Property Rules, Liability Rules and Inalienability - Term Paper Example

Law 7 May Property Rules, Liability Rules and Inalienability Introduction Property ownership, leasing, ized means of acquisition, use and sale is recognized by law in nations all over the world. The law on ownership and transfer of property has evolved over time to be recognized by the modern governments. From the pre-colonial times to the emergence of feminism, the law has changed to promote equity, give women rights to ownership of property, and guide society on rules pertaining relationship’s property, individual or group ownerships and land properties. The interpretation of some property laws however varies in different countries, but all work to promote order and coexistence of people in the societies. The society subject to the law have therefore an obligation to act in accordance to the property law, failure to which, they are indebted to the law as a liability for failing to comply to the legal expectation. Unlike the property rule, where the consent of the owners of the property is required for transfer of property, the liability rule is interfered by the legal system, who determine the cost incurred as the obligation to fulfill on the part of the liable person (“Property rule” 1- 4). The inalienability rule acts differently by preventing transfer of entitlements to protect and even regulate the activities of granting the property. It puts aside the parties involved (willing buyer and seller), and allow the government by authority to intervene the next actions (whether to stop the transfer, plan for compensation, or determine ownership among others) depending on the investigation outcomes of the dispute. 2. Property Rules 2.1. Ownership Ownership of properties by the people receives varying degrees of protection from the legal government society. Whatever an individual, group, or community owns is prevented from the harassment and destruction that may be carried out by the excluded parties, so that the owners can freely enjoy their legal rights. Properties are lawfully recognized as a right that an individual or group has over an ownership of things, which they can use and can exclude others; it is divided into two, real (rights to land and anything attached to it) and personal property (chattels and intangible personal property as other possessions apart from land) (“LexisNexis” 2). Property rule emphasizes on the protection of an entitlement for an individual or persons, which they deserve with a property right. Since property entails a bundle of rights, the law itself protects the owner, so that he can exercise his rights over his property (rights to possess, use, transfer and pass on, transform and even block others from interference). “A property rule implies the prohibition on the invasion and a right to enjoin offenders” (Bergkamp 210). This possibly means that in a dispute where one violates the property rule, the offended can obtain a legal plea for a restoration. 2.2. Transfer Ownership is recognized as the primary right from which all the other rights attached to the property may be derived. Possession of the property refers to any object, whether tangible or intangible; this is however different in Dutch and German law that limit ownership of tangible objects (Bouckaert 34). Today software, systems, published work, stock, bonds and tangible assets (buildings, machines, and estates) can be owned as private properties. Take an example that P intends to use Q’s track against her wish. Q’s track being protected by the law, Q can prevent P from executing the illegal intension via a court order that forbids P’s action as the first protection measure. If P ignores the legal order and uses the Q’s property (as a violation of her right), P is issued with an order for restitution by the court. Suppose the restoration of the property is impossible to achieve (probably because it was destroyed while in P’s hands), then compensation to the owner (Q) is made through money damages determined by the court, which the Q has no option but to agree to, while the replacement order acts to condemn P’s unauthorized action, warn the society over such behaviors and protect Q’s rights over his property. In the transfer of property from one person to another, the law requires the owner to voluntary consent to the exchange of the property with something of value. In this case, the transfer is the sale method where the property title is offered in exchange for another value, usually the money. The law also recognizes the transfer of property by patrimony and gifts to other persons. It all stands out that in any transfer, reasonable and careful measures should be taken to ensure no defects are available that could be traced from the original source of the property, which could affect subsequent transactions. The degree of attention attached to personal property may vary from the real property because land is considered valuable; however as the value of the property increases, the buyer requires extensive proof over the certainty of the seller’s ownership of property. In sales of real property, just as any contractual obligation, the basic requirements are mutual assent, capacity, consideration and property description (Bevans 69). Property description intends to uniquely indentify the parcel of the real estate/ property been involved in the transaction and states its boundaries as required by the law. The capacity requirement prevents entering into transactions with incompetent persons (under age, mentally ill, or intoxicated persons), who lack the ability to understand the effect of the legal undertaking in the transaction. For consideration, the law requirement establishes the bargained factors in the transaction, which each intends to achieve by the end of the exchange. The parties must agree to the pricing of the entitlement after negotiation (Bergkamp 210). Mutual assent requires the buyers and sellers have information concerning the property, and come to an agreement over the intended legal transaction. In the case of gifts as a transfer, it does not require bargaining for the exchange, meaning consideration is not a requirement of the law. Legally recognized gifts transfer, exist in two forms; gift inter vivos and gift causa martis, the former while living and the latter upon death, both requiring an intension to make an immediate transfer as reflected by the donor’s actions and statements, delivery of the possession to the donee, and his acceptance of the gift, and an additional requirement for causa martis transfer of gifts, where the donor anticipate his impending death (“LexixNexis” 10-11). Properties owned through intestate and testate proceedings are also recognized by law, allowing the heir or the trusted individuals as mentioned in the wills to possess the rights as their heritage. According to Ohio’s state laws and rules, chapter 2105, the next of kin is established by degrees of relationship as required by the civil law to determine interstate succession, and the distribution or inheritance of property to be passed down to the children, surviving spouse or both, parents of the intestate, brothers and sisters, step children, paternal grandparents, linear descendants as provided by the statute, before being termed as escheat to the state (ohio.gov). The intestacy laws will evaluate which surviving relatives of the decedent would inherit the assets. When the testator provided specific guidance in his distribution of property to his successors, the law protects the inheritance or ownership of the property by will. The succession of the property must be accepted by the successors within a defined period to receive titles or ownership of property. Since property are bundles of rights, they can be of huge benefit to the owners in investments and markets; with the help of lawyers, the rights provide a mechanism that can be used to initiate transfers, such as in securing loans where properties are used as collaterals and promote disclosure of information to improve contract negotiation (Bessen and Meurer 35-36). Other benefits come with leasing of property and its use as the owner for the specified amount of time, which he must maintain the property as long as the rights exists as he enjoys the produce. Such cases are recognized in rights of usufruct and rights of lease, as recognized by the civil law systems. When dealing with mislaid property, property rules require that the finder become the caretaker while owner retains ownership, the finder of the lost property can claim ownership unless the actual owner proves otherwise (Miller and Jentz 706). Some laws allow governments to acquire abandoned property for the community benefit, while in common situations the rule that apply is to grant a title of ownership to the finder, unless in a another’s property, who then becomes the new owner. 3. Liability Rules The application of the rules is a different method used by the legal systems to further protect entitlements. Generally, the rule works operate to ensure the persons who violate or damage the entitlement compensate for the action (Bergkamp 210). For economic reasons and legal enforcement, liability rule is common in case of accidents, and misuse or damage of another’s property, neglection, impossible restitution, and use of property at the expense of the owner, as ways of solving disputes. Referring to P and Q again, suppose P damages the track to render it non functional, either intentionally or as an accident, P is automatically ascribed the liability for the damage of Q’s property, while he was using the track. P is hence obliged to compensate Q for the damage. If the property can be repaired to restore its full functionality, P meets the established liability cost and if impossible to restore, Q has to be contented with its replacement through compensation for the damage, still met by P. Liability rules apply to persons (parents, employers e.t.c), states and even organizations for reasons mentioned above as the civil codes in different jurisdiction demands. The reasons for employing the rule is because it facilitates a combination of distributional results and efficiency (against property under or over valuation in the market), which prove difficult to attain under property rule (Calabresi and Melamed 1110). This follows after liability rule challenges in the value attached to the property being compensated, especially if it seeks to reflect the property’s market price, which in most cases is considered inefficient. The liability rules also apply to strict liabilities, those based on fault rule, other intermediate forms of the former two, and in special cases for unintended, non culpable injury. However, unlike the property rule, the entitlement holder or rightholder’s consent is not required for a transfer of the settlement property, which makes the acceptance of the compensation after an involuntary transfer. The protection provided by the rule would under certain situations make an individual to facilitate transfer of a possession for a set value, whose price is determined by a legal body as the third party, but not the parties involved in the disputes (Miller 49). Usually, the court determines the price of the compensation, but a legal official or arbitrator could also take the role of coming up with the compensation schedule for the damage. There are limitations set to certain liabilities that ought to be considered in court, while setting for compensation, in particular when it was earlier legally reached upon during the establishment. This corresponds to businesses and organizations establishment, which utilize and risk lots of capital or deals with a large number of employees, and infringement or other issues related to online materials. Under the U.S. copyright law, chapter 5, section 512 and part (a), the liability rule excludes the service provider liability for infringement of copyright, injunctive, certain cases of equitable relief and monetary relief for the reasons of service provider storage, transmission, routing and control of the system (“Copyright law” copyright.gov). In evaluating the property and liability rules, the court intervention enables the offended to receive his due compensation, even if the transaction cost is high than would have been possible under the property rule. At least, the rules set forth to give a reasonable value for the damaged or violated rights. Not only the market value, but the value of the forgone benefits too. For a liability to occur, the damage must have been caused, it should also be attributed to a legal entity to take responsibility, ought to demonstrate a causal relation between the action done and the damage, where the action is in breach of the legal rules (IICA 7). The link between the action and the injury could be as a consequence of the act or natural probability. Though some changes have occurred in the rules, some nations still hold the inexistent of contractual relations between the defendant and plaintiff as a requirement. 4. Inalienability The rule provides that the property is not alienable, denying the rights from been sold, given up or in any way disposed. This includes both voluntary transfer by the seller or the involuntary alienation provided by the liability rule. According to BergKamp, rights become inalienable when the transfers are prohibited, which in turn prevent its transfer in any transaction and alter the dynamics of the society (210). The rule goes beyond the capability of the liability rule where the damage seems excessive and costly for the intending transfer of a right; hence barring any transaction from occurring with an intention of preventing injuries, high excessive liability the buyer is unwilling to pay for, by avoiding an expensive and harmful effect in the alienation of property by the rightholder. The persons, who would have been hurt by the transfer of the right say from P to Q, can hence enjoy the inalienable protection against the harm. The rule also permits regulation in the sale of the entitlement, besides societal intervention to determine the ownership of the property or even the price to be paid for the damages that might have taken place. Inalienability rule protects certain constitutional rights depending on a nation’s law, the entitlement of most corporal components. Most nations have a common recognized inalienable right for human’s protection of their rights and defense of their liberty. In Ohio, the Article 1 (Bill of rights) and in section 1, all men have inalienable rights, which entail defending life and liberty, owning, acquiring and protecting property and seeking safety and happiness (“Ohio constitution” jpricelaw.com). In other common cases, the right to vote is a constitutional inalienable right for the country’s citizen (concur with U.S constitution). The ability to prohibit corporal components and services emanates from the contested comodification of the highly valued things, in an individual or society. This puts human organs, sale of babies, or persons into slavery among others, whose external costs justify inalienability to be candidates subject to the rule. It may also be applied partially in certain situations where it distinguishes the rights resulting from sale and gifts. With the current trend in law, donations of human organs (kidney) are recognized by law, while the sale for monetary gain remains restricted under the inalienability rules. The moral and paternal grounds commonly contribute, but not limited to the reasons for barring a contract. Essentially, moralism and the external cost could be difficult to value, with the consideration that they could be non-monetizable. According to Clarke, inalienability rule could be justified in certain situations “where the external costs do not lend themselves to collective measurement, which is acceptably objective and nonarbitrary” (243). It effectively associates the external harm of a moralism in such cases to inalienability despite the accrued value in the market. Paternalism provides economically efficient reasons for the application of the rule to secure distributional benefit at some efficient costs. It works to enforce inalienability in situations where the society demonstrates indifferences among the inalienable and alienable rights. Inalienability rule could however be fully applied without partiality in certain cases such as slavery, and are enforced in varying degrees, regardless of partial or full application as a requirement of the group based rules or the law. Works Cited  Bergkamp, Lucas. Liability and Environment. Norwell, MA: Kluwer law International, 2001. Print. Bessen, J. and Michael, J. M. Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk. New Jersey: Princeton university press, 2008. Print. Bevans, Neal R. Real Estate and Property Law for Paralegals. New York: Aspen publishers, 2009. Print.  Bouckaert, B., ed. Property Law and Economics. Cheltenham: Edward Elgar publishing, 2010. Print. Calabresi, G. and Douglas A. Melamed. “Property Rules, Liability Rules, and Inalienability: One View of the Cathedral.” Harvard Law Review 85. 6 (1972): 1089-1128. Web. 7 May, 2013 “Chapter 2105: Descent and Distribution.” ohio.gov. n.d. web. 7 May, 2013. Clarke, A. and Paul Kohler. Property law: commentary and materials. New York: Cambridge University press, 2005. Print. “Copyright Law of the United States of America and Related Laws Contained in Title 17 of the United States Code Circular 92.” copyright.gov. N.d. Web. 7 May, 2013.  IICA. Liability and Redress within the Context of the Biodiversity Convention and the Biosafety protocol. Costa Rica: IICA, 2007. Print. “LexisNexis Capsule Summary property law.” lexisnexis.com. 2003. Web. 6 May, 2013. Miller, Roger. L., and Gaylord A. Jentz, Business Law Today: The Essentials: Text & Summarized Cases: E-commerce, Legal, Ethical and International Environment. Mason, OH: Thompson higher Learning, 2008. Print. Miller, William I. Eye for an Eye. New York: Cambridge University Press, 2006. Print. “Ohio Constitution.” jpricelaw.com. n.d. Web. 7 May, 2013. “Property rules vs. liability rules.” american.edu. N.d. Web. 6 May, 2013.   Read More