateral Promise to Sell:

i. Instances where the buyer puts up money to secure the promise (earnest or deposit)ii. Where the thing is destroyed before the actual sale

iii. The seller implied warranty of merchantabilityd. Damages – a party may demand specific performance, however, LA courts generally prefer to award

damages over specific performancee. Unilateral – when a promise is unilateral, as with a right of first refusal or an option, the contract is

enforceable as soon as the promisee makes his choice. Only one party has an obligation f. Bilateral – a bilateral promise, the existence of the final contract depends on some condition – which

means that a bilateral promise to sell may or may not itself be enforceable.g. Peck v. Bemiss, 1855 [P claimed title under instrument dated 1847, D claimed ownership as she was in

open possession since 1846]i. Holding: Construing the instrument in the most liberal sense possible, the court found that it was

nothing more than a reciprocal promise of sale under which the agent for the grantor agreed to sell the land to plaintiff at a future time. The court also found that the agent had no authority to sign deeds of sale.

h. Thomas v. Pace (vitiated cause can invalidate a purchase agreement)i. Holding: he court affirmed the decision of the trial court as to the return of the deposit, but

reversed the decision as to the payment of attorney's fees.ii. Reasoning: court ruled that the buyers met their burden of proving that the flooding of the

property constituted an error, which vitiated their consent and therefore invalidated the contract.i. Newman v. Cary, 1985 [1978 Ferrari; parol evidence?]

i. Holding: parties had a binding contract, which the defendants breached. Defendant’s argument violates the parol evidence rule. Neither parol evidence shall be admitted against or beyond what is contained in the acts, nor on what may have been said before, or at the time of making them, or since. Louisiana’s parol evidence rule is not substantive law, but rather a rule of evidence.

III. Earnest Money v. Deposita. Art. 2624. Deposit, Earnest Money – Gruning goes over a lot

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i. A sum given by the buyer to the seller in connection with a contract to sell is regarded to be a deposit on account of the price, unless the parties have expressly provided otherwise.

ii. If the parties stipulate that a sum given by the buyer to the seller is earnest money, either party may recede from the contract, but:

1. The buyer who chooses to recede must forfeit the earnest money,2. The seller who so chooses must return the earnest money plus an equal amount.

iii. When earnest money has been given and a party fails to perform for reasons other than a fortuitous event, that party will be regarded as receding from the contract.

b. Deposit - is money put down in connection with a contract to buy, similar to common law consideration. i. If the sale goes through, the deposit will be deducted from the amount owed at closing

(immovable) ii. If either party breaches, other can sue for specific performance.

c. Earnest Money - The parties agree that the money put down is the cost of canceling the contract to sell, similar to stipulated or liquidated damages.

i. If the sale goes through, the earnest money will be deducted from the amount owed.ii. If the sale does not go through, the contract will be voided with payment and no one is due

specific performance.iii. Per Gruning – the price of getting out of the contract; when the parties intention is that a sum of

$ be given in earnest, they must clearly express that intention; under 2624, you HAVE to say that money is to be earnest $

d. Force Majeure or a Fortuitous Event will dissolve a contract.e. Worley v. Chandler, 2009 [deposit v. earnest money, contract says deposit, etc, the handwriting earnest

money]i. Holding: Jurisprudence has established that when the parties’ intention is that a sum of money

be given as earnest, they must clearly express that intention. Here, there is no clear indication that the $5k was to be given as earnest money. The additional handwritten language, which would prevail over printed portions, failed to indicate that the $5k was to be given as earnest money. Rather, the purchase agreement clearly sates that the deposit shall not be considered as earnest money and this contract shall be considered a specific performance contract.

IV. Destruction of the Thinga. Generally - Must try to perform the contract in Good Faith. If you cannot, then it may be deemed

impossible. b. Art. 2477 – Delivery of an immovable is deemed to take place upon execution of the writing that

transfers its ownership.c. Art. 2489 – the seller must care for and preserve the thing sold as a reasonably prudent administrator, in

accordance with the overriding obligation of good faith.d. Fortuitous Event or Force Majeure - When a fortuitous event has made a party's performance

impossible in part, the court may reduce the other party's counter-performance proportionally, or, according to the circumstances, may declare the contract dissolved. An obligor is not liable for his failure to perform when it is caused by a fortuitous event that makes performance impossible. An obligor is, however, liable for his failure to perform when he has assumed the risk of such a fortuitous event.

e. Payne v. Hurwitz, 2008 [hurricane Katrina, 60 days, extension?]i. Holding: Defendant as seller bore the risk of any damage to the home pending the sale, and had

the legal duty to restore it to its expected condition prior to delivery to the buyers. The nonperformance of a contract is not excused by a fortuitous event where it ay be carried into effect, although not in the manner contemplated by the obligor at the time the contract was entered into. Defendant must pursue reasonable alternatives to render performance in a different manner before he can take advantage of the defense of impossibility. Defendant could have certainly rendered performance in a different manner, that is, at a later time based upon a mutual written extension of the closing deadline. Also, putting the obligor in default is not prerequisite to filing suit for specific performance.

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V. Implied Warranty of Merchantabilitya. Generally – Louisiana jurisprudence has long recognized that a prospective buyer who has contracted to

buy an immovable may refuse to complete the purchase if doing so will embroil him in legal difficulties.b. Young v. Stevens, 1967 [D purchase agreement with P, b/4 sale survey disclosed neighbor property

encroached on D’s property & neighbor refused to move; impending lawsuit?]i. Holding: the title in question is not merchantable. Plaintiff would be buying a lawsuit, or he

would have to take less footage that the agreement called for, either condition is a violation of the requirement that he be furnished a merchantable title.

c. Per Gruning – can buy title insurance; successions that were never opened, community property settlements closed properly; curative work needed

I. Transfer of Title and Riska. Title and Risk in General

i. Effects - Two effects of a perfected contract of sale is 1) to transfer the ownership of the thing sold from the seller to the buyer, and 2) is to transfer the risk of loss of the thing from the buyer to the seller.

ii. Seller’s obligations – deliver the thing to the buyer, to warrant the buyer against eviction and to warrant the buyer against redhibitory effects in the thing sold.

iii. Buyer’s obligations – he is under the obligation to pay the price and to remove the thing that has been delivered by the seller

iv. Art. 2467. Transfer of risk1. The risk of loss of the thing sold owing to a fortuitous event is transferred from the seller

to the buyer at the time of delivery (This differs from the transfer of possession from a sale).

2. That risk is so transferred even when the seller has delivered a nonconforming thing, unless the buyer acts in the manner required to dissolve the contract.

v. Art. 2456. Transfer of ownership1. Ownership is transferred between the parties as soon as there is agreement on the thing

and the price is fixed, even though the thing sold is not yet delivered nor the price paid (This differs from risk transfer from a fortuitous event).

vi. Art. 2457. Transfer of ownership; things not individualized1. When the object of a sale is a thing that must be individualized from a mass of things of

the same kind, ownership is transferred when the thing is thus individualized according to the intention of the parties.

vii. Art. 2458. Sale by weight, tale or measure; lump sales1. When things are sold by weight, tale, or measure, ownership is transferred between the

parties when the seller, with the buyer's consent, weighs, counts or measures the things.a. When you sell by weight, count, or measure, then the sale is perfected when

buyer checksb. If these Suspensive Conditions are not met, then there is no sale.

2. When things, such as goods or produce, are sold in a lump, ownership is transferred between the parties upon their consent, even though the things are not yet weighed, counted, or measured.

a. When sold by lump, the sale is perfected when both parties agree on it. b. A LUMP SUM IS NOT A CONDITIONAL SALE

viii. Art. 2460. Sale on view or trial1. When the buyer has reserved the view or trial of the thing, ownership is not transferred

from the seller to the buyer until the latter gives his approval of the thing.a. The viewing or trying of the thing by the buyer following a sale “on approval”

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i. The former is incidental to a special kind of sale where the transfer of ownership depends on approval by the buyer.

ii. The former may lead to “no sale” as a result in case the buyer does not approve the thing in good faith.

b. Buyer's right to inspect things delivered by the seller in performance of a contract of sale

i. The latter is the buyer's right to check whether the seller has complied with the contract.

ii. The latter may lead to “breach of contract” as a result in case the seller does not deliver the right thing, even after a transfer of ownership has taken place.

ix. Art. 2461. Inclusion of accessories1. The sale of a thing includes all accessories intended for its use in accordance with the law

of property.x. Art. 2463. Expenses

1. The expenses of the act and other expenses incidental to the sale must be borne by the buyer.

b. Appropriation or Individualizationi. Edgwood Co. v. Falkenhagen, 1922 [20 barrels of whisky, P drew them from stock, & put them

aside until delivery, D writes that he’s overstocked, prohibition, cancel order]1. Holding: the sale was completed by appropriation. Court held the sale became executed

when the 20 barrels of whiskey were segregated from the balance of the plaintiff’s stock and put aside as the property of defendant. This was an appropriation and completed the sale absolutely whereby the defendant became the owner of the 20 barrels of whiskey. Plaintiff then became entitled to the purchase price.

2. Per Gruning – between the sale and delivery, the law has changed by way of Volstead Act; D argues because whiskey not appropriated, no sale!

ii. Collins v. Louisiana St. Lottery Co., 1891 [P claims 1/20 lottery prize, P did not get order in in time]

1. Holding: The court held that the selection of the tickets made by the defendant was simply a step in the process of filing an order which the defendant had adopted its rules. The selection was merely a conditional appropriation of the tickets to the order which it did not and was not intended to become final or binding until the process had been completed, resulting in the actual filling of the order.

2. Musings: At the time of the case 2457 had not been revised. Under current article, would we get the same result? This is not a sale by weight, tale or measure. This is not a lump sale either. This is a sale in which individualization had to occur and it was not competed according to intention of parties because of the well established practices of the lottery company. The plaintiff had knowledge of these practices. The same result would be reached. The first paragraph of 2457 codifies Collins.

iii. Peterkin v. Martin, 1878 [corn by the elevator, P says he got bad corn, which was damaged before it was weighed and delivered to P; when was contract perfected?]

1. Holding: the sale was not perfect until weighing and delivery on May 3rd and 4th. Had the elevator taken fire and the corn been destroyed before it was weighed, D could not have sued for a specific sum as the ascertained price of the corn. By weight, tale or measure is not a sale “in lump.”

iv. Shuff v. Morgan, 1821 [Creditor seizes boat filled with hoop-poles, which had not been counted]1. Holding: the things sold are at the risk of the seller till they are counted. As soon as the

sale is perfected by the assent of the parties, the vendee becomes as to the vendor the owner of the thing; the latter cannot sell or abuse, may neglect to have a certain degree of care of it, w/o becoming liable to the former.

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c. Transfer of Riski. Generally – the law was changed in 1993, Art. 2467 now provides (in part): the risk of loss of

the thing sold owing to a fortuitous event is transferred from the seller to the buyer at the time of delivery. P. 151 in book is good exam hypothetical

ii. Per Gruning – the default rule is that delivery occurs where the goods are; it is the buyer’s duty to take delivery where the goods are, unless contract says otherwise

d. Things in Transiti. Art. 2613. Things in transit, ownership

1. When, according to the terms of the contract, the seller sends the things to the buyer through a common carrier, the form of the bill of lading determines ownership of the things while in transit.

2. When the bill of lading makes the things deliverable to the buyer, or to his order, ownership of the things is thereby transferred to the buyer.

3. When the bill of lading makes the things deliverable to the seller, or to his agent, ownership of the things thereby remains with the seller.

4. When the seller or his agent remains in possession of a bill of lading that makes the things deliverable to the buyer, or to the buyer's order, the seller thereby reserves the right to retain the things against a claim of the buyer who has not performed his obligations.

ii. Per Gruning – bill of lading is like a check that doesn’t deal with money, it’s a document which shows who has the right to pick up the goods; like a receipt; think of a bill of lading as a warehouse receipt

iii. Art. 2614. Stoppage in transit1. The seller may stop delivery of the things in the possession of a carrier or other

depositary when he learns that the buyer will not perform the obligations arising from the contract of sale or is insolvent.

iv. Art. 2616. Things in transit, risk of loss1. When the contract requires the seller to ship the things through a carrier, but does

not require him to deliver the things at any particular destination, the risk of loss is transferred to the buyer upon delivery of the things to the carrier, regardless of the form of the bill of lading.

2. When the contract of sale requires the seller to deliver the things at a particular destination, the risk of loss is transferred to the buyer when the things, while in possession of the carrier, are duly tendered to the buyer at the place of destination.

3. When the parties incorporate well established commercial symbols into their contract, the risk of loss is transferred in accordance with the customary understanding of such symbols.

v. Art. 2617. Payment against documents1. In all cases where the parties have agreed that the seller will obtain a document showing

that the things have been delivered to a carrier or a depositary the buyer must make payment against tender of that document and others as required.

2. The seller may not tender, nor may the buyer demand, delivery of the things in lieu of the documents.

vi. California Fruit Market Exchange v. John Meyer, Inc., 1928 [Bill of lading drawn in seller’s name, transport peaches from CA to Nola; Nola custom buy when arrive and inspect; when acceptance occurred and risk transferred?]

1. Holding: Rules in favor of defendant, holding that peaches travelled at the sellers risk because the custom was for a right of inspection in NOLA. Under modern law, the risk of loss would pass to the buyer if a term in the contract was FOB California because it would be a shipment contract in which the risk would pass to the buyer.

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2. Per Gruning – modern law – risk of loss would pass to the buyer if a term in the contract was FOB b/c it would be a shipment contract where the risk would pass to the buyer.

3. Per Gruning – Sold FOB and sold subject to LA acceptance should have been good enough to transfer risk, but good were consigned to seller, which means seller did not want to give them up until delivered

vii. Billiot v. Lovell, 1993 [D gets in accident and kills passenger, was the bill of sale perfected, transferring ownership to D before accident, or is dealer responsible for insurance?]

1. Holding: Automobile was no longer owned by the Gross dealership. Sale was complete on August 29 b/c on that date, parties reached an agreement as to the object sold and the price. Therefore, it is clear that at the time of the accident the automobile was no longer owned by dealership and no coverage under Chrysler’s policy.

2. Per Gruning – bad management by Gross to sign document b/c the deposit had not been tendered in full. What if Gross rep found out fact that made her not want to accept the offer, could she have? Does the “not valid until signed as accepted” mean anything? Does the signing overcome the lack of a complete deposit? If you could show that language was industry standard, maybe you could get around it

Sales Subject to Conditions

I. Conditions in Generala. Generally – normally, ownership transfers on agreement, and risk transfers on delivery

i. Suspensive Condition – condition when an obligation may not be enforced until the uncertain even occurs

1. Ex: sale of a future thing; agreement common in immovable and vehicle sales, where parties agree that the sale will not be perfected until the buyer is approved for a long with which to pay for the thing

ii. Resolutory Condition – condition when the obligation may be immediately enforced but will come to an end when the uncertain event occurs.

1. Ex: buyer’s right to inspectionb. Art. 1767. Suspensive and Resolutory Condition

i. A conditional obligation is one dependent on an uncertain event.ii. If the obligation may not be enforced until the uncertain event occurs, the condition is suspensive.

iii. If the obligation may be immediately enforced but will come to an end when the uncertain event occurs, the condition is resolutory.

c. Art. 1768. Expressed and implied conditionsi. Conditions may be either expressed in a stipulation or implied by the law, the nature of the

contract, or the intent of the parties.d. Art. 1769. Unlawful or impossible condition

i. A suspensive condition that is unlawful or impossible makes the obligation null.e. Art. 1770. Condition that depends on the whim or the will of the obligor

i. A suspensive condition that depends solely on the whim of the obligor makes the obligation null.ii. A resolutory condition that depends solely on the will of the obligor must be fulfilled in good

faith.f. Art. 1771. Obligee's right pending condition

i. The obligee of a conditional obligation, pending fulfillment of the condition, may take all lawful measures to preserve his right.

g. Art. 1772. Fault of a partyi. A condition is regarded as fulfilled when it is not fulfilled because of the fault of a party with an

interest contrary to the fulfillment.h. Art. 1773. Time for fulfillment of condition that an event shall occur

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i. 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.

ii. If no time has been fixed for the occurrence of the event, the condition may be fulfilled within a reasonable time.

iii. 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.

i. Art. 1774. Time for fulfillment of condition that an event shall not occuri. 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.1. The condition is regarded as fulfilled whenever it is certain that the event will not occur,

whether or not a time has been fixed.j. Art. 1775. Effects retroactive (suspensive conditions)

i. Fulfillment of a condition has effects that are retroactive to the inception of the obligation.ii. Nevertheless, that fulfillment does not impair the:

1. Validity of acts of administration duly performed by a party, nor 2. Affect the ownership of fruits produced while the condition was pending. 3. The fulfillment of the condition does not impair the right acquired by third persons

while the condition was pending.k. Art. 1776. Contract for continuous or periodic performance

i. 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.

l. Canal Motors, Inc. v. Campbell, 1970 [D put deposit to hold car until loan approved, vehicle damaged, loan not approved, D stops paying]

i. Holding: If the $25 payment was a deposit as alleged to hold the car until the purchaser’s loan application was approved, there was at that time, May 28, no completed sale, but at most a conditional obligation dependent upon an uncertain event. The condition of loan approval was a suspensive condition. Whether or not the suspensive condition was satisfied is therefore an issue of fact material to a determination if there was a completed sale of the automobile to Campbell when possession was delivered to him.

II. Inspection by the Buyer v. View and Triala. Vehicles – the jurisprudence of this state does not require that the certificate of title to a vehicle be

transferred in order for the sale to be a valid one. Neither does the law require that an agreement to sell a motor vehicle be notarized or even reduced to writing.

b. Generally – ownership transfers on agreement, but the buyer has a right to inspect the thing and dissolve the sale should the thing not conform to the contract of sale

i. Exception – parties may agree that the buyer must view or try the thing and approve it before title transfers.

c. This differs from the normal right of inspection. i. Normal Right of Inspection is a Suspensive Condition that states that ownership is not

transferred until the items have been inspected.1. If this condition does not happen, then we do not have a sale.

ii. All sales are subject to the Resolutory Condition that the seller delivers a conforming thing. This relieves the seller from his obligations to the seller.

1. Gives a party the right of Breach of the other party. 2. This could vitiate Consent of the contract by sending nonconforming things3. This is an Implied right.

iii. Nevertheless, parties can agree that the buyer must view or try the thing and approve or before title transfers. This is a suspensive condition.

d. Art. 2604. Buyer's right of inspection

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i. The buyer has a right to have a reasonable opportunity to inspect the things, even after delivery, for the purpose of ascertaining whether they conform to the contract. This is a resolutory condition.

ii. Nevertheless, parties can agree that the buyer must view or try the thing and approve or before title transfers. This is a suspensive condition.

e. Art. 2610. Cure of Nonconformityi. Upon rejection of nonconforming things by the buyer, the seller may cure the nonconformity

when: 1. The time for performance has not yet expired or2. The seller had a reasonable belief that the nonconforming things would be acceptable to

the buyer. ii. In such a case the seller must give reasonable notice of his intention to cure to the buyer.

1. If the seller cannot or will not cure the sale, the buyer has the right to dissolve the sale. f. Tunica Biloxi Tribe of Indians v. Bridges, 2006 [whether inspection by the buyer took place on

reservation and whether necessary for perfected sale]i. Holding: Under general sales law, the tribe had the right to inspect the van even after it was

delivered to the reservation and to reject it if it did not meet the tribe’s specifications. The tribe as buyer had that right even w/o specifically noting that the sale would be “contingent on inspection.” The exercise of that right does not bear upon the transfer of ownership of the thing under Art. 2456 b/c at the time of delivery of the van, there already was “agreement on the thing and the price [was] fixed…” Rather, Bertalotto’s “inspection” is more appropriately classified as an exercise of any buyer’s right of inspection following any sale under Art. 2604.

ii. Inspection by the Buyer: Art 2640 “where buyer has reserved the view or trial of the thing, ownership is not transferred form the seller to the buyer until the latter gives his approval of the thing.” Comments to Art. 2640: the situation contemplated by the article “must be distinguished from the buyer’s right to inspect things delivered by the seller in performance of a contract of sale. The [view or trial] is incidental to a special kind of sale where the transfer of ownership depends on approval by the buyer. The [usual sale] is the buyer’s right to check whether the seller has complied with the contract.”

g. Hamilton Co v. Medical Arts Bldg. Co, 1931 [refrigerator installed by P not payed and seized by sheriff]i. Holding: The court decides the contract was a LA contract because the conditions of the contract

could only be executed in the state of LA where the goods were destined for installation and use and which until complied with caused the contract to be executory and incomplete. Here, seller knew goods were destined for LA, part of purchase price was not to be paid until after the goods were delivered and installed, notes representing the deferred part of the price were executed in Louisiana.

III. Other Implicit Resolutory Conditionsa. Art. 2561. Dissolution of sale for nonpayment of price

i. If the buyer fails to pay the price, the seller may sue for dissolution of the sale. ii. If the seller has given credit for the price and transfers that credit to another person, the right of

dissolution is transferred together with the credit.iii. In case of multiple credit holders, all must join in the suit for dissolution, but if any credit

holder refuses to join, the others may subrogate themselves to his right by paying the amount due to him.

iv. If a promissory note or other instrument has been given for the price, the right to dissolution prescribes at the same time and in the same period as the note or other instrument.

b. Per Gruning:i. Unwound Sale - If when the buyer examines the thing sold to him by the seller and the thing is

found not to conform with the order, then the sale is viewed as being unwound, not dissolved. ii. If the seller does not send what is promised (something completely different), then the seller

breached and the contract can be dissolved.

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iii. If the buyer fails to pay the price, the seller may sue for dissolution of the sale. c. Berry v. Ginsburg, 1957 (Dissolving condition?) [diamond ring, contract doesn’t state frequency in

which payments must be made, D refuses payment]i. Holding: Rescission granted. The written contract which defendant wrote himself, expressly

provided no certain sum of money to be paid weekly. Plaintiff entitled to recover amount paid and justified in instituting action for rescission on the grounds of defendant refusing to accept payments.

ii. Notes: seller’s refusal to accept the buyer’s irregular payments was a “dissolving condition.” Would it make more sense to reason that the seller breached the contract and therefore the buyer has the power to filed suit to have it dissolved?

iii. Per Gruning – jeweler’s possession of the ring, since plaintiff is technically owner, is it conversion? Or is the possession of the ring one of security? Today, jeweler could create a security device, chattel mortgage; jeweler could retain title until payment received. As long as you obey Ch. 9 UCC LA, retaining title shouldn’t be a problem

IV. Common Law “Conditional Sales” (Financed lease provides a way for parties to subject their sale of a movable to a suspensive condition of full payment by the buyer)

a. Common Law “Conditional Sales”i. Review the La. R.S. 3301 - Leases

ii. Conditional Sales - An agreement to purchase where the owner or seller maintains ownership while the buyer makes payment of lease, the ownership does not transfer until the last payment is met.

1. The condition transfers title, not the agreement. iii. Lease with an Option to Buy - This is a lease agreement with an Option to buy. The option to

buy is a suspensive condition. 1. You have to exercise the option in order for ownership to transfer.

b. In re Appeal of Chase Manhattan Leasing Corp., 1994 [Superdome scoreboard sign; i. Holding: Not subject to tax. The transaction is actually a financed sale designed to allow LSED

to acquire the system by circumventing the bond process. Public property used for public purpose is exempt from tax. The scoreboard was used for public purposes, tax does not apply.

V. The Bond for Deed Contract (provides way for parties to subject their sale of an immovable to a suspensive condition of full payment by the buyer)

a. Per Gruning – buyer only becomes owner after full price has been paid, put the title in escrowb. LSA-R.S. 9:2941 “Bond for Deed” defined

i. Bond for Deed - A contract to sell real property, in which the purchase price is to be paid by the buyer to the seller in installments and the seller after payment of a stipulated sum agrees to deliver title to the buyer.

1. Sale where the seller retains title, but gives up (all rights) care custody and control until all installment payments are met.

2. This is a type of conditional sale. 3. Risk transfers upon the agreement, not title

c. Bond for Deed Contract v. Lease with an Option to Buy i. Bond for Deed – contract to sell real property, in which the purchase price is to be paid by the

buyer to the seller in installments and the seller after payment of a stipulated sum agrees to deliver title to the buyer.

ii. Lease with Option to Buy – party gives to another the right to accept an offer to sell or buy a thing within a stipulated time. An option must set forth the thing and the price, and must meet the formal requirements of the sale it contemplates.

d. Kreher v. Bertucci, 2002 [water leaks through glass door, reduce purchase price instead of fixing, P injured]

i. Holding: Worley not liable for injuries. Under the bond for deed, Worley retained title of property until repayment, bur relinquished possession, care, custody, and control of the property

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as of the time of the sale. The care, custody, and control of property were transferred to Bertucci at that time. Worley’s position can be analogized to that of a bank that holds a mortgage of a piece of property until a loan is completely repaid.

e. Solet v. Brooks – GOOD EXAM question per Gruning

I. Movables and the Bona Fide Purchaser Doctrine - a. Conflict Between Security of Ownership and Security of Transaction

i. LA Civil Code articles intend to protect the security of ownership of movables, but only for specific periods of time following dispossession.

ii. Even when the thing was lost or stolen, security of transaction is preferred over security of ownership.

b. Per Gruning – SECURITY OF OWNERSHIP v. SECURITY OF TRANSACTION c. Art. 521, Art. 523, and Art. 525 are exceptions to Art. 520.d. Relevant Codes

i. Art. 517. Voluntary transfer of ownership of an immovable1. The ownership of an immovable is voluntarily transferred by a contract between the

owner and the transferee that purports to transfer the ownership of the immovable. 2. The transfer of ownership takes place between the parties by the effect of the

agreement and is not effective against third persons until the contract is filed for registry in the conveyance records of the parish in which the immovable is located.

ii. Art. 518. Voluntary transfer of the ownership of a movable1. The ownership of a movable is voluntarily transferred by a contract between the

owner and the transferee that purports to transfer the ownership of the movable. 2. The transfer of ownership takes place as between the parties by the effect of the

agreement and against third persons when the possession of the movable is delivered to the transferee.

3. When possession has not been delivered, a subsequent transferee to whom possession is delivered acquires ownership provided he is in good faith.

4. Creditors of the transferor may seize the movable while it is still in his possession.iii. Art. 519. Transfer of action for recovery of movable

1. When a movable is in the possession of a third person, the assignment of the action for the recovery of that movable suffices for the transfer of its ownership.

iv. Art. 521. Lost or stolen thing1. One who has possession of a lost or stolen thing may not transfer its ownership to

another. 2. Thing is Stolen - When one has taken possession of it without the consent of its owner. 3. Thing is Not Stolen - When the owner delivers it or transfers its ownership to another as a

result of fraud - Test Questiona. When fraud, a person can go after the person who bought in bad faith.

v. Art. 522. Transfer of ownership by owner under annullable title (Bona Fide Purchaser Doctrine)

1. A transferee of a corporeal movable in good faith and for fair value retains the ownership of the thing even though the title of the transferor is annulled on account of a vice of consent.

vi. Art. 523. Good faith; definition – KNOW FOR EXAM PER GRUNING1. An acquirer of a corporeal movable is in good faith for purposes of this Chapter unless

he knows, or should have known, that the transferor was not the owner.vii. Art. 524. Recovery of lost or stolen things – NEGATIVE INFERENCE

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1. The owner of a lost or stolen movable may recover it from a possessor who bought it in good faith: [original owner can get it back w/o having to pay; protecting ownership; has not lost ownership if you can get it back; however, we protect the merchant]

a. At a public auction orb. From a merchant customarily selling similar things on reimbursing the

purchase price.2. The former owner of a lost, stolen, or abandoned movable that has been sold by authority

of law (sheriff) may not recover it from the purchaser.a. Good faith purchasers do get reimbursement through claims against seller.b. Bad faith purchasers do not get reimbursement and must give the lost or stolen

thing back. 3. Per Gruning – balancing act between protecting ownership and the merchant

viii. Art. 525. Registered movables1. The provisions of this Chapter do not apply to movables that are required by law to be

registered in public records.ix. Art. 525 comment b is the vehicle cert. of title law-- no person buying a vehicle shall acquire a

marketable title unless they have a valid title in their possessionx. Art. 2452. Sale of a thing of another

1. The sale of a thing belonging to another does not convey ownership xi. Art. 2442. Recordation of sale of immovable to affect third parties

1. The parties to an act of sale or promise of sale of immovable property are bound from the time the act is made, but such an act is not effective against third parties until it is filed for registry according to the laws of registry

e. Lost or Stolen Thingsi. Brown & Root, Inc., v. Southeast Equip. Co., 1985 [stolen wheeled loader, repurchased, seized as

stolen]1. Holding: the good faith purchaser of a stolen movable is to be protected at the expense

of the true owner. Other testimony showed that Brown was selling similar loaders from its stock at prices even lower than what the defendant paid for the one in question.

ii. Livestock Producers, Inc., v. Littleton, 1999 (Stolen Cattle) 1. Issue: Whether third party purchaser of cows, LPE and Sonnier, did so in good faith and

as such retain ownership of cattle minus purchase price. What constitutes good faith under Art. 523?

2. Holding: 1) Court finds that LPI was not guilty of any intentional wrong or complicity with Smith in the sale of the stolen cattle, but the fact that Smith was not a regular customer, the cattle had fresh brands, and LPI/Stratton made no inquiry into the ownership of the cattle makes LPI liable to Littleton for the price of the 126 cattle sold at auction at $94,500. 2) Littleton not liable for the theft of property as a result of leaving on Smith’s property once the start to calve. 3) Stratton and LPI not in good faith when purchasing the 74 cows and not entitled to reimbursement from Littleton

3. Reasoning: 2) the record fails to support that Littleton was negligent or unreasonable to pay Smith to secure the cattle 3) Stratton had sufficient notice that something was amiss when Smith sought to quickly consummate a private sale of cattle that had a new brand that was not attributable to Smith. Given the freshness of the Brand, Stratton should have questioned the ownership of the cattle.

f. Louisiana Jurisprudential Improvisation i. William Frantz & Co., Fink, 1909 GRUNING likes this one [jewelry maker and repair acting as

owner, mandatory?]1. Holding: (1) Find acquired the first pair of earrings with good title (2) second pair of

earrings defendant should have known the earrings were stolen.

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2. Reasoning: The right was not conferred upon him to buy the goods on a credit; or in other words, to become debtor to plaintiff for the price of the goods. Whatever money received from the person he sold the good to was to be plaintiff’s money. The goods not having been sold to Moss, he could transfer no title to them. The mere possession of movable property is not such indication of ownership as will enable the possessor to convey a good title against the true owner. Ownership never passed from plaintiff to Moss so he could not pass them to defendant. Art. 521 would not apply b/c Moss had consent of the owner to have possession of the earrings.

3. Per Gruning – Did Moss perform his contract? NO! Sells cheaper pair to Fink for less than requirement, and pledges the second pair for cheaper than he had to pay Frantz.

4. Per Gruning – was Moss Frantz’s mandate in this situation? No, b/c he had no power to sell below $502 & $975 and that’s what he did;

5. Per Gruning – a grant of permission alson is not enough, the owner must “accredit the title” of the middle man

6. 1st pair of earrings – Franz is estopped; Fink had reason to believe Moss was a trader in jewels and nothing should be wrong with his title

7. 2nd pair of earrings – Not estopped; Fink knew Moss had “embezzled” Finks own pin and pledged it, Moss no longer creditable

8. Per Gruning – if middle man is not merchant true owner gets back w/o paying price 9. Art. 524 - original owner can get it back w/o having to pay; protecting ownership; has

not lost ownership if you can get it back; however, we protect the merchantg. Registered Movables

i. Trumbell Chevrolet Sales Co. v. Maxwell, 1962 [dealer bounces check after selling vehicle]1. Holding: Maxwell had no knowledge of fraud, therefore is a bona fide purchaser

protected from plaintiff. The effect of plaintiff’s allegations supports the conclusion that by its delivery of the vehicle in question and the acceptance of a check in payment, it completed the necessary formality of a sale, and therefore, was solely responsible for laying the basis for the subsequent allegedly fraudulent transaction.

II. Immovables: The Public Records Doctrine (PRD)a. Generally - The parties to an act of sale or promise of sale of immovable property are bound from the

time the act is made, but such an act is not effective against third parties until it is filed for registry according to the laws of registry.

b. Art 517 and Art. 1839 – although a transfer of ownership is effective immediately between the two parties to it, it is not affective against third parties until filed for registry in the conveyance records of the parish where the immovable is located

c. Basic Principalsi. McDuffie v. Walker, 1910 [who recorded sale first]

1. Holding: Plaintiff wins because he recorded the sale first. The law makes no distinction and does not discriminate against those who acquire property with knowledge or unrecorded contract and those who acquire w/o such knowledge.

ii. Cimarex Energy Co. v. Mauboules, 2010 1. Holding: Recordation is not a source of legal rights, Orange River can not simply rely

on and only look to the public records doctrine to support its position that the Mauboules’ claim was not a competing claim for purposes of concursus. While a third party is entitled to rely on absence from the public record of those interests to be recorded, 3rd party cannot rely implicitly on what is shown in a recorded instrument.

d. The Collision between the public records doctrine and other Protected Interestsi. The Public Records Doctrine and Rights of Spouses in Community

1. Generally – a spouse can defeat the public records doctrine if the third party is not in good faith.

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Seller’s Obligation of Delivery and Warranty Against Eviction

I. Generallya. Seller has two principal obligations: delivering the thing and warranting the thing he sellsb. The Three Types of Warranties

i. Warranty Against Evictionii. Warranty Against Redhibitory Defect

iii. Warranty That the Thing is Fit for Ordinary Use / Non-ConformingII. Delivery Code Articles

a. Art. 2474. Construction of ambiguities respecting obligations of selleri. The seller must clearly express the extent of his obligations arising from the contract, and any

obscurity or ambiguity in that expression must be interpreted against the seller.1. Seller must warrant his obligations of the sale. 2. A waiver of warranty by the buyer must be clear and unambiguous.

b. Art. 2475. Seller's obligations of delivery and warrantyi. The seller is bound to deliver the thing sold and to warrant to the buyer :

1. Ownership and peaceful possession of; and 2. The absence of hidden defects in, that thing; and 3. The thing sold is fit for its intended use.4. Obligations of the Seller - If not met, the buyer may seek SP or dissolution:

a. Delivery of the Thing - Must “Transfer” Possession b. Warranties :

i. Eviction (ownership & peaceful possession)ii. Redhibitory (free from defects)

iii. Fitness for its intended usec. Art. 2477. Methods of Making Delivery

i. Delivery of an immovable is deemed to take place upon execution of the writing that transfers its ownership.

ii. Delivery of a movable takes place by handing it over to the buyer. 1. If the parties so intend delivery may take place in another manner, such as:

a. By the seller's handing over to the buyer the key to the place where the thing is stored, or

b. By negotiating to him a document of title to the thingc. By the mere consent of the parties if the thing sold cannot be transported at the

time of the sale or if the buyer already has the thing at that time. PRIOR EXAM QUESTION

d. Art. 2480. Retention of possession by seller, presumption of simulationi. When the thing sold remains in the corporeal possession of the seller the sale.

ii. Where the interest of heirs and creditors of the seller is concerned, the parties must show that their contract is not a simulation.

e. Art. 2481. Incorporeals, method of making deliveryi. Delivery of incorporeal movable things incorporated into an instrument, such as stocks and

bonds, takes place by negotiating such instrument to the buyer. ii. Delivery of other incorporeal movables, such as credit rights, takes place upon the transfer of

those movables.f. Art. 2483. Costs of delivery and of removal

i. The cost of making delivery is borne by the seller and that of taking delivery by the buyer, in the absence of agreement to the contrary.

g. Art. 2484. Place of deliveryi. Delivery must be made at the place agreed upon by the parties or intended by them.

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ii. In the absence of such agreement or intent, delivery must be made at the place where the thing is located at the time of the sale.

h. Art. 2485. Buyer's rights upon default, damages (Buyer’s Rights in Sale)i. When the seller fails to deliver or to make timely delivery of the thing sold, the buyer may

demand specific performance of the obligation of the seller to deliver, or may seek dissolution of the sale.

ii. In either case, and also when the seller has made a late delivery, the buyer may seek moratory (incidental) damages.

i. Art. 2487. Delivery excused until payment of price and for insolvency (Seller’s Rights of a Movable)i. The seller may refuse to deliver the thing sold until the buyer tenders payment of the price, unless

the seller has granted the buyer a term for such payment.1. The seller does not have to deliver the movable until the entire payment is paid.

j. Art. 2489. Condition of thing at time of delivery i. The seller must deliver the thing sold in the condition that, at the time of the sale, the parties

expected, or should have expected, the thing to be in at the time of delivery, according to its nature.

III. Delivery of the Thinga. Generally

i. Art. 2477 says that delivery of movable takes place by manual delivery, in the absence of other arrangements.

ii. Art. 2485 says when seller fails to deliver the thing, then the buyer has two choices, 1) demand specific performance, 2) seek dissolution of the sale and refund of any money paid

iii. Seller may refuse to take delivery until the buyer pays, unless the seller granted the buyer a term for payment as per Art. 2487

b. Things Accessory to the Thing Soldi. Art. 2461 stipulates that “the sale of a thing includes all accessories intended for its use in

accordance with the law of property. ii. In the case of an immovable, that includes its component parts, as per Art. 465-66, 469, and 508.

“In the sale of immovable property, accessories include immovables by destination and predial servitudes in favor of property conveyed.

c. Extension of the Premises: Certain and Limited Body versus Measurei. Art. 2492. Price per Measure

1. If the sale of an immovable has been made with indication of the extent of the premises at the rate of so much per measure (price / acre), but the seller is unable to deliver the full extent specified in the contract, the price must be proportionately reduced.

2. If the extent delivered by the seller is greater than that specified in the contract, the buyer must pay to the seller a proportionate supplement of the price.

3. The buyer may recede from the sale when the actual extent of the immovable sold exceeds by more than one twentieth the extent specified in the contract.

ii. Art. 2494. Lump Price1. When the sale of an immovable has been made with indication of the extent of the

premises, but for a lump price, the expression of the measure does not give the seller the right to a proportionate:

a. Increase of the price, b. Diminution of the price, c. Unless there is a surplus, or a shortage, of more than one twentieth of the extent

specified in the act of sale.2. When the surplus is such as to give the seller the right to an increase of the price the

buyer has the option either to: a. Pay that increase or

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b. Recede from the contractiii. Art. 2495. Sale of a Certain and Limited Body [SALE of AVERSIONEM]

1. When an immovable described as a certain and limited body or a distinct object is sold for a lump price, an expression of the extent of the immovable in the act of sale does not give the parties any right to an increase or diminution of the price in case of surplus or shortage in the actual extension of the immovable.

a. The sale of an immovable with indication of boundaries is a sale of a certain and limited body.

b. The sale of an immovable designated by the adjoining owners is a sale of a certain and limited body.

c. The sale of immovable property designated by a particular proper name is a sale of a certain and limited body.

2. Per Gruning – if you are a seller, sell art. 2495 to cover your ass per diminution iv. Analysis must include and rule out the other options. To conclude a sale is lump sum, must rule

out certain body and measure.d. Delivery of Movables

i. Cook v. West, 1842 [D had not paid all of the money, P refused to continue delivering]1. Holding: Until delivery the thing is considered to be the seller’s property. The seller

was justified in refusing to deliver the hay because he was justified in believing that he would lose the price. Wood could transfer to the plaintiffs only his right of requiring the delivery of the hay on paying the price, or on giving security to pay it at the time agreed on.

e. Delivery of Immovablesi. Matthews v. Gaubler, 1951 [failed to turn over keys b/c of sick child; what constitutes actual

delivery?]1. Holding: The law considers the tradition or delivery of immovables as always

accompanying the public act, which transfers the property. Court says they are not at liberty to disregard the explicit terms of the agreement, which bound the vendors to deliver corporeal possession of the property to the purchaser at the very moment of the passing of the act of sale merely because it was inconvenient for them to make delivery.

f. Things Accessory to the Thing Soldi. Vincent v. Gold, 1972 [glass door removed]

1. Holding: Court compared a few cases involving window unit air conditioners, which they found to be movables because they were easily portable and their degree of attachment to the building was minimal.

g. Extension of the Premises: Certain and Limited Body versus Measurei. Lasiter v. Gaharan, 1996 [80 acres more or less, only 43 acres]

1. Holding: This was not a sale of aversionem. This was a sale of lump sum.2. Reasoning: No amount per acre was specified, per 2492 purchaser of immovable

property lump sum can not claim a diminution of the price on a deficiency unless the measure comes short of that expressed in the contract by 1/20th. In the present case, 1/20th of 80 acres is four acres. The property here was short 43 acres.

ii. Long-Fork, LLC v. Petite Riviere, LLC, 2008 [215 acres more than originally thought, contract said “price per acre shall control in event of discrepancy”]

1. Holding: Property sold as certain and limited body, 2495 applies. Contract stated it was lump sum, and the contract confirms that the object of the sale was to include all the property south of the centerline of Petite River in specified sections. Long-Fork did not survey its property, confirming its intent was not to sell a certain quantity of property, but to sell all of its property south of the certnerline of the Little River regardless of the acreage. As such, 2495 is controlling and Long-Fork is not entitled to “any right to an increase of diminution of the price in the case of surplus or shortage.

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IV. Warranty Against Eviction Code Articles

a. Per Gruning – Degrees of Warrantyi. With warranty

ii. Increase of limit warranty iii. Exclude warrantyiv. Peril and riskv. Quit claim

b. Art. 2500. Eviction, definition, scope of warrantyi. The seller warrants the buyer against eviction, which is the buyer's loss of, or danger of losing,

the whole or part of the thing sold because of a third person's right that existed at the time of the 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.

ii. If the right of the third person is perfected only after the sale through the negligence of the buyer, though it arises from facts that took place before, the buyer has no claim in warranty.

c. Art. 2502. Transfer of rights to a thing (QUITCLAIM)i. A person may transfer to another whatever rights to a thing he may then have, without warranting

the existence of any such rights. In such a case the transferor does not owe restitution of the price to the transferee in case of eviction, nor may that transfer be rescinded for lesion.

ii. Such a transfer does not give rise to a presumption of bad faith on the part of the transferee and is a just title for the purposes of acquisitive prescription.

iii. If the transferor acquires ownership of the thing after having transferred his rights to it, the after-acquired title of the transferor does not inure to the benefit of the transferee.

d. Art. 2503. Modification or exclusion of warranty, seller's liability for personal acts, restitution of price in case of eviction

i. The warranty against eviction is implied in every sale. Nevertheless, the parties may agree to increase or to limit the warranty. They may also agree to an exclusion of the warranty, but even in that case the seller must return the price to the buyer if eviction occurs, unless it is clear that the buyer was aware of the danger of eviction, or the buyer has declared that he was buying at his peril and risk, or the seller's obligation of returning the price has been expressly excluded.

ii. In all those cases the seller is liable for an eviction that is occasioned by his own act, and any agreement to the contrary is null.

iii. The buyer is subrogated to the rights in warranty of the seller against other persons, even when the warranty is excluded.

e. Art. 2506. Rights of buyer against seller in case of evictioni. A buyer who avails himself of the warranty against eviction may recover from the seller the price

he paid, the value of any fruits he had to return to the third person who evicted him, and also other damages sustained because of the eviction with the exception of any increase in value of the thing lost.

f. Art. 2507. Restitution of full price despite deterioration, deduction of damage when benefit to buyeri. A seller liable for eviction must return the full price to the buyer even if, at the time of the

eviction, the value of the thing has been diminished due to any cause including the buyer's neglect.

ii. Nevertheless, if the buyer has benefited from a diminution in value caused by his own act, the amount of his benefit must be deducted from the total owed to him by the seller because of the eviction.

g. Art. 2509. Reimbursement to buyer for useful improvements, liability of seller in bad faith

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i. A seller liable for eviction must reimburse the buyer for the cost of useful improvements to the thing made by the buyer. If the seller knew at the time of the sale that the thing belonged to a third person, he must reimburse the buyer for the cost of all improvements.

h. Art. 2511. Partial eviction, rights of buyeri. When the buyer is evicted from only a part of the thing sold, he may obtain rescission of the sale

if he would not have bought the thing without that part. If the sale is not rescinded, the buyer is entitled to a diminution of the price in the proportion that the value of the part lost bears to the value of the whole at the time of the sale.

i. Art. 2512. Warranty against eviction from proceedsi. The warranty against eviction extends also to those things that proceed from the thing sold.

j. Art. 2513. Scope of warranty in sale of succession rightsi. In a sale of a right of succession, the warranty against eviction extends only to the right to

succeed the decedent, which entitles the buyer to those things that are, in fact, a part of the estate, but it does not extend to any particular thing.

k. Art. 2517. Call in warranty, failure of buyer to call seller in warranty, suit to quiet possessioni. A buyer threatened with eviction must give timely notice of the threat to the seller. If a suit for

eviction has been brought against the buyer, his calling in the seller to defend that suit amounts to such notice.

ii. A buyer who elects to bring suit against a third person who disturbs his peaceful possession of the thing sold must give timely notice of that suit to the seller.

iii. In either case, a buyer who fails to give such notice, or who fails to give it in time for the seller to defend himself, forfeits the warranty against eviction if the seller can show that, had he been notified in time, he would have been able to prove that the third person who sued the buyer had no right.

l. Art. 2557. Eviction and threat of eviction as grounds for suspension of paymenti. A buyer who is evicted by the claim of a third person may withhold payment of the price until he

is restored to possession, unless the seller gives security for any loss the buyer may sustain as a result of the eviction.

ii. A seller who, in such a case, is unable or unwilling to give security may compel the buyer to deposit the price with the court until the right of the third person is adjudged. Also the buyer may deposit the price with the court, on his own initiative, to prevent the accrual of interest.

iii. A buyer may not withhold payment of the price when the seller is not liable for a return of the price in case of eviction.

V. Warranty Against Evictiona. General Concepts, Warranted Rights, and Loss or Danger that Constitutes Eviction

i. Richmond v. Zapata Development Corp. [Cajun Christmas tree, didn’t inspect property; apparent servitude?]

1. Holding: Just as an apparent servitude, an undisclosed mineral lease which produces on the property ample signs of its existence is a real charge of which it is the buyer’s business not to be ignorant and against which he cannot claim warranty. The writers of Art. 2500 dwell not upon the legal classification of the charge but on the practical question of whether the premises may be examined w/o perceiving the visible signs of its existence. I

b. Disturbance: The Loss or Danger that Constitutes Evictioni. Kling v. Mclin, 1981 [can’t obtain title b/c lien]

1. Reasoning: seller has two principal obligations, delivery and warranty. Warranty has two objects, buyer’s peaceful possession of the thing, and free from hidden defects or its redhibitory vices. Peaceful possession is disturbed when he is evicted from the totality of a party of the thing purchased due to claims of third person. When a buyer sues his vendor for breach of peaceable possession, prescription is ten years.

ii. Bologna Bros. v. Stephens, 1944 [improper description of property]

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1. Holding: The court says Bankston’s title is no good, but he is not a party to the suit. The court said the best they can do is third party Mr. Bankston and the conclusion of the court would be effective against him.

2. Reasoning: An imperfect title may lead to eviction. Description of deed must be such that the property conveyed can be located and identified, and general description must appear w/n the four corners of the instrument.

c. Sale With or Without Warranty v. Sale at the Buyer’s Peril and Riski. Per Gruning – the parties can limit the warranty; they can exclude it, which means that the

evicted buyer will still get the price back from the seller, but nothing else; or they can specify that the sale is w/o warranty and at the buyer’s “peril and risk” in which case the buyer cannot get his money back if he is evicted from the property.

ii. Generally – warranty against eviction is implied in every sale, though the parties may agree to increase or to limit the warranty. They may even agree to exclude it, but even in that case the seller must still return the price to the buyer if eviction occurs, unless it was clear to the buyer that he was buying at his own risk and peril

1. Can happen in three ways: a. The buyer was clearly aware of eviction b. The buyer expressly declared that the was buying at his peril and riskc. The seller’s obligation to return the price was expressly excluded

2. Exception to the exception: a. If the seller himself does something to evict his own buyer, then the seller is

liable for that eviction regardless of any agreement to the contraryiii. New Orleans & Carrollton RR. V. Jourdain’s Heirs, 1882 [P evicted, D claims no warranty]

1. Holding: knowledge of the danger of eviction, referred to in the code, means actual knowledge, which must be brought home to him by direct proof. Mere knowledge of the sources of the vendor’s title dispenses with the necessity of establishing knowledge of the danger of eviction in order to bar the claim for restitution of the price, unless the titles referred to have infirmities so patent on their face that the buyer would thereby affected with notice.

iv. Per Gruning – Jourdain states of Art 2503 requires one of two things to be true for the seller’s warranty against eviction to be excluded:

1. The contract may declare that the buyer is buying at his own risk and peril2. Or, direct proof may show that the buyer in fact bought with the knowledge of the danger

of eviction, which in turn shows that they buyer willingly accepts the risk of evictionv. Bielawski v. Landry, 1981 [D includes to issue broad waiver of warranty language; waiver of

warranty sufficiently protects seller from recourse when defective title?]1. Holding: Vendee cannot compel the vendor to deliver a defective title, even w/o

warranty and also w/o resolution of the problem presented by the provisions of Art 2505. Despite waiver due to knowledge by the P, there may be other grounds for eviction apart from the tax title defects. D has no assurance that the purchaser will not seek recourse at a later date.

vi. Clark v. O’Neal [seller is liable for an eviction that is occasioned by his own act, and any agreement contrary is null] [example of buyer’s warranty against seller for his own acts]

1. Reasoning: the proof shows that the defendant has violated his obligation by a neglect of her own duties, and she has suffered the property to be sold for her own debt, and thus she has been instrumental in evicting her own vendee, and thus she has bound herself to maintain the new vendee in possession.

d. The Quit-claim Deedi. Per Gruning – this quit-claim deed, whereby the seller ‘quits’ any claim he might have in the

property is a kind of sale of a hope. The buyer hopes there may be some ownership interest, but recognizes that might not be the case and if not that he’ll have no recourse against the seller.

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Nevertheless, such a transfer “does not give rise to a presumption” that the seller is in bad faith, and even more remarkable functions as just title for the purposes of acquisitive prescription.

ii. Osborn v. Johnston, 1975 [ancestor has title]1. Holding: P’s argument that the property returned by operation of law to Briant’s

patrimony is wholly w/o merit. Since they have no title, P’s cannot prevail.2. Reasoning: Even if this title is a ‘quit-claim’ the title effectively conveyed to Angelloz

the ownership of the land, b/c the levee board was the owner. iii. Simmesport St. Bank v. Roy, 1993

1. Holding: what is contained in the public records doctrine is not determinative of the interest held by a vendor to a quitclaim deed. The Tanner’s lost their interest in the subject property when it was sold to the Bank. Therefore, they had no interest to convey when they executed the quitclaim deed.

2. Notes: Lit says this doesn’t really do against the public records doctrine because the doctrine is negative rather than positive. Your warranted reliance is what is not in the records. Even though something is recorded, it might not be valid-a forged document or a forged judgment of possession in favor of certain heirs.

e. After-Acquired Title Doctrine and Partial Evictioni. Per Gruning – conveyance by quitclaim does not include any implication that the vendor has

good title to the property, or even that he has any title at all. Thus, the purchaser by quitclaim is put on immediate notice that he is not acquiring land but merely the interest of his vendor in the land. Assuming the vendor has been in good faith in selling the property by quitclaim, the buyer was on notice that seller may have had no ownership of property. If the seller subsequently acquires such ownership, then the buyer had not been deprived of anything – he did in fact acquire whatever interest the seller of the quitclaim had at the time of that sale.

ii. St. Landry Oil and Gas Co., Inc. v. Neal, 19281. Holding: after he has instituted suit to rescind, his suit cannot be defeated by a title

acquired by his vendor after the institution of the suit. The new title does not vest in him then, unless he accepts it, for he cannot be forced to retract his steps and dismiss his suit by an after occurrence. In the case of an after-acquired title, the plaintiff’s might have accepted the after-acquired titles, but, due to their suits to rescind, they had the right to refuse those titles and continue with their suits.

iii. Waterman v. Tidewater Assoc. Oil Co., 1947 [parallel chains of title]1. Holding: Conveyance by quitclaim deed does not include any implication that the

vendor has good title to the property, or even that he has any title at all. Thus, the purchaser by quitclaim deed is put on immediate notice that he is not acquiring land but merely the interest of his vendor in the land. The court emphasized that after acquired title doctrine cannot be expanded to include quitclaim deed because a quitclaim only transfers the present interest and not the property. Rectangle acquired title in 1927 and could have validly transferred to Johnson and Johnson’s successors.

f. Subrogationi. Per Gruning – last paragraph of Art. 2503 provides that “the buyer is subrogated to the rights in

warranty of the seller against other person, even when the warranty is excluded.” This means, that if the buyer cannot proceed against his seller because he agreed to exclude the warranty, he can step into the seller’s shoes and proceed against previous sellers.

ii. Aizpurua v. Crane Pool Co., Inc., 1984 [swimming pool starts to sink]1. Reasoning: The Smiths, vendors of the house and pool, warranted to plaintiff’s that the

things old was free from defect. The plaintiff’s were subrogated to the Smith’s rights and actions against “all others.” The right to sue for beach of warranty of quality is transmitted with the object of the sale. The implied warranty of materials and workmanship in a building contract is one to which a subsequent purchaser is subrogated.

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One who acquires immovable property can enforce a contract made for the improvement of the property by the person from whom he acquired it.

I. Redhibition, Fitness, and Things Not of Kind Specified in the Contracta. General Principles [LOOK TO GRUNING SALES MOTIF FOR GENERAL HEADINGS]b. Per Guning: Three different types of warranties, that apply to three different types of situationsc. Per Guning – Know the difference between Art 2520, 2524, 2529; redhibition has its own remedies and

shorter prescription periods. In contrast, the prescriptive period for the others is ten years, because the normal breach of contract remedies apply

d. Two rights of action for redhibitory defects:i. A defect is redhibitory when it renders the thing useless, or its use so inconvenient that it must be

presumed that a buyer would not have bought the thing had he known of the defect.ii. A defect is redhibitory also when, without rendering the thing totally useless, it diminishes its

usefulness or its value so that it must be presumed that a buyer would still have bought it but for a lesser price.

e. Before the a buyer can bring one action or the other against is seller, he may have to give that “seller a notice of the existence of a redhibitory defect in the thing sold” so the seller may be given “the opportunity to make the required repairs.” Art. 2522

i. Good faith seller has the right to be notified of the existence of a redhibitory defect so he can attempt to repair that defect, and thereby give buyer the full performance that buyer has the right to demand out of a synallagmatic or commutative contract, as the contract of sale is.

ii. Bad faith seller is denied the right to repair, when the seller has actual knowledge of the existence of a redhibitory defect in the thing sold.

f. Prescription i. Good faith – Four (4) years from the day of delivery or one year from the day the defect was

discovered, which ever comes firstii. Good faith immovable – One (1) year from the day of delivery of the property

iii. Bad Faith – One (1) year from the day the defect was discovered by the buyerg. Subrogation – a seller, who is subrogated into the rights of his buyer, may attempt to recover whatever

price he had to return to his buyer from the 3rd party who was the cause of the loss of the defective thingh. A good faith Seller – one “who did not know that the thing he sold had a defect is only bound to repair,

remedy, or correct the defect. If he is unable to do so, he is bound to return the price to the buyer w/ interest from the time it was paid, and reimburse reasonable expenses, expenses occurred in preservation, and fruits; interest return is for someone who used a credit card per se.

i. A good faith seller is one who is neither “deemed” nor “presumed” to know of any defects in the thing he sells.

i. A bad faith seller is one “who knows that the thing he sells has a defect, but omits to declare it, or a seller who declares that the thing has a quality that he knows it not to have, Art. 2545

i. A bad faith seller is liable to return price plus interest, reimbursement of reasonable expenses occasioned by the sale and those incurred by for the preservation of the thing, and for damages and attorneys fees. Good faith seller is not liable for the additional damages, only the return of the purchase price

j. A seller held liable for redhibitory defect has an action against the manufacturer of the defective thing, if the defect esisted at the time the thing was delivered by the manufacturer to the seller for any loss the seller sustained b/c the redhibiion. Any contractual provisions that attempt to limit, diminish or prevent such recovery by a seller against the manufacturer shall not no effect

k. Redhibition Code Articlesi. Art. 2520. Warranty Against Redhibitory Defects

1. The seller warrants the buyer against redhibitory defects, or vices, in the thing sold.2. A defect is redhibitory when it renders the thing useless, or its use so inconvenient that it

must be presumed that a buyer would not have bought the thing had he known of the

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defect. The existence of such a defect gives a buyer the right to obtain rescission of the sale.

3. A defect is redhibitory also when, without rendering the thing totally useless, it diminishes its usefulness or its value so that it must be presumed that a buyer would still have bought it but for a lesser price. The existence of such a defect limits the right of a buyer to a reduction of the price.

ii. Art. 2521. Defects that are made known to the buyer or that are apparent1. The seller owes no warranty for defects in the thing that were known to the buyer at the

time of the sale, or for defects that should have been discovered by a reasonably prudent buyer of such things.

iii. Art. 2522. Notice of existence of defect1. The buyer must give the seller notice of the existence of a redhibitory defect in the thing

sold. That notice must be sufficiently timely as to allow the seller the opportunity to make the required repairs. A buyer who fails to give that notice suffers diminution of the warranty to the extent the seller can show that the defect could have been repaired or that the repairs would have been less burdensome, had he received timely notice.

2. Such notice is not required when the seller has actual knowledge of the existence of a redhibitory defect in the thing sold.

iv. Art. 2530. Defect must exist before delivery1. The warranty against redhibitory defects covers only defects that exist at the time of

delivery. The defect shall be presumed to have existed at the time of delivery if it appears within three days from that time.

v. Art. 2531. Liability of seller who knew not of the defect1. A seller who did not know that the thing he sold had a defect is only bound to repair,

remedy, or correct the defect. If he is unable or fails so to do, he is then bound to return the price to the buyer with interest from the time it was paid, and to reimburse him for the reasonable expenses occasioned by the sale, as well as those incurred for the preservation of the thing, less the credit to which the seller is entitled if the use made of the thing, or the fruits it has yielded, were of some value to the buyer.

2. A seller who is held liable for a redhibitory defect has an action against the manufacturer of the defective thing, if the defect existed at the time the thing was delivered by the manufacturer to the seller, for any loss the seller sustained because of the redhibition. Any contractual provision that attempts to limit, diminish or prevent such recovery by a seller against the manufacturer shall have no effect.

vi. Art. 2534. Prescription1. A. (1) The action for redhibition against a seller who did not know of the existence of a

defect in the thing sold prescribes in four years from the day delivery of such thing was made to the buyer or one year from the day the defect was discovered by the buyer, whichever occurs first.

a. (2) However, when the defect is of residential or commercial immovable property, an action for redhibition against a seller who did not know of the existence of the defect prescribes in one year from the day delivery of the property was made to the buyer.

2. B. The action for redhibition against a seller who knew, or is presumed to have known, of the existence of a defect in the thing sold prescribes in one year from the day the defect was discovered by the buyer.

3. C. In any case prescription is interrupted when the seller accepts the thing for repairs and commences anew from the day he tenders it back to the buyer or notifies the buyer of his refusal or inability to make the required repairs.

vii. Art. 2537. Judicial Sales1. Judicial sales resulting from a seizure are not subject to the rules on redhibition

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viii. Art. 2538. Multiple sellers, multiple buyers, successors1. The warranty against redhibitory vices is owed by each of multiple sellers in proportion

to his interest.2. Multiple buyers must concur in an action for rescission because of a redhibitory defect.

An action for reduction of the price may be brought by one of multiple buyers in proportion to his interest.

3. The same rules apply if a thing with a redhibitory defect is transferred, inter vivos or mortis causa, to multiple successors.

ix. Art. 2540. Redhibitory vice of one of several matched things sold together1. When more than one thing are sold together as a whole so that the buyer would not have

bought one thing without the other or others, a redhibitory defect in one of such things gives rise to redhibition for the whole.

x. Art. 2541. Reduction of the price1. A buyer may choose to seek only reduction of the price even when the redhibitory defect

is such as to give him the right to obtain rescission of the sale.2. In an action for rescission because of a redhibitory defect the court may limit the remedy

of the buyer to a reduction of the price.xi. Art. 2545. Liability of seller who knows of the defect; presumption of knowledge

1. A seller who knows that the thing he sells has a defect but omits to declare it, or a seller who declares that the thing has a quality that he knows it does not have, is liable to the buyer for the return of the price with interest from the time it was paid, for the reimbursement of the reasonable expenses occasioned by the sale and those incurred for the preservation of the thing, and also for damages and reasonable attorney fees. If the use made of the thing, or the fruits it might have yielded, were of some value to the buyer, such a seller may be allowed credit for such use or fruits.

xii. Art. 2548. Exclusion or limitation of warranty; subrogation1. The parties may agree to an exclusion or limitation of the warranty against redhibitory

defects. The terms of the exclusion or limitation must be clear and unambiguous and must be brought to the attention of the buyer.

2. A buyer is not bound by an otherwise effective exclusion or limitation of the warranty when the seller has declared that the thing has a quality that he knew it did not have.

3. The buyer is subrogated to the rights in warranty of the seller against other persons, even when the warranty is excluded.

l. Codes Fitness for Ordinary Usei. Art. 2524. Thing fit for ordinary use

1. The thing sold must be reasonably fit for its ordinary use.2. When the seller has reason to know the particular use the buyer intends for the thing, or

the buyer's particular purpose for buying the thing, and that the buyer is relying on the seller's skill or judgment in selecting it, the thing sold must be fit for the buyer's intended use or for his particular purpose.

3. If the thing is not so fit, the buyer's rights are governed by the general rules of conventional obligations.

m. Things Not of Kind Specified in the Contracti. Art. 2529. Thing not of the kind specified in the contract

1. When the thing the seller has delivered, though in itself free from redhibitory defects, is not of the kind or quality specified in the contract or represented by the seller, the rights of the buyer are governed by other rules of sale and conventional obligations.

II. General Principlesa. Nelson Radiology Associates, LLC v. Integrity Medical Systems [get’s bad machine, D attempts to fix]

i. Reasoning: It is clear that the mammography unit was defective and could not be used for the purpose for which it was intended. Plaintiff would not have bought the unit had she known of the

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defects. The defendant probably knew of the defects of the unit, but that knowledge does not rise to bad faith. Return of purchase price was appropriate.

b. Bo-Pic Foods, Inc. v. Polyflex Film and Converting, Inc., 1995 [potato chip wrapping, D knows P’s intended purpose and says it will work, it doesn’t]

i. Reasoning: Courts have recognized warranties can be limited or waived. However, they cannot be regarded as waived in the absence of a clear, unambiguous and express agreement. Here, defendant knew of plaintiff’s intended use of the product, and admitted to the plaintiff that it meet its requirements and specifications, therefore, defendant warranted the film as suitable for the purpose of bagging potato chips. However, the record indicates that the product was wholly unsuitable for the plaintiff’s purpose of bagging chips, as produce became stale after four days in the bag. Accordingly, defendant did not satisfy the implied warranty of fitness in the sale of the film. However, the warranty of fitness is not owed by a seller when buyer waives it. Here, buyer did not clearly and expressly waive the warranty of fitness, by admitted he was purchasing at own risk and peril.

c. Rey v. Cuccia, 1974 [Travel trailer, uses it for 8 days and it breaks]i. Holding: The circumstantial evidence clearly proves, against the seller, that a redibitory defect

existed at the time of the sale of the trailer.ii. Reasoning: Even if the defect appears more than three days after the sale, if it appears soon after

the thing is put into use, a reasonable inference may arise, in the absence of other explanation or intervening cause, that the defect existed at the of the sale.

I. Limitations on Redhibition: the Seller’s Right to an Opportunity to Repaira. Generally – Art. 2522 and 2534 apply hereb. Queral v. Latter & Blum, Inc., 2010 [P was told that the house was on pilings, and it wasn’t]

i. Reasoning: The court finds that the plaintiff’s did not have constructive knowledge of the defect or the fact that the house was not built on pilins until the engineers report on 5/5/99. Plaintiff might have noticed some problems, but did not know the extent of which until the report, which prescription runs from then.

c. Dage v. Obed, 2005 [P told roof leaked and went through with sale anyway]i. Holding: Plaintiff knew that the roof had problems. The outcome hinges on whether the buyer

knew or should have known regarding the condition of the roof. Plaintiff had roof inspected before purchasing, wherein inspector told P that the roof needed repair, so much so that he was not allowed to walk on it. A reasonably prudent buyer would have been on notice that the roof was a problem. Also, a reasonably prudent person would have asked for the warranty documents.

II. Liability of Seller for Redhibitory Defects – Good Faith and Bad Faitha. Rey v. Cuccia, 1974; Cont.

i. Holding: by preponderance of evidence, the trailer break-up resulted from a defect in construction or design which existed at the time the manufacturer Yellowstone sold the trailer to seller Cuccia.

ii. Reasoning: A manufacturer is presumed to know of the defects of the products he sells. Manufacturer should not be exonerated from liability because of faulty trailer hitch install because there was no warning that such damage might occur by failure to install as recommended, and if such a slight deviation from the recommendation was able to cause such damage, this would constitute a defect the manufacturer was responsible for.

b. David v. Thibodeaux, 2005 [termites]i. Holding: Defendant not given opportunity to repair, no rescission, but reduction

ii. Reasoning: Redhibitory defects are excluded when the buyer could have discovered the defect through a simple inspection. Defendant was not given an opportunity to repair the property, instead plaintiff filed suit. However, failure to give notice does not preclude the buyer from obtaining reduction of the purchase price.

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Lease

I. General Provisionsa. Essential Elements of a lease – the essential elements of a lease are the thing, the price (rent), consent of

the parties, and a term. The term may not be perpetual. The form of the lease may be written or oral. The code provides that for a lease agreement wherein the parties failed to agree to the duration of the term, the duration is supplied by law, See 2678. In the case of the lease movables, the term is day to day, unless the rent is fixed by longer or shorter terms.

i. Term – The parties can either sett a term themselves or allow the law to set it for them, see 2678.1. Fixed - means that it terminates at a designated date or upon the occurrence of a

designated event. A fixed term may not exceed 99 years, and if a longer term is provided or the lease contains an option to extend the term to more than 99 years, then the term must be reduced to 99 years, see 2679

2. Indeterminate – where the parties do not see the term, Art. 2680 supplies the legal terma. Agricultural lease – year to yearb. Immovable or movable used as a residence – month to monthc. Movables in general – if fixed for a period other than from day to day, then

the term, unless otherwise agreed, is one such period not to exceed 1 monthb. Reconduction – generally, a lease with a fixed term ends upon the expiration of that term, w/o need of

notice, Art. 2720. The parties are free, however, to continue the lease either explicitly or implicitly. If the lease contract contains an option to extend the term and the option is exercised, then the lease continues for the term and under any other provisions stipulated in the option, Art. 2723. Alternatively, if the lessee simply remains in possession after the expiration of a fixed-term lease for a certain period of time w/o notice to vacate or terminate or any other opposition by the lessor, then the lease is implicitly reconducted, Art. 2721.

i. When neither party to the contract exercises his option to terminate the lease w/n one week after the expiration of the term stated therin, there arises a legal presumption that the lease is continued.

ii. This means that the lease continues, but for an indeterminate term; year to year for an agriculture lease, Art 2722, month to month for a non-agriculture lease whose terms was a month or longer, Art. 2723, day to day where the original term was at least a day but shorter than a month, id. When reconduction occurs, all of the provisions of the lease continue for the length of the indeterminate term

c. Dissolutioni. Ways in which a lease may terminate:

1. Misuse of the thing, Art. 2686a. Uses the thing for a purpose other than that for which it was leased for or in a

manner that may cause damage to the thing2. Nonpayment of rent, Art. 27043. Expropriation; loss or destruction, Art. 2714; partial destruction, Art. 27154. Termination of lease granted by a usufructuary, Art. 27165. Death of lessor or lessee, Art. 27176. Leases with reservation of right to terminate, Art. 27187. Termination of lease with an indeterminate term, Art. 2727; Notice of termination, timing

d. The Lessor’s Rights and Obligationsi. The Obligation to Deliver

1. The lessor is bound to deliver the premises leased to the lessee2. If the premises as delivered differ in extent from what was promised, Art. 2492 – 2495

apply; sales of immovables per aversionem, per measure, and by lump sumii. Lessor’s Obligations to Maintain and Repair

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1. Lessor’s Obligation for repairs - make repairs necessary to maintain the thing in a condition suitable for the purpose of which it was leased

iii. Alterations by Lessor Prohibited 1. During the lease, the lessor may not make any alterations in the thing, i.e. adding on to

the thing under leaseiv. Lessor’s Right to Make Repairs

1. If during the lease the thing requires a repair that cannot be postponed until after the lease, lessor has the right to make the repair even if it causes the lessee to suffer inconvenience or loss of use of the thing

2. In such a case, lessee may obtain a reduction or the rent or a dissolution of the lease, depending on the circumstances, including each party’s fault or responsibility for the repair, the length of the repair period and the extent of the loss of use.

v. Lessor’s Warranty Against Vices and Defects and the Waiver therof 1. Art. 2696, the lessor warrants the lessee that the thing is suitable for the purpose for

which it was leased and that it is free of vices or defects that prevent its use for that purpose. This warranty also extends to vices or defects that arise after the delivery of the thing and are not attributable to the fault of the lessee.

2. Waiver of Warranty for Vices or Defects a. Warranty provided may be waived, but only by clear and unamibgious

language that is brought to the attention of the lessee:i. Nevertheless , a waiver of warranty is ineffective:

1. (1) To the extent it pertains to vices or defects of which the lessee did not know and the lessor knew or should have known;

2. (2) To the extent it is contrary to the provisions of Article 2004; or

3. (3) In a residential or consumer lease, to the extent it purports to waive the warranty for vices or defects that seriously affect health or safety.

vi. Peaceful Possession and Vices and Defects 1. Art. 2700 provides protection against actions that disturb the lessee’s enjoyment of the

premises, caused by a person who asserts ownership or right to possession of, or any other right in the thing.

2. Call in Warranty , Art. 2701 – if there is a disturbance, you should contact your landlord about the problem, such as upstairs neighbor being too loud. If he fails to take action, lessee may file any appropriate action. If no remedy, lessee has 3 possible remedies:

a. Damagesb. Injunctive reliefc. Dissolution

vii. Lessor’s Remedies 1. Faced with delinquent lessee, lessor can demand that the rent be paid, and after proper

notice, dissolve the lease and evict for non-payment2. However, once evicted and lease dissolved, lessor cannot continue to demand rent when

the lessee no longer has possession of the property.3. A lessor can exercise his privilege to seize any of the non-paying lessee’s movables

found on the premises and either release them on payment of rent or have them sold, Art. 2707-2710

viii. Lessors Privilege 1. Art. 2707 provides, to secure payment of rent, lessor has a privilege over the lessee’s

movables that are found on the leased property; agriculture lease, when lease is based on share of the crop, this privilege includes a security interest in the crop itself.

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2. Sublessee – lessor’s privilege extends to the sublessee’s movbales, but only to the extent that the sublessee is indebted to his sublessor at the time, Art. 2708. The lessor may even seize movables that belong to a third person if they are present upon the leased property, unless he knows that they do not belong to the lessee. TP may recover before judicial sale.

e. Lessee’s Rights and Obligationsi. Lessee’s Obligation to Make Repairs

1. Lessee is bound to repair damage to the thing caused by his fault or that of persons on premises with his consent, and to repair any deterioration resulting from use to the extent that it exceeds the normal or agreed use of the thing.

ii. Lessee’s Right to Make Repairs 1. Lessee may make repairs at his own expense and seek reimbursement, but only if

a. Lessee notifies lessor and provides him reasonable time to make repairsb. Repair was really necessary ANDc. That expended among was necessary and appropriated. The lessee must be prepared to prove all three of these things.

iii. Subleases, Assignments, and Transfers by Lessor or Lessee 1. Any right may be sold, exchanged, or transferred to someone else; if transferred, then the

transferee gets the same rights that the transferor had.2. Art. 2713, like it’s sales counterpart in Art. 2642, addresses freedom of contract; it

stipulates that the lessee has the right to sublease the leased thing or to assign or encumber his rights in the lease, unless expressly prohibited by the contract of lease. Any such prohibitions will be strictly construed against the lessor.

3. Lessor has the right to transfer lease, unless expressly prohibited.4. Art 2712, a third person who acquires an immovable subject to an unrecorded lease is not

bound by the lease, the TP can evict the lessee if so; but since the lease is still in effect, the evicted lessee has a cause of action against the lessor because of the violation of the warranty of peaceful possession.

iv. Attachments, Additions, or Other Improvements to the Leased Thing1. If parties do not agree to contractual provisions, the following rules are default rules,

a. Lessee has the general right to remove improvements- provided he restores leased thing to its former conditions

b. If lessee does not remove, lessor mayi. Appropriate ownership after reimbursing lessee,

ii. Demand removal and restoration, iii. Remove and restore at expense of lessee, iv. Appropriate ownership without reimbursement after additional notice

f. Art. 2668. Contract of Lease Definedi. Lease is a synallagmatic contract by which one party, the lessor, binds himself to give to the other

party, the lessee, the use and enjoyment of a thing for a term in exchange for a rent that the lessee binds himself to pay.

ii. The consent of the parties as to the thing and the rent is essential but not necessarily sufficient for a contract of lease.

g. Kind of contracti. Under Art. 2668, “the lessor binds himself to give the lessee the use and enjoyment of a thing,”

lease is a bilateral contract, meaning that lessor and lessee obligate themselves reciprocally and that the obligation of each is correlative to the obligation of the other

ii. Under Art. 1909, lease is an onerous contract, as both lessor and lessee acquire an “advantage in exchange” for their obligations.

h. Art. 2670. Contract to Lease

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i. A contract to enter into a lease at a future time is enforceable by either party if there was agreement as to the thing to be leased and the rent, unless the parties understood that the contract would not be binding until reduced to writing or until its other terms were agreed upon.

II. Elements of a Leasea. The Thing

i. Art. 2673. The Thing1. All things, corporeal or incorporeal, that are susceptible of ownership may be the object

of a lease, except those that cannot be used without being destroyed by that very use, or those the lease of which is prohibited by law.

b. Rent i. Art. 2675. The Rent

1. The rent may consist of money, commodities, fruits, services, or other performances sufficient to support an onerous contract

ii. Art. 2676. Agreement as to the Rent1. The rent shall be fixed by the parties in a sum either certain or determinable through a

method agreed by them. It may also be fixed by a third person designated by them.2. If the agreed method proves unworkable or the designated third person is unwilling or

unable to fix the rent, then there is no lease.3. If the rent has been established and thereafter is subject to redetermination either by a

designated third person or through a method agreed to by the parties, but the third person is unwilling or unable to fix the rent or the agreed method proves unworkable, the court may either fix the rent or provide a similar method in accordance with the intent of the parties.

iii. Redetermination – when time to renew, the court may take an active role if the third party is unable to fix the rent or parties fail

iv. Upon agreement, rent may also consist of things other than money, such as commodities or fruitsc. Term

i. Art. 2678. Term1. The lease shall be for a term. Its duration may be agreed to by the parties or supplied by

law.2. The term may be fixed or indeterminate. It is fixed when the parties agree that the lease

will terminate at a designated date or upon the occurrence of a designated event.3. It is indeterminate in all other cases.

ii. Art. 2679. Limits of Contractual Freedom in Fixing the Term1. The duration of a term may not exceed ninety-nine years. If the lease provides for a

longer term or contains an option to extend the term to more than ninety-nine years, the term shall be reduced to ninety-nine years.

2. If the term's duration depends solely on the will of the lessor or the lessee and the parties have not agreed on a maximum duration, the duration is determined in accordance with the following Article.

iii. Art. 2680. Duration Supplied by Law; legal term1. If the parties have not agreed on the duration of the term, the duration is established in

accordance with the following rules:a. (1) An agricultural lease shall be from year to year.b. (2) Any other lease of an immovable, or a lease of a movable to be used as a

residence, shall be from month to month.c. (3) A lease of other movables shall be from day to day, unless the rent was

fixed by longer or shorter periods, in which case the term shall be one such period, not to exceed one month.

d. Form i. Art. 2681. Form

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1. A lease may be made orally or in writing. A lease of an immovable is not effective against third persons until filed for recordation in the manner prescribed by legislation.

III. The Obligation of the Lessor and The Lesseea. Principal Obligations

i. Art. 2682. The lessor’s principal obligations1. The lessor is bound:

a. To deliver the thing to the lessee;b. To maintain the thing in a condition suitable for the purpose of which it was

leased; andc. To protect the lessee's peaceful possession for the duration of the lease.

ii. Art. 2683. The lessee’s principal obligations1. The lessee is bound:

a. To pay the rent in accordance with the agreed terms;b. To use the thing as a prudent administrator and in accordance with the

purpose for which it was leased; andc. To return the thing at the end of the lease in a condition that is the same as it

was when the thing was delivered to him, except for normal wear and tear or as otherwise provided hereafter.

b. Delivery i. Art. 2684. Obligations to Deliver the thing at the agreed time and in good condition.

1. The lessor is bound to deliver the thing at the agreed time and in good condition suitable for the purpose for which it was leased.

c. Use of the thing by the Lessee i. Art. 2686. Misuse of the thing

1. If the lessee uses the thing for a purpose other than that for which it was leased or in a manner that may cause damage to the thing, the lessor may obtain injunctive relief, dissolution of the lease, and any damages he may have sustained.

ii. Art. 2687. Damage caused by fault1. The lessee is liable for damage to the thing caused by his fault or that of a person who,

with his consent, is on the premises or uses the thing.iii. Art. 2688. Obligation to inform lessor

1. The lessee is bound to notify the lessor without delay when the thing has been damaged or requires repair, or when his possession has been disturbed by a third person. The lessor is entitled to damages sustained as a result of the lessee's failure to perform this obligation.

d. Alterations, Repairs, and Additions i. Art. 2690. Alterations by the lessor prohibited

1. During the lease, the lessor may not make any alterations in the thing.ii. Art. 2691. Lessor's obligation for repairs

1. During the lease, the lessor is bound to make all repairs that become necessary to maintain the thing in a condition suitable for the purpose for which it was leased, except those for which the lessee is responsible.

iii. Art. 2692. Lessee's obligation to make repairs1. The lessee is bound to repair damage to the thing caused by his fault or that of persons

who, with his consent, are on the premises or use the thing, and to repair any deterioration resulting from his or their use to the extent it exceeds the normal or agreed use of the thing.

iv. Art. 2693. Lessor's right to make repairs1. If during the lease the thing requires a repair that cannot be postponed until the end of the

lease, the lessor has the right to make that repair even if this causes the lessee to suffer inconvenience or loss of use of the thing.

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2. In such a case, the lessee may obtain a reduction or abatement of the rent, or a dissolution of the lease, depending on all of the circumstances, including each party's fault or responsibility for the repair, the length of the repair period, and the extent of the loss of use.

v. Art. 2694. Lessee's right to make repairs1. If the lessor fails to perform his obligation to make necessary repairs within a reasonable

time after demand by the lessee, the lessee may cause them to be made. The lessee may demand immediate reimbursement of the amount expended for the repair or apply that amount to the payment of rent, but only to the extent that the repair was necessary and the expended amount was reasonable.

vi. Art. 2695. Attachments, additions, or other improvements to leased thing1. In the absence of contrary agreement, upon termination of the lease, the rights and

obligations of the parties with regard to attachments, additions, or other improvements made to the leased thing by the lessee are as follows:

a. (1) The lessee may remove all improvements that he made to the leased thing, provided that he restore the thing to its former condition.

b. (2) If the lessee does not remove the improvements, the lessor may:i. (a) Appropriate ownership of the improvements by reimbursing the

lessee for their costs or for the enhanced value of the leased thing whichever is less; or

ii. (b) Demand that the lessee remove the improvements within a reasonable time and restore the leased thing to its former condition. If the lessee fails to do so, the lessor may remove the improvements and restore the leased thing to its former condition at the expense of the lessee or appropriate ownership of the improvements without any obligation of reimbursement to the lessee. Appropriation of the improvement by the lessor may only be accomplished by providing additional notice by certified mail to the lessee after expiration of the time given the lessee to remove the improvements.

iii. (c) Until such time as the lessor appropriates the improvement, the improvements shall remain the property of the lessee and the lessee shall be solely responsible for any harm caused by the improvements.

e. Lessor’s Warranty i. Art. 2696. Warranty against vices or defects

1. The lessor warrants the lessee that the thing is suitable for the purpose for which it was leased and that it is free of vices or defects that prevent its use for that purpose.

2. This warranty also extends to vices or defects that arise after the delivery of the thing and are not attributable to the fault of the lessee.

ii. Art. 2697. Warranty for unknown vices or defects1. The warranty provided in the preceding Article also encompasses vices or defects that are

not known to the lessor.2. However, if the lessee knows of such vices or defects and fails to notify the lessor, the

lessee's recovery for breach of warranty may be reduced accordingly.iii. Art. 2699. Waiver of warranty for vices or defects

1. The warranty provided in the preceding Articles may be waived, but only by clear and unambiguous language that is brought to the attention of the lessee.

2. Nevertheless, a waiver of warranty is ineffective:a. (1) To the extent it pertains to vices or defects of which the lessee did not

know and the lessor knew or should have known;b. (2) To the extent it is contrary to the provisions of Article 2004; or

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c. (3) In a residential or consumer lease, to the extent it purports to waive the warranty for vices or defects that seriously affect health or safety.

iv. Art. 2700. Warranty of peaceful possession1. The lessor warrants the lessee's peaceful possession of the leased thing against any

disturbance caused by a person who asserts ownership, or right to possession of, or any other right in the thing.

2. In a residential lease, this warranty encompasses a disturbance caused by a person who, with the lessor's consent, has access to the thing or occupies adjacent property belonging to the lessor.

f. Payment of Rent i. Art. 2703. When and Where Rent is Due:

1. In the absence of a contrary agreement, usage, or custom:a. The rent is due at the beginning of the term. If the rent is payable by intervals

shorter than the term, the rent is due at the beginning of each interval.b. The rent is payable at the address provided by the lessor and in the absence

thereof at the address of the lessee.ii. Art. 2704. Nonpayment of rent

1. If the lessee fails to pay the rent when due, the lessor may, in accordance with the provisions of the Title “Conventional Obligations or Contracts”, dissolve the lease and may regain possession in the manner provided by law.

g. Transfer of Interest by the Lessor or the Lessee i. Art. 2711. Transfer of thing does not terminate lease

1. The transfer of the leased thing does not terminate the lease, unless the contrary had been agreed between the lessor and the lessee.

ii. Art. 2712. Transfer of Immovable Subject to Unrecorded Lease1. A third person who acquires an immovable that is subject to an unrecorded lease is not

bound by the lease.2. In the absence of a contrary provision in the lease contract, the lessee has an action

against the lessor for any loss the lessee sustained as a result of the transfer.h. Leases with Fixed Term

i. Art. 2720. Termination of lease with a fixed term1. A lease with a fixed term terminates upon the expiration of that term, without need of

notice, unless the lease is reconducted or extended as provided in the following Articles.ii. Art. 2721. Reconduction

1. A lease with a fixed term is reconducted if, after the expiration of the term, and without notice to vacate or terminate or other opposition by the lessor or the lessee, the lessee remains in possession:

a. (1) For thirty days in the case of an agricultural lease;b. (2) For one week in the case of other leases with a fixed term that is longer

than a week; orc. (3) For one day in the case of a lease with a fixed term that is equal to or

shorter than a week.iii. Art. 2722. Term of reconducted agricultural lease

1. The term of a reconducted agricultural lease is from year to year, unless the parties intended a different term which, according to local custom or usage, is observed in leases of the same type.

iv. Art. 2723. Term of reconducted nonagricultural lease1. The term of a reconducted nonagricultural lease is:

a. (1) From month to month in the case of a lease whose term is a month or longer;

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b. (2) From day to day in the case of a lease whose term is at least a day but shorter than a month; and

c. (3) For periods equal to the expired term in the case of a lease whose term is less than a day.

v. Art. 2725. Extension1. If the lease contract contains an option to extend the term and the option is exercised, the

lease continues for the term and under the other provisions stipulated in the option.i. Lease with Indeterminate Term

i. Art. 2727. Termination of lease with an indeterminate term1. A lease with an indeterminate term, including a reconducted lease or a lease whose term

has been established through Article 2680, terminates by notice to that effect given to the other party by the party desiring to terminate the lease, as provided in the following Articles.

ii. Art. 2728. Notice of termination; timing1. The notice of termination required by the preceding Article shall be given at or before the

time specified below:a. (1) In a lease whose term is measured by a period longer than a month, thirty

calendar days before the end of that period;b. (2) In a month-to-month lease, ten calendar days before the end of that

month;c. (3) In a lease whose term is measured by a period equal to or longer than a

week but shorter than a month, five calendar days before the end of that period; and

d. (4) In a lease whose term is measured by a period shorter than a week, at any time prior to the expiration of that period.

2. A notice given according to the preceding Paragraph terminates the lease at the end of the period specified in the notice, and, if none is specified, at the end of the first period for which the notice is timely.

iii. Art. 2729. Notice of termination; form1. If the leased thing is an immovable or is a movable used as residence, the notice of

termination shall be in writing. It may be oral in all other cases.2. In all cases, surrender of possession to the lessor at the time at which notice of

termination shall be given under Article 2728 shall constitute notice of termination by the lessee.

IV. The Renta. Benglish Sash & Door Co., v. Leonards, 1980

i. Holding – upheld the contract of sale, notwithstanding the parties’ failure to set a price at the time of the sale

ii. Reasoning – SC relied on prior history of dealings between the parties and the fact that the defendant did not object to the price that was charged.

b. Willis v. Ventrella, 1996 [hunting lease, bulldozer, not enough work done]i. Holding: Lease is unenforceable for lack of price

ii. Reasoning: The lease provided that the dozer work was to be done “at the direction of the lessor”; the court sides with the TC saying this substitution of a price paid in money is not readily ascertainable, as the essential element of a certain and determinate price was absent, leaving the lease unenforceable

c. T.B. Guillory Inc. v. North American Gaming Entertainment Corp., 1999 [Truck stop poker lease; option to extend lease, lessor reserves right to negotiate rent]

i. Holding: TC affirmed; option lacks a determinable price

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ii. Reasoning: Provisions removing the determination of rent from the parties’ control are not present in this contract.

V. Consenta. Faroldi v. Nungesser, 1962

i. Holding: TC reversed; P’s have failed to establish their claim to that degree of certainty which would entitle them to recovery. No meeting of the minds

VI. Nature of the Contracta. Generally – Art. 2671 lists several kinds of leases: residential leases, agriculture leases, mineral lease,

and a consumer lease, but the list is not exclusive. Art. 2713 stipulates that the lessee has a right to sublease the thing, unless the contract prohibits it.

b. Means v. Comcast, Inc., 2009 [Comcast antenna; Comcast tries to renew, new owner of property tries to evict]

i. Holding: TC affirmed rejecting Mean’s claim to evict Comcast ii. Reasoning: Means allowed Comcast to keep its equipment on the property, advised Comcast to

pay him all future rent, and accepted several years’ rent.c. Phoenix Assoc. Land Syn., Inc. v. E.H. Mitchell & Co., LLC, 2007 [sand and gravel pit; Phoenix tries to

sublease property per “operating agreement” in violation of lease]i. Issue: Was the “operating agreement” b/t Phoenix and TP’s a sublease in violation of contract b/t

Phoenix and Mitchell?ii. Holding: TC affirmed, the operating agreement was a sublease, in violation of the lease

agreement. iii. Law: Phoenix, pursuant to its mineral lease with Mitchell, possessed no authority to create real

rights or personal servitudes on Mitchell’s property in favor of a TP. The operating agreements imposed charges on Mitchell’s land less than full enjoyment, signifying a right of use, which is a personal servitude. This created a dismemberment of the ownership of Mitchell’s land whether by lease or by personal servitude.

VII. Duration a. Comegys v. Shreveport Kandy Kitchen, 1926 [lessor privilege over lessee property v. chattel mortgagee]

i. Holding: the privilege of the lessor upon the lessee's property for accrued rent was superior to the mortgagee's lien.

ii. Reasoning: The privilege of the lessor upon the lessee’s property for accrured rent is superior to the chattel mortgage holder b/c it is older. Under La. Civ. Code Ann. art. 2689, when the lessee, without any opposition from the lessor, continued to occupy the premises after the lease expired, the lease was presumed to have been continued, and the lessee could not be evicted without notice. Thus, a tacit reconduction took place, and the old lease continued. If neither party acts after the conventional lease has expired, the original contract is continued from month to month, terminable at the option of either party by simply giving notice. It is not a new contract or a renewal of the old contract, it is merely a tacit reconduction of the original contract with the term thereof changed, by operation of law

VIII. Dissolutiona. Lafayette Realty Co. v. Travia, 1913 [P failed to make repairs to the premises; D vacates]

i. Holding – Must give written notice to lessor to vacate; the failure of the landlord to repair is not cause for the annulment of the lease. The remedy of the lessee is to call upon the landlord to make the repairs, and if he fails to do so, to make them himself at the landlord's expense.

b. Purnell v. Dugue, 1930 [tenant rented apartment, heating not adequate, lessor doesn’t fix, lessee leaves]i. Holding: The reasonable adequacy of the heating system was warranted, and the tenant was

within his rights to abandon the premises. The tenant was not obligated to install additional heaters himself and deduct the cost from the rent due. It was the landlord's obligation to remedy defects.

c. Lucky v. Encana Oil & Gas, 2012 [lessee assigns rights to assignee, lessor alleges breach, sends letter to assignee, not lessee]

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i. Holding The trial court held, and the court agreed, that the lessor's lawsuit against the lessee was premature because the lessor was contractually bound to first notify the lessee of any breach and to give the lessee 60 days within which to comply. The August 2008 letter to the assignee was not sufficient because the lease provision clearly envisioned notice provided by the lessor to the lessee.

I. The Lessor’s Rights and Obligationsa. Pontalba v. Domingon, 1837 [D rents house from P. D’s find their stay inconvenient while the repairs are

ongoing, turn keys over to workmen, and refuse to return]i. Holding: TC for defendants, reversed.

ii. Reasoning: the repairs were necessary and the lessee was bound to suffer them, and D was entitled to no allowance thereof, except a suspension of the rent during the time he could leave the house.

I. Lessor’s Implied Warranty Against Vices and Defects and Waiver thereofa. Great American Surplus Lines Ins. Co., v. Bass, 1986 [electrical fire; Caribbean to maintain electrical,

Bass knows of electrical defect, and sends someone to try to fix]i. Holding: The lesser-owner knew or should have known of the defects and is liable for the

damages suffered by Caribbean.ii. Reasoning: pertinent statute provides that the lessee who assumes responsibility for the premises

can not recover from the owner for any injury caused by defects therein, unless the owner knew or should have known of the defect or had received notice thereof and failed to remedy it w/n a reasonable time. Even if Caribbean assumed responsibility for the electricity, the record is replete with evidence that the lessor continued to be involved with the electrical problems encountered by Caribbean. The lesser-owner knew or should have known of the defects and is liable for the damages suffered by Caribbean.

b. Tassin v. Slidell Mini-Storage, 1981 [P rents mini-storage from D, unit floods b/c of poor construction; D ties to contract away liability]

i. Holding: TC rules in favor of P, CA, rules in favor of D, SC reverses CA and rules for Pii. Reasoning: Even though the lessee assumed responsibility for water damaged caused by vice or

defect in the premises, LARS: 9:3221did not relieve the lessor’s of the responsibility imposed on them by Art. 2696 because they should have known of the defects in the premises. Despite the fact that lessor tried to contract himself out of liability for damage which occurred to lessee’s property, lessor cannot

c. Stuckey v. Riverstone Residential, 2009 [P enters residential lease w/ D, contract states possible mold problems, how to avoid problem, D contracts away liability]

i. Holding: D summary judgment affirmed; P fails to meet their burden to show that D’s knew of mold at the time of lease, and failed to remedy the problem during the lease.

ii. Reasoning: D’s did not know and did not have reason to know of the alleged mold until their receipt of P’s letter, at which time D sought to investigate and remedy their claim in a reasonable amount of time; furthermore, D’s offered P a new unit while investigation was under way and they refused.

II. Peaceful Possessiona. Kennan v. Flannigan, 1925 [lower tenants drunk and playing loud music all night, lessor does nothing to

remedy situation]i. Holding: TC and CA affirmed, judgment for plaintiff

ii. Reasoning: when the landlord was notified that the manner in which the tenant in the lower apartment was using the premises was a continuing disturbance of the peaceable possession of the tenant in the upper apartment, the landlord had no more right to sanction or tolerate such violation of his contract with the tenant in the lower apartment than he had to authorize the disturbance.

III. Lessor’s Remediesa. Henry Rose Mercantile & Mfg. Co. v. Stearns, 1923 [P evicts D from warehouse lease and seizes

movables]

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i. Holding: Reduced amount owed to plaintiff ii. Reasoning: the action of P and sheriff resulted in the eviction of the D, and since P is

responsible thereof, D is entitled to have his lease dissolved, and to the rejection of P’s demand for the rent accruing after eviction. Had the P waited a different outcome would have occurred.

II. Lessor’s Privilegea. Acadiana Bank v. Foreman, 1977 [bank and intervener fight over chattels; lessor enters into new lease

with defendant, which restarts the lease]i. Holding: TC and CA affirmed. Bank’s chattel mortgage primed lessor’s privilege.

ii. Reasoning: If one lease is superseding by another lease, the effectiveness of the old lessor’s privilege ends and a new lessor’s privilege arises. The lessor’s privilege is predicated upon a lease; therefore, it must be a particular lease. Consequently, if either by agreement or operation of law there comes into existence a new lease, that also means a new privilege with a new date of creation. Thus, if the lessor and lessee, under a monthly lease for an indefinite term, agree upon a change in the rent, they are deemed to have made a new lease. This means that a chattel mortgage which came into existence after the first lease but before the new lease thereby moves into first rank ahead of the lessor’s privilege.

I. The Lessee’s Rights and Obligationsa. Subleases, Assignments, and Transfers by Lessor

i. Caplan v. Latter & Blum, 1985 [lessor cannot reasonably refuse sublease of lessee]1. Holding: TC and CA were wrong in finding that P was justified in refusing to consent to

the sublease2. Reasoning: P’s excuses as to no sublease were invalid. The sublessee’s financial status

was immaterial because the lessee would have remained bound for the rent. P refused to consent to sublease in order to negotiate a new lease with Lessor on more favorable terms. However, Lessor guarded against this by including language which stated Lessor could not unreasonably refuse sublease.

b. Removal of Improvements and Additionsi. Riggs v. Lawton, 1957 [P rents room from D, builds addition to room with D’s consent, moves

out, wants money he spent on improvements]1. Holding: TC and CA reversed, P’s demands rejected. Should have not appealed, would

have been able to keep the little money that was awarded by TC and CA. 2. Reasoning: Art. 2695 applies instead of Art. 508, which deals with good faith and bad

faith possessors. Lessor has no need for the improvements and were made solely for the convenience of the Plaintiff. Lessor seeks lessee to remove the additions and leave the house in the state, which the lessee found it. As such, since the lessor has not elected to retain the improvements, lessee cannot recover their fair value. However, lessor consented to the improvements, to the condition in which the premises lay at the time of the lease, and by doing so the lessee was released from the obligation to return the premises to the same state in which the lessee received them. Lessor not entitled to order removal of additions at lessee’s expense.

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