Opinion ID: 1143085
Heading Depth: 1
Heading Rank: 4

Heading: The Louisiana Credit Agreement Statute

Text: The Louisiana Legislature in 1989 enacted La.Rev.Stat. 6:1121-1124, which in effect provides a statute of frauds in actions based on credit agreements as defined in the statute. The Louisiana statute is modelled after the Minnesota statute, discussed above. La.Rev.Stat. 6:1121 is a definitional section that defines the key terms. The pertinent term here is credit agreement, which is defined as an agreement to lend or forbear repayment of money or goods or to otherwise extend credit, or make other financial accommodation. La.Rev.Stat. 6:1122 expressly prohibits an action against the creditor based on an oral credit agreement, providing that [a] debtor shall not maintain an action on a credit agreement unless the agreement is in writing, expresses consideration, sets forth relevant terms and conditions, and is signed by the creditor and the debtor. La.Rev.Stat. 6:1123 A addresses specific actions by the lender that shall not give rise to a claim that a new credit agreement is created. Pertinent among the activities that do not give rise to a new credit agreement are [t]he agreement of a creditor to take or not to take certain actions, such as entering into a new credit agreement, forbearing from exercising remedies under a prior credit agreement, or extending installments due under a prior credit agreement. [5] La.Rev.Stat. 6:1123 A(3). This section in effect treats certain actions or representations of creditors as if they were credit agreements and requires that they be put in writing to be enforceable. La.Rev.Stat. 6:1123 B prevents a debtor's pleading around the prohibition against actions in contract, providing that [a] credit agreement shall not be implied from the relationship, fiduciary or otherwise, of the creditor or the debtor. The Louisiana statute does not address, one way or the other, any protection of unsophisticated borrowers or any exemption based on fraud, misrepresentation, promissory estoppel or other equitable theory.