MULTIPLE CHOICE

Suspensive Condition Plaintiff Corporation attempted to transfer property in the amount of $100,000 cash to the Defendant Buyer. Both parties signed a purchase agreement, however, the transfer of property was subject to the condition that the Corporation's Advisory Board approved the transfer. Prior to the Board's hearing, the Buyer attempted to withdraw from the agreement. The Board would have approved the Plaintiff, but was without power to prevent the Defendant from withdrawing from the agreement. Plaintiff brought suit to enforce the agreement. How is the court likely to rule? The original agreement is binding. However, because the condition was not accomplished, the Defendant is not bound to the agreement. Although this contract was subject to a suspensive condition, a contract of which a condition forms a part, is complete by the assent of the parties and upon completion of that condition. The original agreement is binding, and the condition is considered accomplished because the defendant who was bound under that condition has prevented the accomplishment. The original agreement is not binding because the defendant prevented the accomplishment of the condition.

(C) The condition would be considered accomplished or fulfilled creating a binding agreement because when the fulfillment of the condition of a contract is prevented by the party contrary to the fulfillment, a condition is to be regarded as fulfilled. The contract was contingent on this suspensive condition, however both parties agreed to this contract and the defendant prevented the plaintiff from being able to fulfill this suspensive condition. The defendant prevented the fulfillment of the condition, having the Board approve the Plaintiff for transfer, by withdrawing from the agreement before the Board could do the approval. Therefore, the condition is considered accomplished. This hypo is in congruence with Article 1772 and George v. Garig, 226 La. 117, 75 So. 2d 28 (1954).

CONSENT-OFFER A home owner placed an advertisement online to sell a laptop. The advertisement read "LIKE NEW APPLE LAPTOP FOR SALE. $700 OBO. FIRST TO BRING ME MONEY OR MAKE ME A REASONABLE OFFER at 345 MACINTOSH CT., BATON ROUGE GET IT. CONTACT ME AT (225) 123-4567." If an individual were to show up at the house to purchase the laptop, cash in hand, would the home owner be able to refuse? No, the advertisement online constituted an offer, the wording of which denotes to the reader a bona fide bargain offer. No, the owner would have to accept the individual's counteroffer as he drove all the way over to the house. Yes, the offer clearly states that the individual must contact the owner prior to coming over. Yes, the advertisement online was not definite enough to constitute a legal offer.

ANSWER (D) He could refuse bc the ad was not definite enough. In Louisiana...an advertisement may constitute an offer, acceptance of which will consummate a contract and create an obligation in the offeror to perform according to terms of the published offer. However, to be a considered as an offer, the wording must denote to the reader a bona fide bargain offer, and must be certain and definite enough to constitute a legal offer. In the question above, the terms laid out in the advertisement were not certain and definite enough so as to constitute a legal offer due to a few different aspects, the main of which was the price. The stating of "OBO" shows that the price itself was not definite and suggested it to be a mere advertisement for negotiations instead of a definite sale price. Another aspect that would need to change would be the line concerning the payment where, again, the seller mentioned the reasonable offer that was permitted under the offer. Additionally, the advertisement was not specific as to the exact laptop that was for sale. The mention that it was an apple laptop means that the reader would not know which model or year in which it was manufactured, both of which would be important in making a determination as to the price a potential buyer would offer.

A country singer with a new album, Swift Taylor, needs to promote the album and make as many record sales as she can. Taylor's manager, knowing that the best promotion is doing shows, engaged the services of a booking agency, telling Taylor that the agency had guaranteed a minimum of 3 shows a week for the next year. Taylor, excited and trusting of her manager, signed the contract with the booking agency. The weeks go by and Taylor has only had a maximum of two shows a week for the last two months. Taylor gets a bill from the booking agency and refuses to pay it, claiming that the agency had not fulfilled the 3 shows a week guaranty. Taylor takes the contract she and her manager signed to you, her attorney. It makes no mention of the 3 shows a week guaranty. Can Taylor claim that error vitiated her consent and have the contract dissolved? Yes, unilateral error is one of the vices of consent, and the agency should have known that the principal cause of Taylor's consent was the guarantee of 3 shows per week. Yes, Taylor can have the contract dissolved but for fraud, not error because the agency orally guaranteed the 3 dates per week. No, although error does vitiate consent, Taylor would have to prove that the negotiated 3 performances a week was the principal cause of the contract and the other party was aware of that cause. Absent that proof, a person signing a document is presumed to know its contents and is therefore obligated by its terms. No, Taylor could not dissolve the contract because she already performed the shows that the agency booked for her and that performance binds her to the terms in the contract.

Adapted from Shreveport Broadcasting v. Chicoine. The answer is C - Error does vitiate consent and Taylor was in error about what was actually included in the contract. However, in the absence of fraud, a person signing a document is presumed to know its contents. Taylor failed to prove that there was a promise of a specific number of performances per week and therefore failed to prove that there had been a failure of cause.

College seniors, Olivia and Dwight, had been lovers since fourth grade and promised to be together forever. Due to a tragic motorcycle accident, Dwight lost his job. Shortly after the accident, Olivia began working for Fortune 500 Company, ACME. The couple began fighting over medical expenses. Olivia loved Dwight but she constantly informed him that she could not afford to help him. The next summer Olivia interned at the prestigious engineering firm Konichiwa. After a midnight argument, Olivia ensured Dwight that he would live stress free while she was in Japan. Before her departure, Olivia stocked her apartment with groceries, paid $ 150 towards Dwight's first Physical Therapy session, and two of Dwight's medical bills in full. When Olivia returned from Japan, she noticed the Therapy invoice was in excess of $ 4,000. Olivia refused to pay the invoice. Dwight has threatened to file an action against Olivia for the unpaid balance. What factor would the judge most likely take under consideration when determining if there is a "natural" obligation for Olivia to pay the unpaid balance of Dwight physical therapy invoice? a. The duration of Olivia and Dwight's relationship to determine if Olivia had a moral duty to assist Dwight with his medical expenses. b. The pecuniary value conferred upon Dwight. c. Olivia's assurance that Dwight will live stress free for the summer. d. Olivia's caution to Dwight of her inability to assist him with his expenses.

Answer & Explanation: The correct response is C. Olivia's assurance that Dwight will live "stress free" for the summer. Cause is the reason why one obligates himself. Although the other responses satisfied the requirements needed to transfer a moral duty to a natural obligation, it is likely that the judge will weigh heavily the reason why Olivia felt she owed a debt to Dwight. Thus , a stressful free summer for Dwight is the reason Olivia promised to pay Dwight's medical bills and and other expenditures. Though the answer choice is correct, the explanation of the answer is somewhat imprecise. Work on understanding how a NATURAL obligation may be elevated to the cause of a conventional one: through 1. a duty to a particular person 2. strong conscience such that the potential obligor feels he or she owes a moral duty -- or the law implies a moral duty 3. the natural obligation in question is capable of pecuniary performance 4. a clear and unequivocal statement that the obligor is binding himself or herself to fulfill the natural obligation, and 5. the performance is not against public policy Once could argue here that what the girlfriend gave before she left for Japan was in fulfillment of a natural obligation, and therefore she could not reclaim it, her statement about covering his medical expenses was ambiguous because she also stated that she could not afford to pay them.

Buyer A has a contract with Seller B, for Seller B to deliver 10,000 used tires to Buyer A's tire shredding business. Seller B has already delivered 3,000 tires to Buyer A at a price of $900. Buyer A's lot will only hold 3,000 tires on it and can hold no more tires. Seller B has refused to deliver Buyer A anymore tires for lack of payment of $900 and Buyer A files suit for breach of contract. 1. The contract is commutative and Buyer A will be awarded damages for Seller B's failure to perform. 2. The contract is commutative and Buyer A will be found in default for failure to perform 3. Buyer A has a reciprocal obligation to perform to the terms of the contract and Seller B will not be found to be in default 4. Seller B has a reciprocal obligation to perform to the terms of the contract and Buyer A will not be found to be in fault

Answer 3 Buyer A had a reciprocal obligation to perform as he was obligated to perform to Seller B by having enough lot space to hold 10,000 tires. Buyer A cannot put Seller B in default when he cannot perform his own obligation. Either party to a commutative contract may refuse to perform his obligation if the other has refused to perform at same time, if both due simultaneously.

Buyer A has a contract with Seller B, for Seller B to deliver 10,000 used tires to Buyer A's tire shredding business. Seller B has already delivered 3,000 tires to Buyer A at a price of $900. Buyer A's lot will only hold 3,000 tires on it and can hold no more tires. Seller B has refused to deliver Buyer A anymore tires for lack of payment of $900 and Buyer A files suit for breach of contract. The contract is commutative and Buyer A will be awarded damages for Seller B's failure to perform. The contract is commutative and Buyer A will be found in default for failure to perform Buyer A has a reciprocal obligation to perform to the terms of the contract and Seller B will not be found to be in default Seller B has a reciprocal obligation to perform to the terms of the contract and Buyer A will not be found to be in fault

Answer 3 A had a reciprocal obligation to perform as he was obligated to perform to B by having enough lot space to hold 10,000 tires. A cannot put B in default when he cannot perform his own obligation. Either party to a commutative contract may refuse to perform his obligation if the other has refused to perform at same time, if both due simultaneously. HTML Translation provided by Oracle's Outside In® HTML Export software.

In 2012 ABC brought suit against buyer for unpaid balance on a loan. The court ruled in favor of the creditor, ABC, in 2014. In 2009, buyer had obtained a large loan from his creditor, ABC, to purchase a piece of property for his business. Buyer's business was struggling so in 2010, unknown to ABC, he purchased another piece of property to expand his business. Buyer immediately regretted his decision and sold the property a few months later. The act of sale was recorded in 2010. The creditor learned of the purchase, in 2014, through the act of sale in 2010 and wants to annul the act. Can ABC annul the act of the buyer? a. Yes, because the buyer acted in a way that increased his insolvency b. Yes, because the act of sale was recorded in 2010 c. No, because the 1 year prescription began when the creditor knew or should have known about the act, not just by recordation of the act of sale. d. Yes, because the 3 year prescriptive period began in 2010

Answer C

Revocatory Action In 2007, Buyer obtained a large (unsecured) loan from Bank to purchase a piece of property. By 2010, Buyer was in financial trouble, so he gave the property by means of an authentic act to his brother in order to protect it from his creditors, including Bank. In 2014, Bank sued Buyer for the unpaid balance on the loan and wants to have the donation annulled. Can ABC bring an action to annul buyer's transfer to his brother? Yes, because the buyer acted in a way that increased his insolvency Yes, because the act of sale was recorded in 2009 Yes, because the 3 year prescriptive period does not apply in cases of fraud. No, because the 3 year prescriptive period for a revocatory action began in 2010

Answer C - based on articles 2041 and 2039. The obligor made a gratuitous contract that increased his insolvency, so whether or not the brother knew the transfer would increase his insolvency is irrelevant. Moreover, the transfer was in furtherance of a fraud on the Bank, so the three year prescriptive period from the date of the act does not apply in cases of fraud.

RECIPROCAL CONTRACTS. In case of reciprocal obligations, the obligor of one may not be put in default unless the obligor of the other has performed OR is ready to perform. 6. Ford & Meyers An obligor is liable for the damages caused by his failure to perform a conventional obligation. ART 1994 A failure to perform results from: nonperformance, defective performance, or delay in performance. MEASURE DAMAGES: by the loss sustained by the obligee and the profit of which he has been deprived. OBLIGOR in GOOD/BAD FAITH: An obligor in good faith is liable only for the damages that were foreseeable at the time the contract was made. ART 1996 Foreseeable damages are such damages as may fall within the foresight of a reasonable man. Any special circumstances made known to the obligor by the obligee should also be taken into account. An obligor in bad faith is liable for all the damages, foreseeable or not, that are a direct consequence of his failure to perform. ART 1997 An obligor is in bad faith if he intentionally and maliciously fails to perform his obligation. A truly fraudulent failure (taking an unfair advantage of another party) to perform of course, would constitute bad faith under this Article. QUESTION: Dog owner entered into a contract with woman for the sale of her three prized toy poodles. The sale was to occur at the end of the next competition season for a price of $2,500 per dog, and the contract stipulated that woman would only purchase the dogs that were competition ready at the time of sale. Subsequently Dog owner entered a contract to pay dog sitter $50 dollars a week, per dog, to dog-sit her prized toy poodles for a set duration of one month and two weeks during the non-competition season. Dog owner stipulated that dog sitter is to keep all three dogs in a safe and stress free environment away from other dogs at all times to keep them in tip-top condition for competition. From day one dog sitter let the toy poodles play with her restless and large German Shepard at her home, knowing that the German Shepard tended to play rough with small things. After the 5th week of dog sitting and allowing the toy poodles to play with the German Shepard; the larger dog accidently injured one of the prized toy poodles causing it to be unable to compete in any future competitions. Dog owner's toy poodles are winners and usually bring home $3,000 apiece in competition. Calculate the damages dog sitter may owe to dog owner. $5,500=3000(future competition winnings)+2500(contracted price for dog) $2,500=just dog sale price $6,250=2500(contracted price for dog)+3000(future competition winnings)+750(150x5)(dog sitting price for 5 weeks) $3,250=2500(contracted price for dog)+750(price for 5 weeks of dog sitting) $3,750=3000(future competition winnings)+750(price for 5 weeks of dog sitting) The person should have to make the bad faith determination and what damages will be included in determining the bad faith of the dog sitter. That's why no legal reason was given in the answers since they are simple code articles and math to get the right answer.

Answer D is correct. $3,750=3000(future competition winnings)+750(price for 5 weeks of dog sitting) The dog owner may demand damages for the loss she sustained as well as the profit deprived. If the dog sitter is in good faith she is only liable for damages that were foreseeable at the time of contracting. If the dog sitter was in bad faith she is liable for all damages, foreseeable or not, that are a direct result of the dog sitters breach. A party is said to be in bad faith when his breach is intentional or malicious. Dog sitter knew that she was not to allow the poodles to be around any other dogs. Dog sitter was in bad faith because she let them play with her german shepard with the intent of injuring one of the dogs. Therefore, she is liable for all damages that are a direct result of her failure to perform, being the sale price of the dog (profit deprived) and the cost of the dog sitting (loss sustained). The future competition winnings of the poodle are not damages that can be recovered, because the winnings are speculative and uncertain. It is not said that the dog would have won the next competition.

Damages Hammond Hummers has a rare 2002 H1 Hummer for sale for $65,000 at their dealership. Billy Buyer loves the Hummer and agrees to purchase and says he will be back next week when he gets paid, begging them not to sell because this has been his life long dream vehicle. Hammond Hummers agrees to hold for Billy Buyer. That weekend, a blockbuster film comes out featuring Arnold Schwarzenegger in a H1 Hummer. The demand and price of Hummers skyrocket immediately. Hammond Hummers gets a new offer on the H1 for $120,000 from a huge Arnold fan. Hammond Hummers sells to the Arnold fan on the spot. 1. Assuming Hammond Hummers and Billy Buyer have an enforceable contract, what remedy under the law does Billy Buyer have for restitution? A. Billy Buyer can sue for damages based on the difference of sale price and contract price. B. Billy Buyer can sue for Specific performance and have the Hummer returned and sold to him for $65,000. C. Billy buyer can sue for non-pecuniary damages because of his dream of Hummer ownership being lost. D. Billy buyer can sue for A, B, or C.

Answer D. Damages are due for failure to perform a conventional obligation. Failure to perform results from nonperformance, defective performance, or delay in performance. To Measure damages one will take the loss sustained by the obligee and the profit of which he has been deprived. Nonpecuniary damages are only when the nature of the contract is intended to gratify a nonpecuniary interest as a Hummer would, being it is not an everyday vehicle. The obligor also knew or should have known that his failure to perform would cause that kind of loss. Here the dealer new the life long dream of Billy Buyer wanting a Hummer and how selling would cause nonpecuniary damages to him. The Hummer dealer is a Bad faith Obligor. He is now Liable for ALL damages, foreseeable or not, that are a direct consequence of his failure to perform.

Plaintiff, Lawn and Order; a lawn care provider, entered into a contract with defendant, Louisiana Economic Research and Development Center (L.E.R.D.C.), under which plaintiff was to provide lawn care service for certain commercial real estate of the defendant. A provision was made for termination of the contract by defendant upon written notice of 21 days. During the term of the contract negotiated between the two parties, Hurricane Nadia, a category 5 storm, completely destroyed the premises where the lawn care services were to take place; uprooting most trees and flooding the property. The defendant gave notice of termination of the contract and the plaintiff sued for damages. The President of Lawn and Order concluded that, since the unexpired term of the contract was forty months with a monthly fee of $3,500.00, the claimed sixty (60%) percent margin of profit would have amounted to $84,000. Despite the President's thorough assessment of damages, the trial judge rejected the President's testimony of the sixty (60%) percent profit estimate and substituted his own conjecture of $25,000 as a reasonable amount of damages to be awarded to plaintiff. This would have been a margin of profit of 17.86%. Was the trial court judge correct in his award of damages to the plaintiff? A.) Yes, the trial court judge was correct in reducing the amount of damages assessed by the plaintiff to a reasonable amount. B.) Yes, because the trial court judge correctly used his discretional powers in assigning the reduced amount of damages based on the evidence of the case. C.) No, because the plaintiff's assessment of damages was correct based on his testimony dealing in generalities, estimates and speculation, including his estimate of a corporate profit margin on this contract of sixty percent (60%). D.) No, both the plaintiff and trial court judge were wrong in assessing damages based on loss of profits in this case, as such an award is purely speculative and unsupported by any competent evidence. E.) The contract is dissolved because the entire performance owed by the plaintiff has become impossible due to a fortuitous event.

Answer E is correct. Art. 1875. Fortuitous event: A fortuitous event is one that, at the time the contract was made, could not have been reasonably foreseen. Art. 1876. Contract dissolved when performance becomes impossible: When the entire performance owed by one party has become impossible because of a fortuitous event, the contract is dissolved. The other party may then recover any performance he has already rendered. In the case at hand, the hurricane constituted a fortuitous event that could not have been reasonably foreseen; rendering the performance owed by the lawn care provider impossible. Therefore, the contract is dissolved.

Natural Obligation Jack and Carmen Philips, husband and wife, jointly signed a promissory note to Carmen's son and Jack's stepson, 24 year old Clay Middlebrook, for $25,000 to assist in paying the remainder of his law school debt. The amount promised by the pair represented ¼ of the amount owed by Clay to Sally Mae. However, Jack and Carmen subsequently divorced shortly after and although Jack had a great relationship with Clay and loved him as if he was his own, he attempted to back out of the agreement. Can Clay bring a successful suit against Jack to collect the amount promised? A. No, the natural obligation existed between Clay and his mom not Jack because there was no blood relation. B. No, after Carmen and Jack divorced the obligation to pay Clay's law school debt no longer existed. C. Yes, because there was a natural obligation and Jack promised to perform and is reasonably obligated to fulfill this duty. D. Yes, because a natural obligation existed because of their close knit relationship and his duty to aid his stepson.

Answer is 'C' because the object of Jack's performance possessed a pecuniary value; Jack recognized this obligation by signing the promissory note and promising to perform; and fulfillment of this duty is reasonable and does not impair the public order.

Specific Performance Hypo Mary owns two buildings next door to one another at 123 Easy Street and 125 Easy Street. She runs her business, a florist shop, at 123 Easy Street and leases 125 Easy Street to Mike, who owns and operates a very successful and popular restaurant. In the 25-year lease agreement between Mary and Mike, Mike has 20 parking spaces for his customers. Every September, Mike closes his restaurant and goes on vacation in Europe for a month. While Mike is on vacation, Mary adds a $1,000,000.00 extension to her florist shop at 123 Easy Street over the 20 parking spaces allotted to Mike's restaurant. Upon returning from vacation, Mike filed a lawsuit against Mary for breach of contract. What is Mike entitled to as an obligee? 1.) specific performance 2.) damages 3.) dissolution of the contract 4.) 1 and 2 5.) 1, 2 and 3. 6.) 1. or 2. or 3. 7.) 1. or 2. and 3.

Answer: 6.) Art. 1986 states that on the breach of any obligation to do, or not to do, the obligee is entitled EITHER to damages, OR, in cases which permit it, to a specific performance of the contract, at his option, OR he may require the dissolution of the contract, and in all these cases damages may be given where they have accrued, according to the rules established in the following sections. Note that 1986 states that damages may be given and Art. 1987 states that the obligee may require that any thing which has been done in violation of a contract, may be undone, if the nature of the cause will permit, and that things be restored to the situation in which they were before the act complained of was done, and the court may order this to be effected by its officers, or authorize the injured party to do it himself at the expense of the other, and may also add damages, if the justice of the case require it.

Assumption/Compensation: needs reworking Rockstar Collections purchased Rhianna's default credit account from Saks Fifth Avenue. On April 1, Rockstar Collections sent Rhianna a letter offering to settle the $3909.83 debt as paid in full for a one time payment of $2000 due or two installment payments of $1075, first payment May 1 and final payment on June 1; made by sending a check or money order to the specified address. Rhianna opened the letter the night before she left to start her European Tour but ignored it and added it to her pile of bills. On April 30 Rhianna's Mom found the letter and coincidentally Rhianna's Mom owes Rhianna $3900 for a loan from 2 years ago. Her Mom figured she could just pay the two payments before Rhianna comes back and settle this the debt to RC for Rhianna instead of paying Rhianna directly. Unbeknowst to Rhianna, Her Mom sent a personal check to RC on May 1 in the amount of $1075 with Rhianna's account number written on the bottom. The first payment was accepted but the June 1 payment was returned for NSF. On June 5, Rockstar Collections called the number listed on the NSF check, and Rhianna's Mom acknowledged that she wrote the check and that she intended to take care of this for Rhianna. RC offered to settle the debt if a cashier's check in the amount of $1500, $1400 payment and $100 NSF is received by June 30. The President stated "That is fine, but this is your last chance or I'm filing a lawsuit". The payment was never received and Rhianna hasn't heard from her mother since. Which of the following statements are true in regards to Rhianna's debt to RC? Rhianna's Mom's $3900 debt to Rhianna was extinguished when she started making payments to RC Rhianna is responsible for the remaining balance on the account, minus the $1075 payment. Rhianna's debt was extinguished by subjective novation because her Mom became the new obligor when RC agreed over the phone to accept $1500 payment from her Mom to settle the account. Both A &C None of the above.

Answer: B- because RC has right as obligee to demand full performance of the obligation (payment of the total amount of the claim) but they can not reject payments from third parties regardless of whether Rhianna knew or not. Is wrong because Rhianna did not agree to this agreement. Is wrong because RC did not express clear and unequivocal intent to release Rhianna from the debt, they only agreed to modify payments, the cause of the obligation did not change and a substantial part of the original obligation remains.

CAPACITY Angela, a wealthy landowner has been recently diagnosed with schizophrenia. She has been suffering from severe depression, hallucinations, violent outbursts, etc... Angela's parents have recently filed for interdiction of Angela on October 2, 2013, but the court has not yet made a ruling. Angela, however, does not agree with the doctor's diagnosis and has not been taking her medication. On October 7, 2013, one of Angela's close friends, Stacey, asks her to sell to her the $3 million mansion that Angela lives in. Angela decides to sell the mansion to Stacy for $10,000. Although Stacy is aware of Angela's recent diagnosis and has witnessed Angela's episodes of depression and hallucinations, she accepts the offer and purchases the home for $10,000. Angela dies two weeks after the sale. Angela's parents seek to have the contract rescinded arguing that Angela lacked capacity at the time of the agreement due to a mental infirmity. Are Angela's parents likely to prevail in a claim against Stacy? No, because the court has not yet ruled Angela as an interdict. Yes, because Stacy was aware of Angela's incapacity at the time of the making of the contract, and application for interdiction had been filed within 30 days of Angela's death. Yes, because a doctor has diagnosed Angela as schizophrenic. No, because the contract did not lack consideration.

Answer: B; A contract made by a noninterdicted person deprived of reason at the time of contracting may be attacked after his death, on the ground of incapacity, only when the contract is gratuitous, or it evidences lack of understanding, or was made within thirty days of his death, or when application for interdiction was filed before his death. Angela's parents filed for interdiction within 30 days of her death. Therefore, they can challenge the contract. Once one of the aforementioned instances are shown, the party who was deprived of reasoning at the time of the making of the contract must now prove that the other party knew or should have known that person's incapacity. Article 1925 provides that a noninterdicted person, who was deprived of reason at the time of contracting, may obtain rescission of an onerous contract upon the ground of incapacity only upon showing that the other party knew or should have known that person's incapacity. Stacy was aware of Angela's diagnosis and had witnessed her episodes of depression and hallucinations. Because Stacy knew of Angela's incapacity at the time of the agreement, Angela's parents can have the contract rescinded.

Dissolution by Party's Initiative Employee accepts job working as a technician for Employer. The Employee was to make $70,000 a year. Employee began working March 21, 2015. However, Employer now wishes to terminate the contract enter into between the parties. The Employer wishes to fire the Employee by August 25, 2015. Employer comes to you seeking advice on how to terminate the contract. May the Employer terminate the contract? If so, how should the Employer proceed? Yes, by giving the Employee proper notice. Yes, by citing poor performance on the Employee's part as reason for the termination. Yes, by simply firing the Employee.

Answer: C) The Employer may terminate the contract between the parties, as the facts do not specify a definite duration of employment. Thus, it is presumed that the contract of employment was for an indefinite duration. Therefore, since in Louisiana employment is at will, the Employer has the right to terminate the Employee without giving him notice or reason as to why he is being fired.

3d Party Beneficiary Seller agreed to transfer her home to Buyer1 for $500,000, to be paid in monthly installments of $5,000. Buyer1 subsequently decided to sell the home to Buyer2 for $250,000 cash plus assumption of the remaining $250,000 debt owed to Seller. Buyer1 then asked Seller for more time to make that month's $5,000 payment so that Buyer1 and Buyer2 could execute the agreement, and Seller agreed to give more time. Immediately after the sale was completed, Buyer2 changed his mind and wanted to dissolve the sale, returning the home to Buyer1. May Buyer1 and Buyer2 dissolve the sale of the home to Buyer2? a. Yes, because Buyer2 has not yet made a payment to Seller b. Yes, because Seller's consent is irrelevant c. Yes, but only with Seller's consent d. Yes, provided the rescission is done in authentic act form.

Answer: c -- the Stipulator and the Promisor of a third party beneficiary contract cannot by themselves dissolve their contract once the third party beneficiary has manifested his assent to the contract. Here, the third party beneficiary did so by granting extra time to the Stipulator (Buyer 1) to pay that month's installment. This question is based on Vinet v. Bres, page 326-327 of the Casebook

Seller agreed to transfer her home to Buyer1 for $500,000, to be paid in monthly installments of $5,000. Buyer1 subsequently decided to sell the home to Buyer2 for $250,000 cash plus assumption of the remaining $250,000 debt owed to Seller. Buyer1 then asked Seller for more time to make that month's $5,000 payment so that Buyer1 and Buyer2 could execute the agreement, and Seller agreed to give more time. Immediately after the sale was completed, Buyer2 changed his mind and wanted to dissolve the sale, returning the home to Buyer1. May Buyer1 and Buyer2 dissolve the sale of the home to Buyer2? a. Yes, because Buyer2 has not yet made a payment to Seller b. Yes, because Seller's consent is irrelevant c. Yes, but only with Seller's consent d. Yes, provided the rescission is done in authentic act form.

Answer: c -- the Stipulator and the Promisor of a third party beneficiary contract cannot by themselves dissolve their contract once the third party beneficiary has manifested his assent to the contract. Here, the third party beneficiary did so by granting extra time to the Stipulator (Buyer 1) to pay that month's installment. This question is based on Vinet v. Bres, page 326-327 of the Casebook

On April 1, 2013, Buyer brought suit alleging that Seller breached her obligation to sell Buyer her car for $25,000 when Seller refused to take anything less than $30,000 on March 2, 2013. Buyer relies on the following evidence: 1) there is an undated letter from Seller to Buyer in which Seller binds herself to sell the car to Buyer for $25,000 if Buyer accepts within seven (7) days; 2) there is an "agreement" dated March 1, 2013, signed by Buyer and one (1) witness which states that the Buyer and Seller agree to the purchase price of $25,000 for Seller's car; 3) there is an April 2, 2013 affidavit signed by Seller, in which Seller admits to being present during the drafting and signing of said "agreement" and orally consenting to its contents and terms. Does Buyer have sufficient proof of existence of an obligation of Seller to Buyer to sell her car for $25,000? (note: clicking each choice will either display an explanation why the choice selected is correct or incorrect.) (A) ) Yes, because Buyer can serve as his own witness sufficient to prove existence of the obligation by testimony. (B) ) Yes, because the affidavit is a confession of Seller's obligation to sell her car to Buyer for $25,000 (C) ) Yes, because the March 1, 2013 "agreement" is sufficient written proof. (D) ) Yes, because the letter serves as an irrevocable offer which the Buyer accepted in the March 1, 2013 "agreement".

B D is wrong bc even though the letter is a 7 day irrevocable offer, it is undated so it cannot be determined if buyer accepted w/in 7 days. A is wrong bc for testimonial proof the buyer needs proof from a source not his own. the affidavit corrobortes the circumstances but uses only the buyer's testimony C is wrong bc would need to be either authentic act or private signature duly acknowledged. Not aa bc not signed in the presence of a notary and 2 witnesses. Not an act under private signature duly acknowledged bc not signed by opposing party and then later acknowledged int he presence of a notary.

CAPACITY X appealed the district court's decision not to rescind a Purchase Agreement of a real estate property between X and Z, on the grounds that X was incapable of contracting, due to his old age and infirmity. Expert witness, Y testified that at one point prior to the Purchase Agreement, Y told X that Y would like to be X's curator. Also X had dementia, filed and was interdicted, 5 months after the sale. Q: The issue presented is whether the Appellate court held that the Purchase Agreement was an enforceable contract? Yes, Appellate court affirmed on the grounds that the purchase agreement was an authentic act, which was filed and recorded by Z. Yes, Appellate court affirmed on the grounds that the testimony did not prove that X was without capacity nor an interdict, at the time of contracting. Also, there was nothing to put defendant on notice that plaintiff suffered from any mental infirmity either before or on the day of the contract formation. No, Appellate court reversed in part on the grounds that the testimony did not prove that plaintiff was without capacity at the time of contracting, but was eventually interdicted. No, Appellate court reversed on the grounds of no genuine material issue.

B is correct Under LA CC Art. 1919- a contract made by a person without legal capacity is relatively null and may be rescinded only at the request of that person or his legal representative. A person is without legal capacity when they are interdicted or deprived of reason. A noninterdicted person who was deprived of reason at the time of contracting, may obtain rescission of an onerous contract upon the ground of incapacity only upon showing that the other party knew or should have known that persons incapacity. (CC 1925) Here, while X later became interdicted, there was no evidence to support his lack of capacity or mental infirmity at the time of contracting. Therefore, the contract cannot be rescinded on lack of capacity.

Subrogation* Borrower took out a loan for 100,000 from Bank in order to start a construction company. Tycoon was looking to get involved with a new business venture, went to Bank and offered to pay half of Borrower's loan. Can Tycoon do this? If so what rights will Tycoon have and does she need Borrower's permission? A. No Tycoon cannot do this , in order to take over Borrower' debt, Borrower must first agree that he would like to do business with her since he is the obligor. B. Yes, Tycoon can do this by means of partial subrogation. Tycoon did not fulfill the entire obligation owed to the original obligee. Consequently the original obligee still keeps his original rights, privileges, and security to the extent of the remainder. Borrower' consent is not necessary for partial subrogation. C. Yes, by means of conventional subrogation,Tycoon entered into an agreement with Bank, the original obligee, to pay Borrower's. Borrower's consent is not required. Tycoon has the same rights, privileges, and security as Bank. D. No Tycoon cannot take over all or part of Borrower's loan in the absence of Borrower's agreement because Borrower, as third party beneficiary, has not manifested his assent.

B is the correct answer, based on articles 1827 and 1826. The answer is "B" because just like performance, novation also extinguishes an existing obligation by substituting it for a new one. The parties' intentions to extinguish the original obligation must be clear and unequivocal. Basically, in order to result in a novation, the parties must meet 2 requirements: a succession of obligations and the intent to novate. Also, a mere modification of a non-essential component part of an obligation does not make it a novation because novation requires than an essential element of an obligation be substituted. In regards to the intent to novate, the parties must have meant to BOTH extinguish an obligation and substitute it for another. This intent may be implied from the parties' actions, shown by the character of the transaction and by the facts surrounding it, or by the terms of the agreement itself. In this case, the cause of the Martins entering into the SALE was to purchase a flawless couch, which was the object of Z Gallery's obligation to give. Because of the defects in the first couch, it may be argued that such defects made the sale rescindable. The object, the first couch, could be said to not exist as a "flawless" couch, which was the object of the Martins' obligation. This results in the ZG's obligation lacking an object, and should return the purchase price. However, the Martins and ZG's manager were able to agree that the store could keep the purchase price, the object of the Martins' obligation, and ZG would substitute the object of its original obligation to give, the stained couch, for a new object: the ripped one. When the Martins brought the couch back for a new one, that was a clear and unequivocal intent to extinguish the first obligation because they no longer wanted that couch. Furthermore, this was not a mere modification because it was an entirely new couch. A mere modification may have been to replace the leather or patch the hole. Lastly, the intent was quite express and shown by the facts surrounding the transaction because both parties agreed for the store to keep the price if it was exchanged. This part is essential because it shows the actual novation: the first transaction was a contract of SALE, and the second was a contract of EXCHANGE. Hence, the novation.

Confusion A predial servitude was created on the servient estate to not erect any buildings, construct any common enclosures, or prevent the dominate estate the right of passage to the gravel road leading to the highway. A few years later, a man acquired both servient and dominate estates from the owner and began to construct additional buildings and set up fences around a few areas of the property. In this situation, is the predial servitude still enforceable? Yes, because predial servitudes deal with the estate/immovables on the estate and stay intact regardless of whom the owner/owners are. No, the predial servitude would be extinguished by confusion because the dominant and servient estates were acquired in their entirety by the same person. No, the predial servitude would be extinguished by confusion since there is a new owner involved. No, the predial servitude would be extinguished by confusion since the surrounding property owners are not exactly sure who owns the land.

B is the correct answer. Article 1903 states that when the qualities of obligee and obligor are united in the same person, the obligation is extinguished by confusion. Since the man acquired both servient and dominate estates and is now the obligor and obligee, the obligation is extinguished by confusion.

Right of First Refusal James and Parker have been best friends since kindergarten. James has become a wealthy billionaire and owns an extensive car collection. Among his collection is a 1967 Shelby Mustang GT 500 featured on the hit movie Gone in 60 Seconds affectionately named "Eleanor." Parker has always been fond of Eleanor and told James that if he ever got ready to sell the car to let him know so he could have a chance to buy it. James and Parker sign an agreement that before James sells the car to anyone else he will offer the car to Parker. Two months later Parker got into financial trouble and lost everything and began having to sell all his possessions. Before selling Eleanor Parker called James and offered to sell him the Mustang for $300,000 and gave him three days to decide before he would be putting the car up for auction. This would be best described as an example of a(n): Irrevocable offer Right of first refusal Onerous contract Donation inter vivos

B. Right of first refusal

RIGHT OF FIRST REFUSAL Mary is the owner of a tract of land used in the filming of the movie The Hunger Games. Jane is a huge fane of the films. Jane and Mary begin talking about the tract of land one day and Jane comments that she wishes she could buy it. Mary states that if she ever wants to sell the tract of land she will be sure to contact Jane first. Jane is very excited about this and asks Mary to put this in writing to which Mary does. Fifteen years later, Mary sells the land to Patty. Jane finds out about this and sues Mary for breach of her agreement to offer the land to Jane first. Will Jane succeed? A. Yes, there was a right of first refusal between Mary and Jane. Mary breached this agreement when she sold the land to Patty without first consulting Jane. B. Yes, there was a right of first refusal between Mary and Jane, and these agreements expire only after 20 years for immovable things. C.No, there was a right of first refusal between Mary and Jane, but these agreements expire after 10 years for immovable things. D. No, there was no right of first refusal between Mary and Jane.

C is correct

Buyer agreed to buy clothes only from Seller for her new clothing store for a 2 year period to help the underprivileged children have affordable clothes. Buyer buys clothes from Seller for 1 year and then decides that she is no longer going to buy from Seller since she found Seller 2 who will sell for less. Buyer demands that she will not buy anymore clothes unless she matches the prices of the other company or give her more clothes for the same amount she is currently paying. Seller refuses the offer and files suit against Buyer. Seller has come to you asking for your advice? A) Buyer would be able to end the contract since she no longer has a cause and the Seller knew of her cause to want to sell affordable clothes to underprivileged children. B) Buyer would be able re-negotiate her contract at anytime. C) Seller would still be obligated to Buyer since they had a valid contract. D) Seller would no longer be obligated since Buyer had already failed to perform.

C. Term for 2 yrs.

READINESS TO PERFORM On March 1, a contractor agreed with the homeowner to renovate his home. The agreement stated that the construction was to begin in two weeks from the date of the agreement. The contractor went and purchased the materials needed to complete the job. On March 13, the contractor showed up to the home to deliver the building materials and tools. When the contractor dropped the tools and materials off at the home, the homeowner told the contractor that he had dissolved the contract because he had not heard from the contractor since the agreement had been reached. What explanation would the court have in this case? The contract is dissolved because the notice to the contractor would be considered that the homeowner put the contractor in default and the contract was dissolved. A. The contract is dissolved because the contractor delayed his performance on the home for thirteen days, instead of working on the home as soon as the contract was valid. B. The contract is not dissolved because the term had not expired and the contractor had expressed a readiness to perform by the delivery of building materials and tools. C. The contract is not dissolved because both parties expressed consent to enter into the contract.

Correct Answer: C The correct answer is C because this was a valid contract, which consisted of an offer and an acceptance. The homeowner and the contractor included a clause in their contract for the work to begin within fourteen days of the agreement. When the contractor delivered the materials and tools, this showed that he had a readiness to perform his obligation within the specified time period agreed upon in the contract.

Business1 borrowed a $150,00 loan from Bank. Bank and Business2 entered into an agreement whereby Business2 guaranteed 90% of the Business1's loan. When the loan became delinquent, the remaining balance owed to Bank was $100,000. Bank called in the loan to Business2. Pursuant to the agreement between Business2 and Bank, Business2 paid 90% of Business1's outstanding debt totaling $90,000. Bank subsequently filed suit against Business1 to recover the remaining balance of $10,000. Business2 intervened in the suit asserting that Business1 was indebted to Business2 in the amount of $90,000, and without the note, its rights to recover and collect sums due it were substantially impaired. Is Bank entitled to recover the remaining $10,000 from Business2? No, because Business2 has an exclusive right to proceed against Business1 as surety on its loan. Yes, but only if Business2 agrees to forgive Business1's debt to Business2 in the amount of $90,000. No, because Business2, as a surety for the loan. only agreed to pay part of the debt, not the whole debt. Yes, because Bank, original creditor, did not receive full payment for Business1's loan, and Business2 is legally subrogated subordinately to the rights of Bank to be paid the balance due on the loan.

D. Is the correct answer pursuant to La. C.C. Art. 1826.

Elijah, Rebecca, and Klaus decided to start a hardware store. This was an arduous task and required funding; therefore, the three went to Ram-Ya loans and received a $36,000 loan for supplies. The contract with Ram-Ya had in expressed writing, "The obligors are solidarily liable for Ram-Ya for any failure to perform or inability to repay the debt." Unfortunately, the business was not situated in the right part of town and subsequently none of the three paid back any money to Ram-Ya. Rebecca talked with the owner of Ram-Ya and the owner felt sorry for Rebecca because of her various mental corks and decided to renounce her portion of the debt to Ram-Ya. Elijah, who was not the sharpest tool in the shed, did not have any assets before the loan and now she has become insolvent and unable to repay. How much will Rebecca and Klaus have to pay Ram-Ya? A. $12,000 B. $24,000 C. $18,000 D. $36,000 E. None of the above

Explanation: The correct answer is "C." Rebecca and Klaus will each be liable to Ram-Ya for $18,000. A solidary obligation is for the obligors when each obligor is liable for the whole performance. If one solidary obligor is insolvent the loss must be borne by the other solidary obligors in proportion to their virile portion. The virile portion is calculated by 36,000/3= 12,000 for each obligor. Any obligor in whose favor solidarity has been renounced must nevertheless contribute to make up for the loss due to another solidary obligor's insolvency. Therefore, Elijah's virile portion is to be divided and tacked onto Rebecca and Klaus's portion. Elijah's virile portion= 12,000. 12,000/2= 6,000. The $6,000 is added to Rebecca's $12,000 virile portion and the other $6,000 is added to Klaus's virile portion; there they each are liable for $18,000.

Robert, Lamar, and Aurora decided to start a restaurant with their grandmother's secret recipes. This was a demanding task and required funding; therefore, the three went to Stewart & Stevens loans and received a $36,000 loan for supplies. The contract with Stewart & Stevens had in expressed writing, "The obligors are solidarily liable to Stewart & Stevens for any failure to perform or inability to repay the debt." Unfortunately, the business was not situated in the right part of town and the restaurant failed. Subsequently, none of the three paid back any money to Stewart & Stevens. Aurora talked with the owner of Stewart & Stevens, and the owner felt sorry for Aurora because of her sob story; he decided to renounce her portion of the debt to Stewart & Stevens in a written document. Lamar, who was not the sharpest tool in the shed, did not have any assets before the loan and now he has become insolvent and unable to repay the loan. Individually, how much will Robert and Aurora have to pay Stewart & Stevens? Robert: $12,000; Aurora: $12,000 Robert: $18,000; Aurora: $0 Robert: $18,000; Aurora: $18,000 Robert: $12,000; Aurora: $0 None of the above

Explanation: The correct answer is "C." Robert and Aurora will each be liable to Stewart & Stevens for $18,000. A solidary obligation is for the obligors when each obligor is liable for the whole performance. If one solidary obligor is insolvent, the loss must be borne by the other solidary obligors in proportion to their virile portion. The virile portion is calculated by $36,000/3= $12,000 for each obligor. Any obligor in whose favor solidarity has been renounced must nevertheless contribute to make up for the loss due to another solidary obligor's insolvency. Therefore, Lamar's virile portion is to be divided and tacked onto Robert and Aurora's portions. Lamar's virile portion= $12,000. This $12,000/2= $6,000. The $6,000 is added to Robert's $12,000 virile portion and the other $6,000 is added to Aurora's virile portion; therefore, Robert and Aurora each are liable for $18,000.

"REAL OBLIGATION" EXAM QUESTION - In 1950, Andrew was the owner of an empty lot located in the northeast corner of Canal St. and Dressier Ave. in the New Orleans. On June 20, 1950, he conveyed to Lisa half of the empty lot (Lot L) and retained the remainder of the lot for himself (Lot A) Before the same notary and with the act of sale, Andrew and Lisa entered into a contract in authentic form, which was recorded in the mortgage and conveyance records of Landry Parish, with the act of sale. The contract stated that, in execution of the contract, Andrew binds himself, his assigns, heirs and executors as well as all future owners of Lot A, that Lot A shall never be sold, transferred or used except subject to one restriction; that it would be used for residential purposes. Andrew later sold Lot A to Katie. Katie chose to never use the land for any purpose. When she passed away two years later, her daughter Nora, a struggling fashion designer, decided to build her own small boutique on the empty lot. Lisa, however, objected to this because she did not want the traffic. Nora claims that the restriction does not apply to her because the contract was a personal obligation between Andrew and Lisa. Is Nora in violation of a real obligation and can Lisa enforce the real obligation? (See answer below). (A) Yes, because the plot of land is an immovable and a real obligation applies to immovables. (B) Yes, because the properly recorded real obligation runs with the land and was transferred to Nora when her mother, Katie, passed away. (C) No, because the obligation was merely personal in nature, and only applied to Andrew and Lisa. (D) No, because the real obligation cannot transfer to Nora.

The answer is B. Yes, because the properly recorded real obligation runs with the land and was transferred to Nora when her mother, Katie, passed away. A real obligation is a duty correlative and incidental to a real right, which attaches to a thing - movable or immovable. It is transferred to the universal or particular successor who acquires the movable or immovable thing to which the obligation is attached, without a special provision to that effect. But a particular successor is not personally bound, unless he assumes the personal obligations of his transferor with respect to the thing, and he may liberate himself of the real obligation by abandoning the thing. The restriction contract explicitly declared that the restriction shall constitute a covenant running with the land and shall be binding on all subsequent owners. The restriction contract originally formed between Andrew and Lisa created a real obligation in the land (an immovable). This obligation was transferred to Katie when she purchased the property. When Katie passed away, her daughter Nora, when she acquired the land to which the real obligation was originally attached, the real obligation transferred to her. Therefore, Katie is restricted by that obligation and may not use the land for any other purpose than for residential purposes.

Interpretation of Contracts The seller, a sugar distributer who sales granulated sugar and powdered sugar to local restaurants, and the buyer, a famous New Orleans restaurant in the French Quarter who needed powdered sugar for beignet toppings, entered into a contract for the purchase of 1,000 lbs. of "sugar" for $300. The seller after receiving the order shipped 1000 lbs. of granulated sugar. The buyer upset that he would not have any powdered sugar for his beignets, refused the delivery of the granulated sugar upon its arrival and contacted the seller to obtain the powdered sugar he needed. The seller refused to exchange the granulated sugar for the powdered sugar because their contract simply called for "sugar". Who will likely prevail if one of the parties files suit? A. Seller, because there is no need for interpretation since the contract is clear and explicit. B. Seller, because different meanings of sugar must be interpreted with a meaning that renders the contract effective. C. Buyer, because different meanings of sugar must be interpreted with a meaning that renders the contract effective. D. Neither, the contract should be voided because the sugar is a technical term that must be given its technical meaning when the contract involves a technical matter.

The correct answer is "D".

Collector has a classic Corvette he has been restoring himself. He wants to enjoy his ride with some tunes, but, lacking the necessary audio system expertise, signs a written contract with Audio Expert to install a custom sound system for $1,200, with money due on completion of installation. Although the contract does not specify when the installation will take place, Collector stresses very strongly to Audio Expert's agent that he will have all the body work done by May 5th. He tells the rep. that the system installation needs to be done at that time, so he can use the car in time for summer. Audio Expert begins buying component parts and custom outfitting them to fit specifically in a Corvette of Collector's make and model. Unfortunately, the repairs take longer than anticipated and by Easter it is obvious that the car will not be ready in time. Collector lets Audio Expert know around the 22nd of April that he has to take some exams and will get back to working on the car around May 10th, with completion sometime around the first of June. Audio Expert is a bit upset by the delay and sells the custom-made parts at a loss for $75. Advise Audio Expert if they will be successful in suit for delay damages, and explain why or why not. A. Yes, because Collector did not fulfill his obligation by the term agreed. B. No, because for a suit to qualify as putting in default it must expressly demand performance. C. No, because Audio Expert cannot place Collector in default when they themselves are not ready to perform. D. Yes, because Audio Expert was ready to perform and the failure to perform was due to Collector.

The credited answer is C. Art. 1989: Damages for delay owed from time obligor put in default. Art. 1990: If a term is fixed of clearly determinable, obligor placed in default by mere arrival of term. Art. 1991: 4 ways to put the obligor in default 1,2. Written request or oral request in front of 2 witnesses for performance 3. Filing suit for performance 4. Terms of K

Lessee has been renting a small house for five years from the Lessor, owner of the property, and the Lessee is going to move out of state after the lease ends this month. When the Lessor leased the house to the Lessee, it was stipulated that the Lessee would not own a pet while residing in the Lessor's home or would have to pay a $1,000.00 penalty. When the Lessor came by to pick up the last months rent they spotted the dog through the window. As the Lessee opened the door, the Lessor noticed that the carpet was ripped up and the base molding had chew marks on it. The Lessor brings this suit from the Lessee's refusal to pay the $1,000.00 penalty fee. If the two parties have entered into a compromise, which would be legally binding on the two parties? Lessor collects his $1,000.00 and the Lessee can move out of state without having to drive back and forth from state to state to litigate. Lessee does not pay anything and Lessor will take care of the damages because her mother just died. Lessee and Lessor have in writing that Lessee will replaces the carpet in the living room, has the house professionally cleaned, and has the damaged base molding replaced totaling $600.00, but does not pay the Lessor anything because they came to a settlement outside of court. The Lessee agrees to share the future profits with Lessor from the puppies of the Australian Shepard through out the life of the dog. Lessor and Lessee have orally agreed at the Clerk of Courts Office that Lessee will replace the carpet in the living room, has the house professionally cleaned, and has the damaged base molding replaced totaling $600.00, but does not pay the Lessor anything because they came to a settlement outside of court.

The question asks, "which compromise would be legally binding." A compromise that would be legally binding is one that is written or orally agreed to in court pursuant to C.C. Art. 3072. A compromise is the settlement of a dispute or an uncertainty concerning an obligation; Lessor and Lessee have agreed to the terms stipulated and withdraw from suit. Lessee can repair the damages that were done by the dog because the Lessor is making a compromise with Lessee to just have the damages repaired, instead of receiving the full penalty amount. They would be able to settle the case without going to trial.

REAL OBLIGATIONS Mr. and Mrs. Williams were in the market for to buy a tire shop to supplement their monthly income after retiring. Mr. Williams had a long career in the field and sought to start his own business he could manage without the day to day duties. Mr. and Mrs. Williams stumbled upon a tire shop in Port Allen, La that was up for sale. Mr. James was the owner and expressed he was looking to start a new business in another field. Mr. and Mrs. Williams quickly moved to buy the property under one condition for the sake of competition, that if Mr. James would like to enter the tire business again that he didn't do so with any of his properties in West Baton Rouge Parish. Both parties agreed and Mr. and Mrs. Williams closed on the building and filed the purchase agreement with the parish recorder. About five years later Mr. James passed away and his son wanted to follow his father's footsteps and opened James' One Stop Tire Shop just in Addis, La just at the edge of the West Baton Rouge and Iberville Parish line in a building his father owned prior to his death. Mr. Williams found out about the business and sought action to restrain Mr. James from operating the tire business because it was in West Baton Rouge Parish. Does Mr. James has a real obligation to the Williams'. Yes, because the parties agreed to the condition for Mr. James not to operate in West Baton Rouge Parish. Yes, because the tire shop is immovable and a real obligation applies to immovable. Yes, because the Williams' recorded the agreement with the Parish recorder. Yes, because the real obligation transfers to the successor.

Yes, because the real obligation transfers to the successor.