Private law

Definition

Deals with rights/duties of:

• individuals towards one another (private parties), or

• companies towards one another (legal persons) or natural persons, or

• state acting in private status towards private party

• “Private law” is also referred to as “civil law”

Purpouses

• provide remedies for individuals harmed by others

• manage social conflict & restore harmony

Differences with public law

• complaint by private party, plaintiff (and not prosecutor)

• injured party is private party, not state

• harm done vs. criminal code violated

• question is whether defendant is liable (does not refer to “guilt”)

• preponderance of evidence standard: more likely than not that the defendant is liable (i.e. > 50%)

• remedy is compensation: monetary damages, injunctions, specific performance.

• i.e. no probation, no jail, no death penalty.

Fields of private law

• Property law: ownership/acquisition of property through conveyances and inheritances

• Contract law: enforceability of private agreements between individuals and organizations

• Torts: cases involving personal injury to person/property

• Family law: involving marriage, child custody, other issues arising in personal relationships

• Intellectual property law: protecting rights of creators of a variety of intellectual works

• Company law: establishing, managing, functioning and dissolving business entities

• Juvenile law: laws regulating behavior of minors

Property law

Property law determines rights and obligations … between persons … in relation to a “thing”

“Thing”

The object of a property right:

• aka “object”; “property”

• capable of being owned

• tangible or intangible

• moveable or immoveable

“Thing” of property

1. tangible property (physical things): moveable = (“personal”), immoveable = (“real property”)

2. intangible property (non-physical things): intellectual property (patents, trademarks, copyright), legal rights (assignment of credit debt)

Four rights of ownership

• possession

• use

• alienation

• exclusion

Right of Possession

• power of dominion (physical control) over the thing

• possession alone is not ownership

• possessor may have “better right” to the thing compared to other non-owners, but not compared to the true owner

Right of Use

• power to determine whether and how to enjoy the benefits of the thing

• i.e. living in a dwelling, operating a business in an office, farming a field

• right to use includes the right to “quiet enjoyment” of a home

Right of Alienation

• power to decide whether and how to dispose of the thing

• i.e. sell, donate, abandon, destroy

Right of Exclusion

• power to prevent other persons from interfering with ownership rights

• the essential right to enforce the other three rights of ownership

• “Person with full ownership has a set of rights that are enforceable against the whole world.”

• “Trespass” is a tort for a violation of the right of exclusion.

Limits on property rights

• government regulations

• prohibition on the use of property that interferes with another person’s property rights (private nuisance) or with a legal right of the public in general (public nuisance)

• owner/possessor cannot prohibit the use of or entry onto property when necessary to protect life or safety (principle of necessity)

Important limit on right of alienation (disposal)

• A person can transfer (sell, give away, etc.) only the rights that they have in a thing

• The transferee (the person receiving the thing) will receive only the rights that the transferor actually had and actually granted to the transferee

• exception: a “good faith purchaser”

Contract law principle

A contract is the voluntary commitment between two or more persons to be legally bound to a set of promises

= a legally enforceable agreement to exchange performances

Assent

Voluntary commitment

• refers to intent of the parties to enter into a legally binding agreement

• requires contracting parties to have legal capacity

Contract formation

• “concluding” a contract

• classic model of contract formation requires:

• an offer plus acceptance of the offer

• but in contract negotiations between merchants, often offer and acceptance cannot be identified, only an agreement on terms of the contract

• other formal requirements to conclude a valid contract? contract in writing? signature required? not required except for certain kinds of contracts

• “consideration” (common law) / “cause” (French legal tradition)

Contractual obligations

• if a term of the contract is ambiguous . . .

• interpretation: what are the terms of the contract?

• subjective or objective standard of intent

• extrinsic evidence allowed (subjective) vs. “four-corners” rule (objective)

• breach of contract

• non-performance of a promised obligation or defective performance

• requires breach of an essential term (essence of the contract) vs. secondary term

• implied term of “good faith” in performance of every contract

Effect of breach of contract

• non-breaching party can claim a remedy

• court-ordered performance of the contractual obligation (“specific performance”)

• monetary compensation (“money damages”)

• measures for calculation of damages

• expectation = value of expected performance of the contract

• reliance

• restitution

• non-breaching party may avoid further performance of the contract.

• non-breaching party required to “mitigate” losses; must try to limit losses, if possible.