Opinion Number ( 2008 )

Dear Commissioner Strain:

Your request for an Attorney General's Opinion has been assigned to me for research and reply. You have asked for an opinion regarding whether a producer and purchaser of rice may, by contract, derogate from the prompt payment requirements of La.R.S. 3:3414.2(F), which provides that "each purchaser shall pay for the rice purchased from each producer under a bid contract no later than the tenth calendar day after the purchaser takes possession of the rice or receives accurate distribution instructions from the seller, whichever is later."

Under La. Civ. Code Art. 1971, parties have freedom to contract for any object that is lawful, possible, and determined or determinable. Such freedom "signifies that parties to an agreement have the right and power to construct their own bargains." Louisiana Smoked Products, Inc. v.Savoie's Sausage and Food Products, Inc., 96-1716, 96-1727 (La. 7/1/97),696 So. 2d 1373, 1380-1381 (La. 7/1/97) (citing Blake D. Morant, ContractsLimiting Liability: A Paradox with Tacit Solutions, 69 Tul. L.Rev. 715 (1995)). The exception is where the government or the state has restricted the parties' right to contract because the proposed bargain has a deleterious effect on the public or otherwise violates public policy. Louisiana Smoked Products, 696 So.2d at 1381.

The statutory interpretation of "shall" is set forth in La.R.S. 1:3, which provides that:

Words and phrases shall be read with their context and shall be construed according to the common and approved usage of the language. Technical words and phrases, and such others as may have acquired a peculiar and appropriate meaning in the law, shall be construed and understood according to such peculiar and appropriate meaning.

The word "shall" is mandatory and the word "may" is permissive.

As we stated in Atty. Gen. Op. No. 03-0401, "the word ``shall' as used in statutes, contracts, or the like, is generally imperative or mandatory. In common or ordinary parlance, the term "shall" is a word of command, and one which must be given a compulsory meaning. It has the significance of excluding the idea of discretion, and operates to impose a duty which must be enforced, particularly when used in cases involving public policy or the public interest."

Given the use of the term "shall" in La.R.S. 3:3414.2(F), it is our opinion that the prompt payment requirements set forth in that statute are mandatory and cannot be altered by contract.

We trust this adequately responds to your request. However, if our office can be of further assistance, please do not hesitate to contact us.

Yours very truly,

JAMES D. "BUDDY" CALDWELL

Attorney General

By: ___________________

BENJAMIN A. HUXEN II

Assistant Attorney General

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