Property Rules versus Liability Rules

Author(s):  
Stephanie M. Stern ◽  
Daphna Lewinsohn-Zamir

This chapter discusses one of the most fundamental issues that every legal system must address: the form of protection that should be given to legal entitlements, including property rights. The chapter summarizes the debate regarding the choice between property rules and liability rules, and its underlying assumptions. It then shows how behavioral studies offer important considerations that should influence the legal discussion. Generally speaking, psychological studies invite more optimism about people's ability to reach mutual agreement under property rules and suggest that miscalculations of damages under liability rules may be a graver danger than presently realized. These studies caution us against increasing the use of liability rules and lend additional support to the use of property rules when transaction costs are low.

2006 ◽  
Vol 24 (2) ◽  
pp. 99-126
Author(s):  
Antonio Nicita ◽  
Matteo Rizzolli

Abstract In this paper we argue that traditional explanations of the dichotomisation of property rules and liability rules are somehow misleading, since they tend to neglect the evolutionary complementarity between die two rules in a world of incomplete property rights characterised by sizeable ex-ante transaction costs in rights’ definition. When rights are a complete bundle of well-defined uses, the application of a property rule reaffirms and reinforces the correlation between rights and duties. In a world of incomplete rights, externalities over undefined uses call for a court intervention aimed at defining a new property right through either a property rule or a liability rule. Independently of whether new rights are created by property or liability rules, die nature and die extent of future externalities over conflicting undefined uses could generate new processes of rights’ definition. The emergence of an externality always implies an evolutionary complementarity between property rules and liability rules whose boundaries actually depend, in alternative legal systems, on die degree of incompleteness of original rights.


2013 ◽  
Vol 7 (3) ◽  
pp. 351-370 ◽  
Author(s):  
Hassan Gholipour Fereidouni ◽  
Usama Al-mulali ◽  
Miswan Abdul Hakim Bin Mohammed

Legal Studies ◽  
1995 ◽  
Vol 15 (3) ◽  
pp. 335-355
Author(s):  
FR Barker ◽  
NDM Parry

There is nothing new about legal rules which provide that a person who is in control of land owes a duty of care to entrants thereto. These occupiers’ liability rules are often seen as something primarily to do with tort, but their content and substance are also likely to reveal a good deal about the ‘property policy’ of the legal system in question, in the sense that they will indicate the respective weight and importance attachkd to various kinds of competing claim over land. A legal system containing rules that restrict the circumstances in which those with individual, controlling claims over land owe a duty of care to other persons entering that land would appear to indicate a policy preference for supporting and protecting ‘private property’ claims to land above others. On the other hand, a system which imposes on those controlling land a greater degree of legal responsibility for persons entering thereon may be one based on a policy of recognising, protecting and supporting a range of claims in land beyond those of a narrow, private nature.


2017 ◽  
Vol 13 (4) ◽  
pp. 815-827 ◽  
Author(s):  
BENITO ARRUÑADA

AbstractInspired by comments made by Allen (2017), Lueck (2017), Ménard (2017) and Smith (2017), this response clarifies and deepens the analysis in Arruñada (2017a). Its main argument is that to deal with the complexity of property we must abstract secondary elements, such as the physical dimensions of some types of assets, and focus on the interaction between transactions. This sequential-exchange framework captures the main problem of property in the current environment of impersonal markets. It also provides criteria to compare private and public ordering, as well as to organize public solutions that enable new forms of private ordering. The analysis applies the lessons in Coase (1960) to property by not only comparing realities but also maintaining his separate definition of property rights and transaction costs. However, it replaces his contractual, single-exchange, framework for one in which contracts interact, causing exchange externalities.


2018 ◽  
Vol 42 (1) ◽  
pp. 129-144
Author(s):  
Leonel Severo Rocha ◽  
Fernando Tonet Silva

Resumo: Toda decisão judicial sobre casos difíceis, passa por uma elevada construção interpretativa. Sob um olhar sistêmico, a operatividade do sistema jurídico só pode ser observada se mantida sua integridade, ou seja, por seus próprios códigos. Quando Ulisses busca uma solução para salvar sua vida e de seus grumetes, mantém a estrutura, porém, faz uma decisão através de uma dupla observação: decidir salvar a vida de todos, porém, buscando fundamentos distintos, enquanto uns perdem, momentaneamente, o sentido da audição; Ulisses decide escutar as sereias. A decisão corresponde aos complexos casos, onde mesmo sem o canto das sereias (norma), o caso deve ser resolvido. Nesse sentido, é analisado o acórdão da 7ª Câmara Cível do TJRS, na Apelação nº 70005798004/2003, onde foi discutida a partilha de bens e direitos sucessórios de um genro infiel. O paradoxo apresentado representa o grande santuário da teoria sistêmica e a necessidade de decisão dos Tribunais.   Abstract: Every court decision on hard cases goes through a high interpretive construction. From a systemic perspective, the operability of the legal system can only be observed if maintained their integrity, i.e. their own codes. When Ulysses seeks a solution to save your life and his cabin-cleaning boys, he maintains the structure, however, decides by a double observation: deciding to save everyone’s lives, however, looking for different reasoning basis, while some lose, briefly, their hearing; Ulysses decides to listen to the mermaids. The decision corresponds to the complex cases where even without the mermaid’s singing (norm), the case should be solved. Therefore, the 7th Civil Chamber’s decision in Appeal No. 70005798004/2003, where there has been discussed the sharing of inheritance and property rights of an unfaithful son-in-law, is analyzed. The presented paradox represents the great sanctuary of systems theory and the need for decisions from courts.


Jurnal Akta ◽  
2018 ◽  
Vol 5 (2) ◽  
pp. 441
Author(s):  
Indah Esti Cahyani ◽  
Aryani Witasari

Nominee agreement is an agreement made between someone who by law can not be the subject of rights to certain lands (property rights), in this case that foreigners (WNA) and Indonesian Citizen (citizen), with the intention that the foreigners can master land de facto property rights, but legal-formal (de jure) land property rights are assigned to his Indonesian citizen. The purpose of this paper isto assess the position of the nominee agreement in Indonesia's legal system and the legal consequences arising in terms of the draft Civil Code and the Law on Agrarian. Agreement is an agreement unnamed nominee made based on the principle of freedom of contract and good faith of the parties. However, it should be noted that the law prohibits foreigners make agreements / related statement stock wealth / property (land) for and on behalf of others, sehingga the legal consequences of the agreement is the nominee of the agreement is not legally enforceable because the agreement was made on a false causa.Keywords: Nominee Agreement; Property Rights; Foreigners.


2021 ◽  
Vol 12 (4) ◽  
Author(s):  
Dmitry Litvin ◽  
Galina Davydova ◽  
Anastasia Biryukova

The problems of the forest sector identified by many researchers are primarily related to the quality of institutions and the lack of effective institutional relations in the industry, according to the authors’ opinion. The results presented in the article, which prove the existence of a causal relationship between the qualitative characteristics of institutions and institutional relations and economic results, are shown for the first time in the case of the forest industry. In order to achieve the objective, the economic interrelations between forest industry entities are analyzed in the context of their institutional environment. It is revealed that the existing institutional structure of the industry supports the conflict of incentives between the owner (state) and the user (tenant) of forest land. The theoretical aspects of the specification of property rights, minimization of transaction costs and costs of contractual relations in the Russian forest industry to increase its economic efficiency are investigated. The transformation of Russian forest industry institutions should be based on the comparative advantages of existing institutions, economic models of successful forest management, objective institutional and economic indicators of sustainable growth, such as the specification of property rights and the minimization of specific transaction costs.


2016 ◽  
Vol 3 (1) ◽  
Author(s):  
Qian Lu

AbstractUrbanization is a process in which separated and dispersed property rights become concentrated in a specific location. This process involves a large volume of contracts to redefine and rearrange various property rights, producing various and high transaction costs. Efficient urbanization implies the reduction of these costs. This paper studies how efficient urbanization reduces transaction costs in the real world, based on a series of contracts rather than the coercive power. Specifically, this paper shows that Jiaolong Co. built a city by being a central contractor, which acquired planning rights by contract, and signed a series of tax sharing contracts with government, farmers, tenants, and business enterprises. These contractual arrangements greatly reduced the transaction costs and promoted the development.


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