Comment by M. Isabel Medina
Do I understand that the whole estate is found to have been absorbed in costs?
John Purchaser entered into an agreement with Jane Vendor to buy an on-line computer system with inventory control capability. Jane Vendor undertook to install the system and develop an inventory control program that would suit John Purchaser's specific needs within a year from the date the contract was entered into. At the time of contracting, Jane Vendor was aware that substantial technical problems had been encountered with her computer system and that revisions of the system were underway. Vendor at no time alluded to this fact during the contracting process with Purchaser.
Jane Vendor's specialists attended several meetings with Purchaser to discuss Purchaser's needs and visited Purchaser's plant. Installation of the system began seven months after the execution of the contract. At this time, it became clear to Vendor that the system Purchaser contracted to buy had so many design problems that it would be in her best interests to abandon the system. It also became clear that the system would be incapable of accommodating the inventory control program she had undertaken to provide Purchaser. Due to her firm's financial problems and in order to delay, she proceeded with installation of the Purchaser contract.
Installation of the system was completed on the day agreed upon in the contract. The system did not function and the inventory control program was inadequate. Subsequently, Purchaser instituted an action in state court seeking damages for Vendor's breach of the purchase agreement. He also requested damages of reasonable attorney fees for bad faith breach of contract.
Under Louisiana law, John Purchaser is entitled to enforcement of the agreement he entered into with Vendor. However, specific performance is impossible in this case because Vendor is unable to perform. Damages, then, to the extent that Purchaser suffered a measurable loss, are recoverable. Ostensibly, John Purchaser has been given the benefit of his bargain and placed in the position he would have occupied had the promise been performed. In actuality, however, the enforcement of the purchase agreement has cost John Purchaser a substantial amount of money in attorney fees, damages that, under current judicial interpretations of Louisiana law, Purchaser is not entitled to receive.
This Comment examines Louisiana law on attorney fees in breach of contract claims and argues that the Louisiana Civil Code and the goals underlying contract damages mandate that Louisiana courts award attorney fees in bad faith breach of contract actions.
About the Author
M. Isabel Medina.
Citation
61 Tul. L. Rev. 1173 (1987)