LA Bar Contracts and Sales 2 — Questions and Answers
Question 1: Under Louisiana Civil Code Article 1949, error vitiates consent only when it concerns:
- Any factual mistake made during negotiations
- A cause without which the obligation would not have been incurred (Correct answer)
- Only mistakes of law, not fact
- The market value of the subject matter
Correct answer: A cause without which the obligation would not have been incurred
Article 1949 limits annulment to errors that concern a cause of the obligation that was known or should have been known to the other party.
Question 2: A third-party beneficiary contract under Louisiana law is called a:
- Delegation of performance
- Novation
- Stipulation pour autrui (Correct answer)
- Assignment of rights
Correct answer: Stipulation pour autrui
A stipulation pour autrui (La. CC Art. 1978) creates a contractual benefit for a third party who may accept and enforce it directly.
Question 3: Under Louisiana Civil Code, 'cause' of an obligation means:
- The factual background leading to the contract
- The reason each party obligates themselves — the counterpart of the other's obligation (Correct answer)
- The physical description of the goods or services
- The method of payment chosen by the parties
Correct answer: The reason each party obligates themselves — the counterpart of the other's obligation
Cause (La. CC Art. 1967) is the reason a party incurs an obligation, typically the other party's undertaking in synallagmatic contracts.
Question 4: A resolutory condition in a Louisiana contract operates to:
- Suspend the obligation until the condition is fulfilled
- Extinguish an existing obligation if the condition occurs (Correct answer)
- Render the contract void from inception
- Require court approval before the contract takes effect
Correct answer: Extinguish an existing obligation if the condition occurs
Under La. CC Art. 1767, a resolutory condition terminates an already-effective obligation upon the occurrence of a future uncertain event.
Question 5: Under Louisiana Civil Code Article 2589, lesion beyond moiety entitles a seller of an immovable to seek rescission when the seller received less than:
- One-quarter of the fair market value
- One-half of the fair market value (Correct answer)
- Two-thirds of the fair market value
- Any amount below appraised value
Correct answer: One-half of the fair market value
Lesion beyond moiety applies when a seller of an immovable receives less than half the fair market value, allowing rescission or supplementation of price.
Question 6: Which of the following contracts under Louisiana law must be in writing to be enforceable?
- A contract for the sale of movables worth $500
- A contract for the sale of immovable property (Correct answer)
- A month-to-month lease of a movable
- A services contract for exactly six months
Correct answer: A contract for the sale of immovable property
La. CC Art. 1839 requires that a transfer of immovable property be in writing; oral sales of immovables are unenforceable.
Question 7: Under Louisiana Civil Code, fraud as a vice of consent requires proof of:
- A material misrepresentation that induced the other party to contract (Correct answer)
- Any false statement made at any point during negotiations
- A written fraudulent document signed by both parties
- Quantifiable financial damages caused by the misrepresentation
Correct answer: A material misrepresentation that induced the other party to contract
La. CC Art. 1953 defines fraud as a misrepresentation or suppression of the truth made to obtain consent, which must actually induce the party to contract.
LA Bar Contracts and Sales 2
Under Louisiana Civil Code Article 1949, error vitiates consent only when it concerns: