Obligations Nedzel Spring 2017
What is an Obligation?
An obligation is a legal relationship whereby a person, called the obligor, is bound to render a performance in favor of another, called the obligee. Performance may consist of giving, doing, or not doing something.
What are the Sources of an Obligation?
Obligations arise from contracts and other declarations of will. They also arise directly from the law, regardless of a declaration of will, in instances such as wrongful acts, the management of the affairs of another, unjust enrichment and other acts or facts.
What are the General Effects of an Obligation?
A. An obligation may give the obligee the right to:
(1) Enforce the performance that the obligor is bound to render;
(2) Enforce performance by causing it to be rendered by another at the obligor's expense;
(3) Recover damages for the obligor's failure to perform, or his defective or delayed performance.
B. An obligation may give the obligor the right to:
(1) Obtain the proper discharge when he has performed in full;
(2) Contest the obligee's actions when the obligation has been extinguished or modified by a legal cause.
What governs the conduct of the parties in an Obligation?
Good faith shall govern the conduct of the obligor and the obligee in whatever pertains to the obligation.
What does the Civil Code say about interpretation?
If a law is clear and unambiguous & application does not lead to absurd consequences, then it shall be applied as written.
If it is susceptible of different meanings, then it must be interpreted as having the meaning that best conforms to its purpose
Meaning: generally prevailing meaning unless technical term
Ambiguous words: examine the text in which they occur and the context to determine proper meaning.
Laws on the same topic must be interpreted with reference to each other.
What are the sources of law?
Legislation & Custom
1. Legislation: solemn expression of legislative will
2. Custom: law that results from practice repeated for a long time and generally accepted as having acquired the force of law, may not abrogate legislation
3. If no applicable legislation or custom, then proceed according to equity, justice, prevailing use.
4. Ignorance of the law: no one may avail himself of ignorance of the law
5. Substantive laws apply prospectively only, procedural and interpretive laws apply both prospectively and retroactively (unless legislative expression to the contrary)
6. Persons my not derogate from laws enacted for the protection of the public interest by their juridical acts. Any such act is an “absolute nullity”
7. Repeal of laws: may be entirely, partially, expressly, or impliedly
Natural Obligations
What gives rise to Natural Obligations?
A natural obligation arises from circumstances in which the law implies a particular moral duty to render a performance.
What are the effects of a Natural Obligation?
A natural obligation is not enforceable by judicial action. Nevertheless, whatever has been freely performed in compliance with a natural obligation may not be reclaimed.
A contract made for the performance of a natural obligation is onerous.
What case showed an example of free performance of natural obligation that could not be reclaimed?
Stoll v. Goodnight
Former employee of a travel agency accepted a rubber check in contravention of procedures to verify check, agreed to allow employer to deduct amount lost from her pay. Once paid, the employer dismissed her and she now wants them to reimburse the $ she paid. Held: Stoll had paid the $ in connection with a natural obligation – she indicated that she felt bad about not having followed procedures and causing her boss a loss – therefore, what was paid in connection with a natural obligation cannot be reclaimed.
What circumstances give rise to a natural obligation?
Examples of circumstances giving rise to a natural obligation are:
(1) When a civil obligation has been extinguished by prescription or discharged in bankruptcy.
(2) When an obligation has been incurred by a person who, although endowed with discernment, lacks legal capacity.
(3) When the universal successors are not bound by a civil obligation to execute the donations and other dispositions made by a deceased person that are null for want of form.
What must happen for a natural obligation to become a contract?
1)duty to a particular person
2)So strongly felt that his conscience bothers him if he doesn’t perform
3)can be remedied w/ money (pecuniary means)
4)some act of recognition of the obligation by the obligor- a promise or performance: CLEAR AND UNEQUIVOCAL
5)It cannot be against public policy
What case is an example of a natural obligation rising to a contract?
Thomas v. Bryant
Stepdad agreed to pay ½ of stepson’s rehab bill for alcohol and drug addition because stepson was his friend. Later refused to pay, saying no obligation to do so. Held: had elevated a natural obligation to a contract: 1. Duty to a particular person (stepson); 2. Strong feeling that owed a duty (had been his friend, close family relationship); 3. Obligation capable of being paid in $; 4. Clear recognition of obligation evidenced by written promise; 5. Not against public policy.
Heritable, Personal & Real Obligations
How does the Civil Code define a Real Obligation?
A real obligation is a duty correlative and incidental to a real right. (an obligation that goes with the thing)
What are the effects of a Real Obligation?
A real obligation 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.
Do real obligations transfer with things?
-A real obligation attaches to a thing. Because a real obligation is a duty incidental and correlative to a real right, and because such a right may apply to both movables and immovables, a real obligation may attach either to a movable or an immovable. For example, when a movable is subject to a usufruct, the real obligation attaches to the movable; when an immovable is burdened with a predial servitude, the real obligation attaches
tory condition that depends solely on the will of the obligor must be fulfilled in good faith.
Give an example of a suspensive condition that depends on the obligor’s judgment rather than whim?
There is an implicit dichotomy between the obligor's “whim,” that is, his exercise of mere unbridled discretion or arbitrariness and his “judgment” or exercise of a considered and reasonable discretion. Thus, in the traditional example, an obligation to buy a house if the obligor moves to Paris is valid rather than null because it is assumed that moving to Paris or not will be decided according to serious reasons such as obtaining a position there or securing admission to a school in that city. It is assumed, in other words, that the obligor will not decide not to move to Paris for the sole purpose of deceiving the other party.
(Art. 1770 Comment e)
What are an obligee’s rights during a pending condition?
The obligee of a conditional obligation, pending fulfillment of the condition, may take all lawful measures to preserve his right.
What if a condition is not fulfilled due to the fault of a party?
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.
What was an example of a court ruling that a suspensive condition would be regarded as fulfilled due to the fault of a party to the obligation?
Garig Transfer
-seller was to go to the state and say please transfer my license
-the contract contained the suspensive condition “if the transfer is not approved we are not obligated”
-the seller then in bad faith, goes to the commission and states that he does not want to transfer
-the buyer then tries to execute the sale and the seller says that the deal is no good b/c the commission did not approve the transfer
-the court ruled in favor of the plaintiff b/c the commission did approve the transfer only b/c of the sellers bad faith
-the seller was at fault so the suspensive condition was regarded as fulfilled
-the seller’s contrary interest was that he simply changed his mind
What happens if the fixed time that a condition is to occur passes?
-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.
-If no time has been fixed for the occurrence of the event, the condition may be fulfilled within a reasonable time.
-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.
