A buyer and seller in Covington execute a purchase agreement for a commercial property. The agreement contains a clause stating: 'This sale shall be null and void if the buyer, at his sole discretion, decides not to proceed with the purchase for any reason within 30 days of signing.' Under Louisiana Civil Code, what is the legal status of this condition?
Correct Answer
B) It is a null potestative condition because it depends solely on the will of the obligor (buyer)
Under Louisiana Civil Code Art. 1770, a suspensive condition that depends solely on the will of the obligor (the party who owes the obligation) is null. This is called a purely potestative condition. The clause described — allowing the buyer to void the contract 'at his sole discretion' for any reason — makes the buyer's obligation entirely dependent on the buyer's own arbitrary will, with no objective criterion. Since the buyer is the obligor (the one obligated to purchase), this purely potestative condition renders the obligation null under Art. 1770. The contract would be unenforceable against the buyer.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Offer and acceptance is the process by which one party proposes specific terms for a contract and the other party agrees to those exact terms, creating mutual assent. This mutual agreement, also called a meeting of the minds, is an essential element of every valid contract.
An option contract gives one party the exclusive right, but not the obligation, to purchase or lease a property at a specified price within a specified time period. The buyer pays option consideration to keep the option open.
A purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions for the sale of real property. It is also commonly called a sales contract, purchase and sale agreement, or earnest money agreement.
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