Will a Louisiana court excuse late or non-performance under this force-majeure clause, or under the Civil Code even with no clause at all?
Louisiana’s doctrine for excused non-performance is not force majeure but "fortuitous event" (cas fortuit), and it excuses performance by operation of law even in a contract that says nothing about it. The Civil Code is not silent on the words force majeure, so do not treat their absence as the reason: arts. 577, 583 and 613 use them, art. 583 being headed "Ruin from accident, force majeure , or age" with the space before the comma exactly as published. Those are usufruct articles, and none of them governs performance of a conventional obligation, so a Louisiana force-majeure clause is measured against arts. 1873 to 1878 and not against any Code definition of its own name. Civil Code art. 1873: "An obligor is not liable for his failure to perform when it is caused by a fortuitous event that makes performance impossible." Article 1875 supplies the definition, and it is a FORESEEABILITY test measured at formation: "A fortuitous event is one that, at the time the contract was made, could not have been reasonably foreseen." If the event destroys the ENTIRE performance owed, art. 1876 dissolves the contract outright: "When the entire performance owed by one party has become impossible because of a fortuitous event, the contract is dissolved." The same article then orders restitution: "The other party may then recover any performance he has already rendered." The one Louisiana opinion cited here does NOT apply the doctrine, and should not be read as if it did: in Creole Gardens, L.L.C. v. Schreiber the Fourth Circuit quoted arts. 1994, 1873 and 1986 only as the appellant's argument for a French-style "obligation of result" ("Creole Gardens contends the obligation of result concept is supported by La. C.C. arts. 1994, 1873, and 1986, which, when read in paria materia, holds the obligor liable ... unless the failure to perform was caused by a fortuitous event") and rejected the argument ("notwithstanding that confluence and any theoretical support for the doctrine provided by La. C.C. articles 1994, 1873, and 1986, Creole Gardens' argument that the district court committed legal error in not applying the obligation of result doctrine is fundamentally flawed") deciding the case under the redhibition articles instead and affirming the judgment against Creole Gardens. This rule therefore rests on the Code's own text; no opinion excusing a commercial obligor under art. 1873 is cited, and that gap is stated rather than papered over.
The trap
The Code's own liability-preserving exceptions inside art. 1873 are easy to miss when a drafter assumes "impossible" always wins: an obligor who ASSUMED THE RISK of the fortuitous event is liable anyway; an obligor who was already IN DEFAULT when the event struck is liable; and an obligor whose own prior FAULT preceded and contributed to the failure is liable: the article states all three as exceptions in the same breath as the general excuse. Partial impossibility does not automatically dissolve the whole deal: art. 1877, "the court may reduce the other party's counterperformance proportionally, or, according to the circumstances, may declare the contract dissolved". Reduction, not automatic dissolution, is the Code's own first-listed option. And a fortuitous event that strikes AFTER partial performance does not erase what has already changed hands: art. 1878 binds the obligee "only to the extent that he was enriched by the obligor's partial performance," a restitution-style, not all-or-nothing, remedy. Finally, art. 1875's foreseeability test is fixed at CONTRACT FORMATION: an event that was foreseeable when the parties signed does not become a fortuitous event later just because it in fact was not anticipated by the party invoking it.
10 authorities
- statuteLa. Civ. Code art. 1873enactment date not established
The words that state the rule
An obligor is not liable for his failure to perform when it is caused by a fortuitous event that makes performance impossible.
- statuteLa. Civ. Code art. 1875enactment date not established
The words that state the rule
A fortuitous event is one that, at the time the contract was made, could not have been reasonably foreseen.
- statuteLa. Civ. Code art. 1876enactment date not established
The words that state the rule
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.
- statuteLa. Civ. Code art. 1877enactment date not established
The words that state the rule
When a fortuitous event has made a party's performance impossible in part, the court may reduce the other party's counterperformance proportionally, or, according to the circumstances, may declare the contract dissolved.
- caseNo. 2019-CA-0105 (La. Ct. App. 4th Cir. Sept. 25, 2019)Creole Gardens, L.L.C. v. Klaus-Peter F. Schreiber and Sarah Leonard SchreiberLa. Ct. App.decided 2019
The words that state the rule
Creole Gardens contends the obligation of result concept is supported by La. C.C. arts. 1994, 1873, and 1986, which, when read in paria materia, holds the obligor liable to the obligee for damages arising out of the obligor’s failure to perform a conventional obligation, unless the failure to perform was caused by a fortuitous event.
- caseNo. 2019-CA-0105 (La. Ct. App. 4th Cir. Sept. 25, 2019)Creole Gardens, L.L.C. v. Klaus-Peter F. Schreiber and Sarah Leonard SchreiberLa. Ct. App.decided 2019
The words that state the rule
notwithstanding that confluence and any theoretical support for the doctrine provided by La. C.C. articles 1994, 1873, and 1986, Creole Gardens’ argument that the district court committed legal error in not applying the obligation of result doctrine is fundamentally flawed.
- caseNo. 2019-CA-0105 (La. Ct. App. 4th Cir. Sept. 25, 2019)Creole Gardens, L.L.C. v. Klaus-Peter F. Schreiber and Sarah Leonard SchreiberLa. Ct. App.decided 2019
The words that state the rule
We conclude that Creole Gardens’ Petition asserts redhibition claims, contractual in nature, arising from an alleged breach of warranty of the thing sold by the sellers, the Schreibers. La. C.C. art. 2548 clearly delineates Creole Gardens’ rights as the buyer to acquire property free of redhibitory defects known by the Schreibers in an “as is” sale. Consequently, we find no legal error in the district court’s reliance on our redhibition statutes, particularly, La. C.C. art. 2548, to determine the Schreibers’ breach of warranty against fire code violations and Creole Gardens’ burden of proof. Accordingly, this assignment of error lacks merit.
- statuteLa. Civ. Code art. 1873enactment date not established
The words that state the rule
An obligor is, however, liable for his failure to perform when he has assumed the risk of such a fortuitous event. An obligor is liable also when the fortuitous event occurred after he has been put in default. An obligor is likewise liable when the fortuitous event that caused his failure to perform has been preceded by his fault, without which the failure would not have occurred.
- statuteLa. Civ. Code art. 1878enactment date not established
The words that state the rule
If a contract is dissolved because of a fortuitous event that occurred after an obligor has performed in part, the obligee is bound but only to the extent that he was enriched by the obligor's partial performance.
- statuteLa. Civ. Code art. 583enactment date not established
The words that state the rule
Art. 583. Ruin from accident, force majeure , or age Neither the usufructuary nor the naked owner is bound to restore property that has been totally destroyed through accident, force majeure , or age.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.