General Information

All persons have capacity to contract, except unemancipated minors, interdicts, and persons deprived of reason at the time of contracting. La. Civ. Code art. 1918. While there is a presumption is that all persons have the capacity to contract. Florida v. Stokes, 2005-2004 (La. App. 1 Cir. 9/20/06), 944 So.2d 598, 603. A contract made by a person without legal capacity is relatively null. La. Civ. Code art. 1919. A noninterdicted person, who was deprived of reason at the time of contracting, may obtain rescission of an onerous contract upon the ground of incapacity only upon showing that the other party knew or should have known that person's incapacity. La. Civ. Code. art. 1925. Lack of capacity must be shown by clear and convincing evidence. Florida, 944 So.2d at 603; Fontanille v. Robertson, 2020 La. App. Unpub. LEXIS 95, at *16 (App. 1 Cir. May 28, 2020). 

A contract is formed by the consent of the parties established through offer and acceptance. La. Civ. Code art. 1927. As such a “meeting of the minds” is essential to that consent. Belin v. Dugdale, 45,405 (La. App. 2 Cir. 6/30/10), 43 So. 3d 272.; Haygood v. Haygood, 52435 (La. App. 2 Cir. 01/16/19); 264 So. 3d 1226, 1229. 

The law has long been clear that in order to find that there was an agreement between the parties and have consent pursuant to La. Civ. Code art. 1927, the court must find that there was a meeting of the minds of the parties. Furthermore, it is horn book law that the consent of the parties is necessary to form a valid contract and where there is no meeting of the minds between the parties the contract is void for lack of consent. Mark A. Gravel Props., LLC v. Eddie's BBQ, LLC, 14-46 (La. App. 3 Cir. 05/07/14); 139 So. 3d 653, 654. 

Consent may be vitiated by error, fraud, or duress. La. Civ. Code art. 1948. “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.” La. Civ. Code art. 1953. “Error induced by fraud need not concern the cause of the obligation to vitiate consent, but it must concern a circumstance that has substantially influenced that consent.” La. Civ. Code art. 1955.

Nevertheless, 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. However, this exception does not apply when a relation of confidence has reasonably induced a party to rely on the other's assertions or representations. La. Civ. Code art. 1954. Fraud need only be proven by a preponderance of the evidence and may be established by circumstantial evidence. La. Civ. Code art. 1957. Thus, there are three basic elements to an action for fraud against a party to a contract: (1) a misrepresentation, suppression, or omission of true information; (2) the intent to obtain an unjust advantage or to cause damage or inconvenience to another; and (3) the error induced by a fraudulent act must relate to a circumstance substantially influencing the victim's consent to (a cause of) the contract. Minton v. Acosta, 2021-1180, p. 10 (La. App. 1 Cir. 6/3/22); 343 So.3d 721, 730.

Parties are free to contract for any object that is lawful, possible, and determined or determinable. La. Civ. Code art. 1971. A contractual object is possible or impossible according to its own nature and not according to the parties’ ability to perform. La. Civ. Code art. 1972. An obligation without a cause, or with a false or unlawful cause, can have no effect. La. Civ. Code  art. 1893. Liability for nonperformance of contractual obligations was not to be gauged by the means or ability of the party to fulfill his agreement, but by the nature of the thing which formed the object of the agreement. Barbour v. Barbour, 228 La. 823, 825, 84 So.2d 205, 205 (1955).

An obligation cannot exist without a lawful cause. La. Civ. Code art. 1966. Cause is the reason why a party obligates himself. La. Civ. Code art. 1967. An obligation may be valid even though its cause is not expressed. La. Civ. Code art. 1969. When the expression of a cause in a contractual obligation is untrue, the obligation is still effective if a valid cause can be shown. La. Civ. Code art. 1970. 

Unlike other states, Louisiana recognizes "cause" instead of "consideration" as the basis for contracts. This means contracts must have a lawful purpose but do not necessarily require an exchange of value.

A unilateral error may invalidate a contract when an error exists as to a fact that was a cause for making the contract and when the party who induced the error knew or should have known that it was the cause.(Emphasis added.) LaCross v. Cornerstone Christian Acad. of Lafayette, Inc., 2004-341, p. 2 (La. App. 3 Cir. 12/15/04); 896 So.2d 105, 107–08, writ denied, 2005-0128 (La. 3/24/05); 896 So.2d 1037. Evenso, “[c]omment (d) to La. Civ. Code art. 1950, specifically, states that a party may obtain relief if s/he intended to contract with a certain person or a person of a certain quality or character and the other party lacked the intended quality or character. Id. at 3. Furthermore, “[e]ven when an obligation has multiple causes, error that bears on any one of them is sufficient to make the obligation invalid.” Id. 

Common Types of Contracts in Louisiana

A. Business & Commercial Contracts

• Partnership agreements
• LLC operating agreements
• Non-compete agreements (Limited in scope due to Louisiana’s strict laws)
• Confidentiality & Non-disclosure agreements (NDAs)
• Vendor & supply contracts

B. Real Estate & Property Contracts

• Purchase agreements
• Lease agreements (residential & commercial)
• Title transfer & deeds
• Construction contracts
• Home improvement contracts (For projects $7,500 - $75,000, a Home Improvement Registration is required)

C. Construction Contracts

• General contractor agreements
• Subcontractor agreements
• Homeowner construction contracts (For projects over $75,000, a Residential Contractor’s License is needed)
• Lien waivers & releases to protect against unpaid work claims

D. Estate & Personal Contracts

• Wills & trusts (Louisiana follows forced heirship laws, impacting estate planning)
• Prenuptial & postnuptial agreements
• Power of attorney & healthcare directives

E. Government & Public Contracts

• State contracts for construction, services, or goods
• Public bid agreements under Louisiana’s Public Bid Law

You Need to Know Special Louisiana Contract Laws

Louisiana has unique legal rules that impact contract drafting and enforcement:

A. "Cause" vs. "Consideration"

Unlike other states that require "consideration" (exchange of value), Louisiana contracts only need a lawful reason (cause) for being made.

B. Non-Compete Agreements

Highly restricted under Louisiana law.

Must specify a geographic area and time limit (max 2 years).

Cannot ban someone from working in an entire industry.

C. Construction & Home Improvement Contracts

Must be in writing if over $50,000.

Contractors must be licensed for work over certain amounts.

Contractors cannot demand full payment upfront—only a reasonable deposit.

D. Force Majeure (Acts of God)

Hurricanes, floods, or other disasters may excuse performance under a contract.

Louisiana courts may enforce or void contract obligations based on extreme events.

E. Redhibition (Hidden Defects in Property Sales)

Louisiana has a unique redhibition law, allowing buyers to cancel a sale if a hidden defect makes a property or item useless.

✔ Ensures contracts comply with Louisiana law (civil code rules differ from common law).

✔ Protects your rights by ensuring fair terms, avoiding loopholes, and preventing fraud.

✔ Prevents legal disputes by clarifying obligations and dispute resolution methods.

✔ Negotiates better contract terms for real estate, business, or employment agreements.

✔ Ensures enforceability in court if the other party breaches the agreement.