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La. Civ. Code Ann. art. 2021 states: Conditional obligations are made to depend on an uncertain event. If the obligation is not to take effect until the event happens, it is a suspensive condition; if the obligation takes effect immediately, but is liable to be defeated when the event happens, it is then a resolutory condition.
Defendant-appellant Reo Construction Inc. was hired as a general contractor to construct a new funeral home. At the request of the architect for the project, plaintiff Holmes Brick & Salvage Co. Inc. examined the property and gave an estimate setting the price at which plaintiff would demolish and remove the two existing buildings on the property. Plaintiff made an estimate which consisted of two parts, first, the charge for demolishing and removing a certain smaller building on the rear of the property, and second, the charge for demolishing and removing the large building on the front of the property which housed the old funeral home. Plaintiff’s president testified that the second phase of the contract was to be performed at a time designated by the defendant, which stipulation was included in the contract. It was established that the first phase of the contract was performed by the plaintiff and payment in full was received therefor. But defendant never called upon to perform the second phase of the contract, it was performed by someone else. In that event, plaintiff filed a suit with damages against the defendant alleging breach of contract. Plaintiff obtained judgment by default and defendant sought review and argued that the contract was suspensive under La. Civ. Code Ann. art. 2021 as the obligation did not take effect until the occurrence of an uncertain event.
Was the contract in question suspensive under La. Civ. Code Ann. art. 2021?
The court affirmed the default judgment. The court held that all the terms of the contract were certain except the time of performance which the defendant-appellant was to designate. The court ruled that the "event" of demolition was certain. The only element of uncertainty was pertaining to when the demolition would become necessary. Clearly, the contract was not suspensive. Moreover, the court held that the words "at a time designated by you" cannot be construed to mean that the appellant reserved the right to refrain from ever requesting the plaintiff-appellees' performance. Because this was not a case of a contract that leaves the defendant the option of requesting the plaintiff's performance. However, the court remanded the case on the issue of damages to determine the amount of loss the appellee sustained and the profit of which he had been denied.