Gruning Sales Leases Loyola Fall 2012

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Sales & Leases Professor Gruning

Loyola College of Law Fall 2012
Louisiana Law of Sale and Lease
I.
II.
III.
IV.
V.
VI.
VII.
The Nature and Perfection of contracts of sale

a. Distinguishing contracts from others
Perfection of Sale
a. Price
i. Left to 3rd parties
ii. No price fixed by parties
iii. Lesion beyond moiety
b. Thing
i. Hope v. future
ii. Things in commerce
iii. Things that cannot be sold
1. Things of another
2. Litigious rights
3. Litigious redemption
c. Consent
i. Implied and express consent
1. Benglish
Form
a. Movables
b. Immovables
c. Sufficiency of description
d. Mandate and other ancillary contracts
Agreements Preparatory to the Sale
a. Unilateral Promises to Sell
i. The option
ii. Right of First Refusal
iii. Special prescriptive periods for
options, rights of first refusal
and rights of redemption
b. Bilateral Promises to Sell
i. Earnest Money v, Deposit
ii. Destruction of thing
iii. Implied warranty of
merchantability
Transfer of Title and Risk
a. Appropriation or individualization
b. Transfer of risk
c. Things in transit
Sales Subject to Conditions
a. Inspection by the buyer v. view and trial
b. Other implicit resolutory conditions
c. Common law conditional sales
d. The bond for deed contract
Effect of sale on third party
VIII.
IX.
X.
XI.
XII.
a. Movables and the Bona Fide Purchaser

Doctrine
i. Lost or stolen things
ii. Registered movables
b. Immovables: The Public Records
Doctrine
Sellers Obligation of Delivery and Warranty
Against Eviction
a. Delivery of the thing
b. Warranty against eviction
Sellers Obligation for Redhibition, Fitness,
and Thing not of Kind
a. Limitations on redhibition: Sellers right
to an opportunity to repair
b. Liability of seller for redbihibitory
defect: good faith and bad faith
c. Waiver of warranty
d. Subrogation
Elements of a Lease
a. The Thing
b. Rent
c. Consent
d. Term
i. Fixed term
ii. Indeterminate term
1. Reconduction
Obligations of the Lessor
a. Deliver the thing to the lessee
b. Maintain the thing in a condition
suitable for the purpose of which it was
leased
c. Warrant the thing against vices/defects
d. Protect lessees peaceful possession
Obligations and rights of Lessee
a. Pay the rent
b. Use thing as a prudent administrator &
in accordance w/ purpose which leased
c. Return thing in condition leased, except
for normal wear and tear
d. Removal of improvements/additions
e. 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 Sale

a. 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 partys 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 Contracts
1. 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 contract
2. 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 end
3. 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 LA
c. If you are a seller, you dont 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 its a sale,
the seller cant 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
iii. Sale Distinguished from Security Device (Pledge and Mortgage)
1. Nature and requirements of security devices
a. Personal security: suretyship
b. Real security: pledge and mortgage
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c. 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 bank
ii. 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 transferred
1. 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 Capacity
1. 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.
7. Banks v. Hyde, 1840 [public auction; TP acting at Ps 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 [Ps son buys car, gets in fatal
wreck; sale to son absolutely null?]
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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.
III.
Consent
a. 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.
Perfection of Sale Price
a. Price as Distinguishing Sale from other kinds of Contracts
i. Art. 2464. Price, essential elements
1. 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 parties
1. 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 Contracts
i. 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 doesnt get screwed
ii. Benglis Sash & Door Co. v. A.P. Leonards, 1980 [windows 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. OShee, 1904 [P & D agree that estimators should agree on the price
of timber for sale; such sale valid?]
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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. OShee 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 of fair market value
1. 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 the value of the
immovable, and only for one year after the date of the sale.
iii. Article 2589: Rescission for lesion beyond moiety
1. 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 lesion
1. 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 seller
1. 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.
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 immovable
1. 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 lesions
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1. 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, 1984
1. 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.
II.
Perfection of Sale The Thing Sold

a. 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 sold
i. 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 hope
i. 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
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.
Sale of a Hope versus Sale of a Future Thing
a. 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
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III.
IV.
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
Things in Commerce
a. 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
interest prescribes for non-use.
Things that may NOT be Sold
a. 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 Rights
i. Art. 2447. Sale of Litigious rights, prohibitions
1. Officers of a court, such as judges, attorneys, clerks, and law enforcement agents,
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
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 Redemption
i. 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 filed
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3. 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 $10
2. 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.
Movables
a. 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 Rule
i. 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.
ii. Per Gruning:
1. Parol Evidence
2. 4 corners
3. Simulations
4. Counter-letter
5. 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 writings
2. 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
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II.
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.
Immovables
a. 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
stolen
2. 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 parties
d. 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 law
i. 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.
g. Art. 1833. Authentic act
i. 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 handprinted 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 authentic
i. 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.
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j.
k.
l.
m.
n.
o.
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.
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 Mitchells 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
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.
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 writing
2. 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)
Mathews v. Mathews (Simulations, donations in disguise, authentic act) [two brothers fight over mothers
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.
Simulation
i. 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:
10
1. Dress up a donation in the clothes of a sale; relative simulation, it WILL transfer

ownership
2. Must show grantors donative intent
3. If dressed up as sale, to be valid, it must be an authentic act, generally it will be found
valid
iv. 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 grantors 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 Description
i. 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 3 rd
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 installments
1. 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
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 Contracts
i. 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 situation
1. 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
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I.
Unilateral Promises to Sell

a. 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.
b. The Right of First Refusal
i. 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 acceptance
1. 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 years
vi. 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
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II.
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 Publg 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
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.
Bilateral Promise to Sell
a. 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 merchantability
d. Damages a party may demand specific performance, however, LA courts generally prefer to award
damages over specific performance
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III.
IV.
e. 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. Defendants 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. Louisianas parol evidence rule is not substantive law, but rather a rule of evidence.
Earnest Money v. Deposit
a. Art. 2624. Deposit, Earnest Money Gruning goes over a lot
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.
Destruction of the Thing
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V.
I.
a. 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.
Implied Warranty of Merchantability
a. 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 Ds 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
Transfer of Title and Risk
a. 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. Sellers 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. Buyers 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 risk
1. 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 ownership
1. 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 individualized
15
1. 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 sales
1. 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 checks
b. 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 trial
1. 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
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 accessories
1. 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 Individualization
i. Edgwood Co. v. Falkenhagen, 1922 [20 barrels of whisky, P drew them from stock, & put them
aside until delivery, D writes that hes 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 plaintiffs 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.
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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 3 rd 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.
c. Transfer of Risk
i. 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 buyers duty
to take delivery where the goods are, unless contract says otherwise
d. Things in Transit
i. 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 doesnt deal with money, its 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 transit
1. 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 loss
1. 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.
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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 documents
1. 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 sellers
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.
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 Chryslers 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 General
a. 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: buyers right to inspection
b. 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 conditions
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II.
i. 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 party
i. 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
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 occur
i. 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 purchasers 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.
Inspection by the Buyer v. View and Trial
a. 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.
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III.
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 things
3. 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
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 Nonconformity
i. Upon rejection of nonconforming things by the buyer, the seller may cure the nonconformity
when:
1. The time for performance has not yet expired or
2. 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 tribes 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, Bertalottos inspection is more appropriately classified as
an exercise of any buyers 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 buyers 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 buyers 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.
Other Implicit Resolutory Conditions
a. 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.
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IV.
V.
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.
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 doesnt 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: sellers refusal to accept the buyers 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 jewelers 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 shouldnt be a problem
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.
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 escrow
b. 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
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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
as of the time of the sale. The care, custody, and control of property were transferred to Bertucci
at that time. Worleys 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 immovable
1. 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 movable
1. 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 thing
1. 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 Question
a. 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)
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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 GRUNING
1. 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
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 or
b. 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 movables
1. 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 possession
x. 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 Things
i. 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 Smiths 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
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II.
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.
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 plaintiffs 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 Frantzs mandate in this situation? No, b/c he had no power to
sell below $502 & $975 and thats 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 merchant
g. 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 plaintiffs 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.
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 Principals
i. 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, 3 rd
party cannot rely implicitly on what is shown in a recorded instrument.
d. The Collision between the public records doctrine and other Protected Interests
i. The Public Records Doctrine and Rights of Spouses in Community
24
1. Generally a spouse can defeat the public records doctrine if the third party is not in
good faith.
Sellers Obligation of Delivery and Warranty Against Eviction
I.
II.
Generally
a. Seller has two principal obligations: delivering the thing and warranting the thing he sells
b. The Three Types of Warranties
i. Warranty Against Eviction
ii. Warranty Against Redhibitory Defect
iii. Warranty That the Thing is Fit for Ordinary Use / Non-Conforming
Delivery Code Articles
a. Art. 2474. Construction of ambiguities respecting obligations of seller
i. 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 warranty
i. 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 use
c. 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 thing
c. 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 simulation
i. 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 delivery
i. 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 delivery
i. 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 (Buyers 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 (Sellers 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 Thing

a. 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 Sold
i. 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 Measure
i. 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 Price
1. 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
b. Recede from the contract
iii. Art. 2495. Sale of a Certain and Limited Body [SALE of AVERSIONEM]
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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 sellers 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 Immovables
i. 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 Sold
i. 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 Measure
i. 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 1/20 th. 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.
IV.
Warranty Against Eviction Code Articles

a. Per Gruning Degrees of Warranty
27
b.
c.
d.
e.
f.
g.
h.
i. With warranty
ii. Increase of limit warranty
iii. Exclude warranty
iv. Peril and risk
v. Quit claim
Art. 2500. Eviction, definition, scope of warranty
i. 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.
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 afteracquired title of the transferor does not inure to the benefit of the transferee.
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.
Art. 2506. Rights of buyer against seller in case of eviction
i. 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.
Art. 2507. Restitution of full price despite deterioration, deduction of damage when benefit to buyer
i. 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.
Art. 2509. Reimbursement to buyer for useful improvements, liability of seller in bad faith
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.
Art. 2511. Partial eviction, rights of buyer
i. 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.
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i.
V.
Art. 2512. Warranty against eviction from proceeds

i. 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 rights
i. 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 possession
i. 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 payment
i. 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.
Warranty Against Eviction
a. General Concepts, Warranted Rights, and Loss or Danger that Constitutes Eviction
i. Richmond v. Zapata Development Corp. [Cajun Christmas tree, didnt 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 buyers
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 Eviction
i. Kling v. Mclin, 1981 [cant obtain title b/c lien]
1. Reasoning: seller has two principal obligations, delivery and warranty. Warranty has
two objects, buyers 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]
1. Holding: The court says Bankstons 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 Buyers Peril and Risk
i. 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
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the sale is w/o warranty and at the buyers 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 risk
c. The sellers 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 contrary
iii. New Orleans & Carrollton RR. V. Jourdains 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 vendors 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 sellers
warranty against eviction to be excluded:
1. The contract may declare that the buyer is buying at his own risk and peril
2. 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 eviction
v. 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. ONeal [seller is liable for an eviction that is occasioned by his own act, and any
agreement contrary is null] [example of buyers 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 Deed
i. 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 hell have no recourse against the seller.
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: Ps argument that the property returned by operation of law to Briants
patrimony is wholly w/o merit. Since they have no title, Ps 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 Tanners lost their interest in the
30
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 doesnt 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 Eviction
i. 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, 1928
1. 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 plaintiffs 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 Johnsons successors.
f. Subrogation
i. 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 sellers 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 plaintiffs that the
things old was free from defect. The plaintiffs were subrogated to the Smiths 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.
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 Contract

a. 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 situations
c. 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.
31
e.
f.
g.
h.
i.
j.
k.
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.
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.
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 first
ii. 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 buyer
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 thing
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.
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
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
Redhibition Code Articles
i. 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
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 apparent
1. 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 defect
1. 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
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iv.
v.
vi.
vii.
viii.
ix.
x.
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.
Art. 2530. Defect must exist before delivery
1. 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.
Art. 2531. Liability of seller who knew not of the defect
1. 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.
Art. 2534. Prescription
1. 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.
Art. 2537. Judicial Sales
1. Judicial sales resulting from a seizure are not subject to the rules on redhibition
Art. 2538. Multiple sellers, multiple buyers, successors
1. 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.
Art. 2540. Redhibitory vice of one of several matched things sold together
1. 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.
Art. 2541. Reduction of the price
1. 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.
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II.
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; subrogation
1. 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 Use
i. 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 Contract
i. 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.
General Principles
a. Nelson Radiology Associates, LLC v. Integrity Medical Systems [gets 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
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 Ps
intended purpose and says it will work, it doesnt]
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 plaintiffs 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 plaintiffs 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.
34
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.
II.
Limitations on Redhibition: the Sellers Right to an Opportunity to Repair

a. Generally Art. 2522 and 2534 apply here
b. Queral v. Latter & Blum, Inc., 2010 [P was told that the house was on pilings, and it wasnt]
i. Reasoning: The court finds that the plaintiffs 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.
Liability of Seller for Redhibitory Defects Good Faith and Bad Faith
a. 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.
Lease
I.
General Provisions
a. 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 term
a. Agricultural lease year to year
b. Immovable or movable used as a residence month to month
c. 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 month
35
b. 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. Dissolution
i. Ways in which a lease may terminate:
1. Misuse of the thing, Art. 2686
a. 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 thing
2. Nonpayment of rent, Art. 2704
3. Expropriation; loss or destruction, Art. 2714; partial destruction, Art. 2715
4. Termination of lease granted by a usufructuary, Art. 2716
5. Death of lessor or lessee, Art. 2717
6. Leases with reservation of right to terminate, Art. 2718
7. Termination of lease with an indeterminate term, Art. 2727; Notice of termination, timing
d. The Lessors Rights and Obligations
i. The Obligation to Deliver
1. The lessor is bound to deliver the premises leased to the lessee
2. 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 sum
ii. Lessors Obligations to Maintain and Repair
1. Lessors 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 lease
iv. Lessors 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 partys fault or responsibility for the
repair, the length of the repair period and the extent of the loss of use.
v. Lessors 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:
36
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 lessees 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. Damages
b. Injunctive relief
c. Dissolution
vii. Lessors 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-payment
2. 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 lessees movables found
on the premises and either release them on payment of rent or have them sold, Art. 27072710
viii. Lessors Privilege
1. Art. 2707 provides, to secure payment of rent, lessor has a privilege over the lessees
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.
2. Sublessee lessors privilege extends to the sublessees 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. Lessees Rights and Obligations
i. Lessees 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. Lessees 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 repairs
b. Repair was really necessary AND
c. That expended among was necessary and appropriate
d. 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 its 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.
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II.
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 Thing
1. 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 may
i. 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 Defined
i. 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 contract
i. 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
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.
Elements of a Lease
a. The Thing
i. Art. 2673. The Thing
1. 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 Rent
1. 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 fruits
c. Term
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III.
i. Art. 2678. Term

1. 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 Term
1. 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 term
1. 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
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.
The Obligation of the Lessor and The Lessee
a. Principal Obligations
i. Art. 2682. The lessors principal obligations
1. 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; and
c. To protect the lessee's peaceful possession for the duration of the lease.
ii. Art. 2683. The lessees principal obligations
1. 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; and
c. 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 fault
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1. 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 repairs
1. 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 repairs
1. 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.
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 repairs
1. 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 thing
1. 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.
40
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. Lessors 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 defects
1. 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
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 possession
1. 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 Lease
1. 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 term
41
i.
1. 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; or
c. (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 lease
1. 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;
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. Extension
1. 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.
Lease with Indeterminate Term
i. Art. 2727. Termination of lease with an indeterminate term
1. 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; timing
1. 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; form
1. 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.
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IV.
V.
VI.
VII.
The Rent
a. 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
ii. Reasoning: Provisions removing the determination of rent from the parties control are not
present in this contract.
Consent
a. Faroldi v. Nungesser, 1962
i. Holding: TC reversed; Ps have failed to establish their claim to that degree of certainty which
would entitle them to recovery. No meeting of the minds
Nature of the Contract
a. 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 Means 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 TPs 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 Mitchells property in favor of a TP. The operating agreements
imposed charges on Mitchells land less than full enjoyment, signifying a right of use, which is a
personal servitude. This created a dismemberment of the ownership of Mitchells land whether
by lease or by personal servitude.
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 lessees 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
43
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.
I.
I.
Dissolution
a. 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 doesnt 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]
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.
The Lessors Rights and Obligations
a. Pontalba v. Domingon, 1837 [D rents house from P. Ds 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.
Lessors Implied Warranty Against Vices and Defects and Waiver thereof
a. 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 P
ii. Reasoning: Even though the lessee assumed responsibility for water damaged caused by vice or
defect in the premises, LARS: 9:3221did not relieve the lessors 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 lessees
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 Ds knew of
mold at the time of lease, and failed to remedy the problem during the lease.
ii. Reasoning: Ds did not know and did not have reason to know of the alleged mold until their
receipt of Ps letter, at which time D sought to investigate and remedy their claim in a reasonable
44
II.
III.
II.
I.
amount of time; furthermore, Ds offered P a new unit while investigation was under way and
they refused.
Peaceful Possession
a. 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.
Lessors Remedies
a. Henry Rose Mercantile & Mfg. Co. v. Stearns, 1923 [P evicts D from warehouse lease and seizes
movables]
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 Ps demand for the rent
accruing after eviction. Had the P waited a different outcome would have occurred.
Lessors Privilege
a. 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. Banks chattel mortgage primed lessors privilege.
ii. Reasoning: If one lease is superseding by another lease, the effectiveness of the old lessors
privilege ends and a new lessors privilege arises. The lessors 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 lessors privilege.
The Lessees Rights and Obligations
a. 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 sublease
2. Reasoning: Ps excuses as to no sublease were invalid. The sublessees 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 Additions
i. Riggs v. Lawton, 1957 [P rents room from D, builds addition to room with Ds consent, moves
out, wants money he spent on improvements]
1. Holding: TC and CA reversed, Ps 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 lessees expense.
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Sales & Leases Professor Gruning

The Nature and Perfection of contracts of sale

a. Movables and the Bona Fide Purchaser

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The Nature and Perfection of the Contract of Sale

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c. Mortgage: Mortgage is a nonpossessory right created over property to secure

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Perfection of Sale The Thing Sold

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1. Dress up a donation in the clothes of a sale; relative simulation, it WILL transfer

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Unilateral Promises to Sell

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Sales Subject to Conditions

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Delivery of the Thing

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Warranty Against Eviction Code Articles

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Art. 2512. Warranty against eviction from proceeds

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Redhibition, Fitness, and Things Not of Kind Specified in the Contract

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Limitations on Redhibition: the Sellers Right to an Opportunity to Repair

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1. (1) To the extent it pertains to vices or defects of which the

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i. Art. 2678. Term

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