Contracts
Under Louisiana law, a contract obtained through fraud is:
AVoid from the beginning
BVoidable at the option of the defrauded party✓ Correct
CBinding on both parties until a court order
DAutomatically enforceable after 90 days
Explanation
A contract obtained through fraud in Louisiana is voidable, not void — the defrauded party may choose to rescind the contract or affirm it and seek damages. Only the defrauded party (not the fraudulent party) may exercise this option.
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Key Terms to Know
Purchase Agreement
A legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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