Obligations Law

Most non-attorneys will see attorneys or lawfirms who handled cases under the titles "Commercial Law" or "Commercial Litigation".

 

I chose the phrase "Obligations Law" as one of my Practice Areas because I think that most laymen who see the word "commercial" automatically think of large, multi-state corporations haggling over over massive amounts of money.

 

My view and experience has been just the opposite - that the vast majority of residents in Louisiana will, at some point in their lives, have some sort of dispute that involves a relationship of some sort where they are obligated to behave with and toward one another in a certain manner.  It is with that view and experience that I offer the following general summary of three types of obligations that I believe people in Louisiana encounter more than any others: contracts, sales, and leases.

Contracts

 

General Principles

 

Louisiana defines a contract as an agreement by two or more parties whereby obligations are created, modified, or extinguished.  A contract is unilateral when the party who accepts the obligation of the other does not assume a reciprocal obligation.  A contract is bilateral when the parties obligate themselves reciprocally, so that the obligation of each party correlates to the obligation of the other.

 

A contract is onerous when each of the parties obtains an advantage in exchange for his obligation.  An example of an onerous contract would be where you walk in a Burger King, order a burger, and pay for it.  In this instance, Burger King has obligated itself to cook and present to you a burger, and you obligated yourself to pay (which you did) for the burger in order to receive that burger.

 

A contract is gratuitous when one party obligates himself towards another for the benefit of the latter, without obtaining any advantage in return.  An example of a gratuitous contract would be where, during some sort of fundraiser, you promise to pay to the organization holding the fundraiser that you will donate a certain sum of money by a certain date simply for the sake of helping the organization.

 

Who Can Contract in Louisiana?



All persons have capacity to contract, except unemancipated minors, interdicts, and persons deprived of reason at the time of contracting.

 

A contract made by a person without legal capacity is relatively null and may be rescinded only at the request of that person or his legal representative.  For example, if an unemancipated minor contracts with an adult to perform a service, that minor’s parents may sue to rescind (nullify) that contract so that the minor is no longer obligated to perform.  Immediately after discovering the incapacity, a party, who at the time of contracting was ignorant of the incapacity of the other party, may require from that party, if the incapacity has ceased, or from the legal representative if it has not, that the contract be confirmed or rescinded.  In other words, if the person who had the capacity to contract discovers that the other party did not have the requisite capacity to do so, the former may approach the latter (if the incapacity has ended, such as a minor becoming a major) and ask that he agree to perform the original contract.

 

Upon rescission of a contract on the ground of incapacity, each party or his legal representative shall restore to the other 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.  An example of this would be where a homeowner contracts with a 13 year old to cut his yard, pays the kid, and the kid’s parents object to that contract and refuse to allow their child to cut the yard.  In this example, the kid must return the money paid to him if he has not yet cut the yard.  If the kid has already spent the money, the homeowner could sue the parents of the kid for a refund of the money paid if the yard has not been cut.

 

A general rule - such as the incapacity of an unemancipated being able to contract - almost always has exceptions.

 

For example, a contract by an unemancipated minor may not be rescinded on the grounds of incapacity when made for the purpose of providing the minor with something necessary for his support or education, or for a purpose related to his business.

 

In another scenario, suppose an unemancipated minor represents himself to be a major (that is, an adult).  Does that misrepresentation permit rescission?  The answer to that question depends on whether the other party reasonably believed the minor was really a major.  If his reliance was reasonable, then the contract may not be rescinded.

 

And in yet a third situation, what if a non-interdicted person (meaning, somene not formally declared by a court to be infirm in some manner, such as mental retardation), who was deprived of reason at the time of contracting, contracts with someone to perform a task.  But, when the time comes to perform, the infirmity makes performance impossible.  Can the non-interdicted person rescind the contract?  He can only upon showing that the other party knew or should have known that he did not have the requisite capacity to contract.  In this case, the crucial test will be whether a reasonable person would have dealt with the incapacitated person and not have been able to tell of the incapacity.

 

How Does One Contract in Louisiana?



A contract is formed by the consent of the parties established through offer and acceptance.

 

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.  And unless 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.  In other words, one may make a written offer, but the acceptance need not necessarily be in writing too, unless the offer required the acceptance be in writing.

 

Length of Time for Offers to be Accepted



An offer that specifies a period of time for acceptance is irrevocable (that is, it cannot be withdrawn) during that time.  If no period of time for accepting is specified, but the offeror manifests an intent to give the offerree a delay within which to accept, the period that the offer cannot be revoke will be deemed to be a "reasonable time".

 

If an irrevocable offer is not accepted within in the time specified in the offer or within a reasonable time if the offer does not state a specific time, then the offer expires.

 

An offer that is not deemed irrevocable may be revoked by the person making it at any time before it is accepted.  Revocable offers do not stay subject to acceptance without end - recovable offers expire if not accepted within a reasonable time.

 

Finally, an offer expires by the death or incapacity of the offeror or the offeree before it has been accepted.

 

Acceptance, Rejection, and Revocation of Offers



An acceptance of an irrevocable offer is effective when received by the offeror.  Likewise, a revocation of a revocable offer is effective when received by the offeree prior to acceptance.

 

Unless otherwise specified by the offer or the law, an acceptance of a revocable offer, made in a manner and by a medium suggested by the offer or in a reasonable manner and by a reasonable medium, is effective when transmitted by the offeree.  A medium or a manner of acceptance is reasonable if it is the one used in making the offer or one customary in similar transactions at the time and place the offer is received, unless circumstances known to the offeree indicate otherwise.

 

A written revocation, rejection, or acceptance is received when it comes into the possession of the addressee or of a person authorized by him to receive it, or when it is deposited in a place the addressee has indicated as the place for this or similar communications to be deposited for him.

 

When an offeror invites an offeree to accept by performance and, according to usage or the nature or the terms of the contract, it is contemplated that the performance will be completed if commenced, a contract is formed when the offeree begins the requested performance.

 

What if an offer is such that it can be accepted only by completing performance of the contract?  Once the offeree has begun to perform, the offeror cannot revoke the offer for the reasonable time necessary to complete the performance.  On the other hand, the offeree, however, is not bound to complete the performance he has begun.

 

An offeree is not completely free from obligations on his part.  For example, when the offeree begins performing and that performance either makes the offer irrevocable or constitutes acceptance, the offeree must give prompt notice when he begins to perform unless the offeror knows or should have known the performance ha begun.  An offeree who fails to give the requisite notice is liable for damages due to his failure.

Sometimes, a contract is formed even when the offeree has said nothing.  If, because of special circumstances, the offeree's silence leads the offeror reasonably to believe that a contract has been formed, the offer will be deemed accepted.  Thus, if you are the offeree, you should either make sure that you set forth a specific time to accept, or you state the manner in which the offer may be accepted.

 

An acceptance not in accordance with the terms of the offer is deemed to be a counteroffer.  Thus, whenever someone makes an offer, and the offeree attempts to accept that offer, but varies the terms of the offer in any manner, his attempt will not be considered an acceptance - it will be considered a counter-offer.  In such a case, the roles will be reversed where the original offeree will become the offeror, and vice versa.

 

Consent



Both the offeror and the offeree must voluntarily consent when they make their respective offer and acceptance.  That consent may be vitiated by error, fraud, or duress.

 

Error vitiates consent only when it concerns a cause without which the obligation would not have been incurred and that cause was known or should have been known to the other party.  An example of this would be when a buyer of a painting thinks he is buying an original painted by a certain artist, but the seller remains silent even though he knows the buyer thinks the painting is an original.  In such a case, the buyer may rescind the sale by proving error on his part and knowledge of the error on the part of the seller.

 

Fraud is a misrepresentation or a suppression of the truth made with the intention either to obtain an unjust advantage for one party or to cause a loss or inconvenience to the other.  Fraud may also result from silence or inaction.  But fraud does not vitiate consent when the party against whom the fraud was directed could have ascertained the truth without difficulty, inconvenience, or special skill.  This exception, however, does not apply when a relation of confidence has reasonably induced a party to rely on the other's assertions or representations.  An example would be when a person has purchased antiques from a seller for years and always trusted the seller.  Yet in the latest transaction, the seller knows that the piece he is selling is not an antique and still sells it to the buyer for an "antique price" while knowing the buyer thinks he is really buying an antique.  Fraud is so frowned upon by the law that the party against whom rescission is granted because of fraud is liable for damages and attorney fees.

 

The last thing that can negate consent is duress.  The duress needed to negate consent must be of such a nature as to cause a reasonable fear of unjust and considerable injury to a party's person, property, or reputation.  Age, health, disposition, and other personal circumstances of a party must be taken into account in determining reasonableness of the fear.  Duress vitiates consent also when the threatened injury is directed against the spouse, an ascendant, or descendant of the contracting party.  If the threatened injury is directed against other persons, the granting of relief is left to the discretion of the court.  A typical example of duress would be when a person enters into a contract only because someone has threatened him or a close family member.  Yet, not all threats negate consent.  In fact, a threat of doing a lawful act or a threat of exercising a right does not even rise to the level of duress.

Sales

 

General Principles



Although all sales are contracts, not all contracts are sales.  This section will cover only sales.

 

Sale is a contract whereby a person transfers ownership of a thing to another for a price in money. The thing, the price, and the consent of the parties are requirements for the perfection of a sale.

 

A sale or promise of sale of an immovable must almost always be in writing.  An exception exists for an oral transfer of immovable property when the property has been actually delivered and the transferor recognizes the transfer when interrogated on oath.  But, a sale involving immovable property, to affect third persons, must be reduced to writing and filed for registry in the parish where the property is located.

 

What Can and Cannot be Sold



Just as a person cannot purchase a thing he already owns, a person cannot validly sell something that he does not own.

 

Nevertheless, the owner of a thing may purchase the rights of a person who has, or may have, an adverse claim to the thing.  An example of this would involve an owner of land that has been adversely possessed by another person who is now claiming he is the owner by virtue of his possession.  To end the dispute, the original owner may purchase the "claim of ownership" asserted by the adverse possessor.  In that example, the original owner is not buying the thing he owns - he is, essentially, buying "peace of mind" and an end of the threat of litigation.

 

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.  Even 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.  A party who, through his fault, prevents the coming into existence of the thing is liable for damages.  An example of this type of sale would be the sale of a wooden swing by a craftsman who agrees to build the swing according to the buyer’s specifications.  Until the swing is completed, the sale is not complete.  But once the swing is completed, the buyer must pay and the seller must sell the swing.

 

A seller may even sell a "hope".  For example, a fisherman 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.  This is, obviously, a very risky type of sale where the buyer has paid a price, hoping for a haul that is valued much more than he paid.

 

The sale of a thing includes all accessories intended for its use in accordance with the law of property.

 

How Does One Perfect a Sale?



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.

 

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.

 

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.  But 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.

 

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.  An example of this would be a potential buyer telling a seller he wants to purchase a motorcycle, but wants to first view it.  If the seller agrees, and the buyer approves of the motorcycle, then the sale is completed.

 

Setting the Price of the Sale



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.

 

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.  People often transfer property to relatives by disguising it as a "sale" by calling it such and exchanging money for the property.  Such a transfer, if challenged, will not be recognized as a valid sale.

 

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.  This scenario often arises when family members are trying to divide and sell large estates that are owned in indivision.

 

On rare occasions, a seller and a buyer may not set a price.  In that case, 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.  But, if the parties intend not to be bound unless a price be agreed on, there is no sale until they agree upon a price.

 

Who Bears the Risk of a Thing that Has Been Sold?



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.  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.

 

Nevertheless, the seller is bound to deliver the thing sold and to warrant to the buyer ownership and peaceful possession of, and the absence of hidden defects in, that thing.  The seller also warrants that the thing sold is fit for its intended use.

Leases

 

General Principles



Lease is a contract by which one party, the lessor (known in common law jurisdictions as the "landlord"), binds himself to give to the other party, the lessee (known in common law jurisdiction as the "tenant"), the use and enjoyment of a thing for a term in exchange for a rent that the lessee binds himself to pay.  The consent of the parties as to the thing and the rent is essential but not necessarily sufficient for a contract of lease.

 

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.

 

Forms of Leases



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 law.

 

Types of Leases



Depending on the agreed use of the leased thing, a lease is characterized as:

 

  • Residential, when the thing is to be occupied as a dwelling

 

  • Agricultural, when the thing is a predial estate that is to be used for agricultural purposes

 

  • Mineral, when the thing is to be used for the production of minerals

 

  • Commercial, when the thing is to be used for business or commercial purposes; or

 

  • Consumer, when the thing is a movable intended for the lessee's personal or familial use outside his trade or profession.

The list above is not exclusive.  When the thing is leased for more than one of the above or for other purposes, the dominant or more substantial purpose determines the type of lease for purposes of regulation.

 

What Can be Leased?



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.

 

A lease of a thing that does not belong to the lessor may nevertheless be binding on the parties.

 

Rent



The rent may consist of money, commodities, fruits, services, or other performances that are considered onerous to the lessee.

 

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.  If the agreed method proves unworkable or the designated third person is unwilling or unable to fix the rent, then there is no lease.

 

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.

 

When the parties to an agricultural lease agree that the rent will consist of a portion of the crops, that portion is considered at all times the property of the lessor.

 

In the absence of a contrary agreement, usage, or custom:

 

1. 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.

 

2. The rent is payable at the address provided by the lessor and in the absence thereof at the address of the lessee.

 

If the lessee fails to pay the rent when due, the lessor may dissolve the lease and may regain possession in the manner provided by law.

 

In the absence of a contrary agreement, the agricultural lessee may not claim an abatement of the rent for the loss of his unharvested crops unless the loss was due to an unforeseeable and extraordinary event that destroyed at least one-half of the value of the crops.  Any compensation that the lessee has received or may receive in connection with the loss, such as insurance proceeds or government subsidies, shall be taken into account in determining the amount of abatement. When the rent consists of a portion of the crops, then any loss of the crops that is not caused by the fault of the lessor or the lessee shall be borne by both parties in accordance with their respective shares.

 

To secure the payment of rent and other obligations arising from the lease of an immovable, the lessor has a privilege on the lessee's movables that are found in or upon the leased property.  In an agricultural lease, the lessor's privilege also encompasses the fruits produced by the land.

 

The lessor's privilege extends to the movables of the sublessee but only to the extent that the sublessee is indebted to his sublessor at the time the lessor exercises his right.

 

The lessor may also lawfully seize a movable that belongs to a third person if it is located in or upon the leased property, unless the lessor knows that the movable is not the property of the lessee.  The third person may recover the movable by establishing his ownership prior to the judicial sale by intervening in the action brought by the lessor lawfully seizing the movables in the leased property. If the third person fails to do so, the movable may be sold as though it belonged to the lessee.

 

The lessor may seize the movables on which he has a privilege while they are in or upon the leased property, and for fifteen days after they have been removed if they remain the property of the lessee and can be identified.  The lessor may enforce his privilege against movables that have been seized by the sheriff or other officer of the court, without the necessity of a further seizure thereof, as long as the movables or the proceeds therefrom remain in the custody of the officer.

 

Term - Length of the Lease



The lease shall be for a term.  Its duration may be agreed to by the parties or supplied by law. 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.  It is indeterminate in all other cases.

 

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.

 

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 as follows:

 

  • An agricultural lease shall be from year to year

 

  • Any other lease of an immovable, or a lease of a movable to be used as a residence, shall be from month to month

 

  • 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

 

Obligations of the Lessor (Landlord)

 The lessor is bound:

 

1. To deliver the thing to the lessee;

 

2. To maintain the thing in a condition suitable for the purpose of which it was leased; and

 

3. To protect the lessee's peaceful possession for the duration of the lease.

 

4. To deliver the thing at the agreed time and in good condition suitable for the purpose for which it was leased.

 

5. To pay all taxes, assessments, and other charges that burden the thing, except those that arise from the use of the thing by the lessee.

 

6. 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.

 

During the lease, the lessor may not make any alterations in the thing. 

 

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.  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.

 

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.  This warranty also encompasses vices or defects that are not known to the lessor.  And in a residential lease, this warranty applies to all persons who reside in the premises in accordance with the lease.  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. 

 

The warranties just mentioned may be waived, but only by clear and unambiguous language that is brought to the attention of the lessee.  Nevertheless, a waiver of warranty is ineffective:

 

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. To the extent, in advance, it excludes or limits the liability of one party for intentional or gross fault that causes damage to the other party, and, in advance, it excludes or limits the liability of one party for causing physical injury to the other party.

 

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.

 

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.  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.  But, the lessor is not bound to protect the lessee's possession against a disturbance caused by a person who does not claim a right in the leased thing.  In such a case, the lessee may file any appropriate action against that person.

 

The lessor is bound to take all steps necessary to protect the lessee's possession against any disturbance just mentioned, as soon as the lessor is informed of such a disturbance.  If the lessor fails to do so, the lessee may, without prejudice to his rights against the lessor, file any appropriate action against the person who caused the disturbance.  If a third party brings against the lessee an action asserting a right in the thing or contesting the lessee's right to possess it, the lessee may join the lessor as a party to the action and shall be dismissed from the action, if the lessee so demands.

 

Obligations of the Lessee (Tenant)



The lessee is bound:

 

1. To pay the rent in accordance with the agreed terms.

 

2. To use the thing as a prudent administrator and in accordance with the purpose for which it was leased.

 

3. 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.

 

4. 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.

 

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.

 

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.  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.

 

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.

 

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:

 

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

 

  • If the lessee does not remove the improvements, the lessor may:

(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

 

(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.

 

(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.

 

Effects on Leases When Leased Property is Transferred



The transfer of the leased thing does not terminate the lease, unless the contrary had been agreed between the lessor and the lessee.  A third person who acquires an immovable that is subject to an unrecorded lease is not bound by the lease.  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.  From a practical standpoint, what does this mean?

 

It should be obvious that the lessee (tenant) is at the "mercy" of the lessor (landlord) if the leased property happens to be an immovable and does not take steps to protect his lease.  In most instances, lessees who lease immovable property do so for a term longer than month-to-month.  Thus, before signing a lease for immovable property, the lessee should assure himself of several things:

 

1. The lease does not provide for a termination of the lease if the lessor sells the property.

 

2. The lease has been recorded so that if the lessor sells the immovable property, the buyer will be bound by the lease.

 

Subletting



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.  A provision that prohibits one of these rights is deemed to prohibit the others, unless a contrary intent is expressed. In all other respects, a provision that prohibits subleasing, assigning, or encumbering is to be strictly construed against the lessor.

 

Termination of Leases



If the leased thing is lost or totally destroyed, without the fault of either party, or if it is expropriated (that is, taken by a governmental body for public use), the lease terminates and neither party owes damages to the other.

 

If, without the fault of the lessee, the thing is partially destroyed, lost, or expropriated, or its use is otherwise substantially impaired, the lessee may, according to the circumstances of both parties, obtain a reduction of the rent or dissolution of the lease, whichever is more appropriate under the circumstances.  If the lessor was at fault, the lessee may also demand damages.

 

If the impairment of the use of the leased thing was caused by circumstances external to the leased thing, the lessee is entitled to a dissolution of the lease, but is not entitled to a reduction of the rent.

 

A lease granted by a usufructuary (meaning a person who has the right to use and enjoy the fruits of a thing) terminates upon the termination of the usufruct.  The lessor is liable to the lessee for any loss caused by such termination, if the lessor failed to disclose his status as a usufructuary.

 

A lease does not terminate by the death of the lessor or the lessee or by the cessation of existence of a juridical person that is party to the lease.

 

A lease in which one or both parties have reserved the right to terminate the lease before the end of the term, may be terminated by giving the notice (which may not be renounced in advance) specified in the lease contract or the notice provided as follows, whichever period is longer:

 

A lease with an indeterminate term, including a reconducted lease or a lease whose term has been established by law because the parties to the lease did not specify a term, terminates by notice to that effect given to the other party by the party desiring to terminate the lease.

 

This notice shall be given at or before the time specified below:

 

1. In a lease whose term is measured by a period longer than a month, thirty calendar days before the end of that period;

 

2. In a month-to-month lease, ten calendar days before the end of that month;

 

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

 

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.

 

Surrender of possession to the lessor at the time at which notice of termination shall be given as outlined above shall constitute notice of termination by the lessee.

 

The notice of termination 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.

 

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.