to whatsoever is incident to such contracts, the party, who violates them, is liable, as one of the incidents of his obligations, to the payment of the damages, which the other party has sustained by his default.

ART. 1925.-A contract may be violated, either actively by doing something inconsistent with the obligation it has proposed, or passively by not doing what was covenanted to be done, or not doing it at the time, or in the manner stipulated or implied from the nature of the

contract.

ART. 1926.-When there is an active violation of the contract, damages are due from the moment the act of contravention has been done, and the creditor is under no obligation to put the debtor in default, in order to entitle him to his action.

ART. 1927.-When the breach has been passive only, damages are due from the time that the debtor has been put in default, in the manner directed in this title.

The rules contained in this and the preceding articles, however, are subject to the following exceptions and modifications:

1. When the thing to be given or done by the contract was of such a nature, that it could only be given or done within a certain time, which has elapsed, or under certain circumstances, which no longer exist, the debtor need not be put in legal delay to entitle the creditor to damages;

2. Where, by a fortuitous event or irresistible force, the debtor is hindered from giving or doing what he has contracted to give or do, or is from the same causes compelled to do what the contract bound him not to do, no damages can be recovered for the inexecution of the contract;

3. There are two exceptions to the last rule; first, when the party in default has by his contract expressly or implicitly undertaken the risk of the fortuitous event,

or of the irresistible force; secondly, if the fortuitous event, or case of force, was preceded by some fault of the debtor, without which the loss would not have happened.

4. Although the responsibility of the debtor for the object he was bound to deliver, is incurred from the moment he is put in default, yet if it is lost by some fortuitous event or irresistible force, by which it would also have been lost, had it been in the hands of the creditor, the debtor is not answerable for the value, but only for the delay.

ART. 1928. Where the object of the contract is any thing but the payment of money, the damages due to the creditor for its breach are the amount of the loss he has sustained, and the profit of which he has been deprived, under the following exceptions and modifications:

1. When the debtor has been guilty of no fraud or bad faith, he is liable only for such damages as were contemplated, or may reasonably be supposed to have entered into the contemplation of the parties at the time of the contract. By bad faith in this and the next rule, is not meant the mere breach of faith in not complying with the contract, but a designed breach of it from some motive of interest or ill will;

2. When the inexecution of the contract has proceeded from fraud or bad faith, the debtor shall not only be liable to such damages as were, or might have been foreseen at the time of making the contract, but also to such as are the immediate and direct consequence of the breach of that contract; but even when there is fraud, the damages cannot exceed this;

3. Although the general rule is, that damages are the amount of the loss the creditor has sustained, or of the gain of which he has been deprived, yet there are cases in which damages may be assessed without calculating

altogether on the pecuniary loss, or the privation of pecuniary gain to the party. Where the contract has for its object the gratification of some intellectual enjoyment, whether in religion, morality, or taste, or some convenience or other legal gratification, although these are not appreciated in money by the parties, yet damages are due for their breach: a contract for a religious or charitable foundation, a promise of marriage, or an engagement for a work of some of the fine arts, are objects and examples of this rule.

In the assessment of damages under this rule, as well as in cases of offences, quasi offences, and quasi contracts, much discretion must be left to the judge or jury, while in other cases they have none, but are bound to give such damages under the above rules as will fully indemnify the creditors, whenever the contract has been broken by the fault, negligence, fraud or bad faith of the debtor;

4. If the creditor be guilty of any bad faith, which retards or prevents the execution of the contract, or if, at the time of making it, he knew of any facts that must prevent or delay its performance, and concealed them from the debtor, he is not entitled to damages;

5. Where the parties, by their contract, have determined the sum that shall be paid as damages for its breach, the creditor must recover that sum, but is not entitled to more. But when the contract is not executed in part, the damages agreed on by the parties may be reduced to the loss really suffered, and the gain of which the party has been deprived, unless there has been an express agreement that the sum fixed by the contract shall be paid, even on a partial breach of the agreement.

ART. 1929.-The damages due for delay in the performance of an obligation to pay money, are called interest. The creditor is entitled to these damages without

proving any loss, and whatever loss he may have suffered he can recover no more.

ART. 1930.-Interest is of two kinds, conventional, and legal; the rate of both is fixed by law in the chapter on loans on interest.

ART. 1931.-In contracts stipulating a conventional interest, it is due without any demand, from the time stipulated for its commencement until the principal is paid.

ART. 1932.-In contracts, which do not stipulate for the payment of interest, it is due from the time the debtor is put in default for the payment of the principal, and is to be calculated on whatsoever sum shall be found by the judgment to have been due at the time of the default.

ART. 1933.-When the sum is due for property yielding a revenue, interest is due from the time the principal is payable, without any demand.

ART. 1934.-Interest upon interest cannot be recovered, unless it be added to the principal, and by another contract made a new debt. No stipulation to that effect in the original contract is valid.

ART. 1935.-In cases where no conventional interest is stipulated, the legal interest, at the time the defendant was put in default, shall be recovered, although the rate may have been subsequently changed by law.

ART. 1936.-The surety, who is obliged to pay money for his principal, is not bound by the preceding rule respecting interest on interest; he shall receive interest on the whole sum he has paid, whether for principal or interest from the time of the payment, without any demand.

ART. 1937.-The interest on loans, on bottomry and respondentia, may also exceed the rate of legal or conventional interest.

ART. 1938.-The debtor is liable only to such damages as were foreseen, or might have been foreseen at the

time of contracting, when it is not owing to his fraud, that the obligation has not been executed.

ART. 1939.-Sums, which are due for yearly rents, for annuities, either for ever or for life, bear interest from the day the debtor was in default, either by the terms of his agreement or otherwise. The same rule applies to sums due for the restitution of profits, or for interest paid by a third person in discharge of the debtor.

SECTION V.

Of the Interpretation of Agreements.

ART. 1940.-Legal agreements having the effects of law upon the parties, none but the parties can abrogate or modify them. Upon this principle are established the following rules:

1. That no general or special legislative act can be so construed as to avoid or modify a legal contract previously made;

2. That courts are bound to give legal effect to all such contracts according to the true intent of all the parties;

3. That the intent is to be determined by the words of the contract, when these are clear and explicit, and lead to no absurd consequence;

4. That it is the common intent of the parties, that is, the interest of all, that is to be sought for; if there was a difference in this intent, there was no common consent, and consequently no contract.

All the articles of this section contain rules established by law for discovering the intent, when either the words of the agreement are ambiguous, or circumstances render it doubtful. They apply as well to verbal as to written agreements.

ART. 1941.-The words of a contract are to be understood, like those of a law, in the common and usual signification, without attending so much to grammatical rules, as to general and popular use.