simulated contract

Civil law. A contract that, by mutual agreement, does not express the true intent of the parties. La. Civ. Code art. 2025.

• A simulated contract is absolute when the parties intend that the contract will impose no obligations; no obligations are enforceable on the parties by such a contract. A simulated contract is relative if the parties intend it to impose obligations different from those recited in the contract; the intended obligations are enforceable if all relevant conditions are met. A simulated contract may affect the rights of third parties. See action en declaration de simulation under ACTION(4).

— Also termed simulation. [Cases: Fraudulent Con-veyances 1, 24(1).]


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