Sources of Rights

AuthorRobert Chambers
This chapter is about the ways in which propert y rights can be created
or transferred. It is div ided into six main parts: gifts, tru sts, wills and
estates, land contracts, proprietary estoppel, and sale of goods. As you
read, it is helpful to keep several import ant distinctions in mi nd.
1) Intention or Operation of Law
The creation or transfer of property right s is usually done intentionally:
a person chooses to create or transfer a particular r ight and does what
is necessar y to give eect to their intention. Most of this happens sim-
ply and informally. We can acquire ownership of a bag of groceries at
a self-checkout without speaking a word. Some tra nsactions are more
complicated, such as buying a house or making a will.
Property rights can also aris e by operation of law even though no
one intended to create them. Some have been discussed in previous
chapters, such as a repairer’s lien (in Chapter 6), a trust that ari ses when
one joint tenant murders the other (in Chapter 5), or a prescriptive
easement (in Chapter 7). Although most of this chapter is about rights
created or transferred by i ntention, rights arising by operation of law
will also be encountered.
Sources of Right s 167
2) Creation or Transfer
The creation of a new right is dierent from the transfer of an existing
right. For example, I can create a new leasehold estate by granting a
lease to a tenant. They might then tr ansfer that estate to someone by
assigning t he lease, or they might create another new estate by sub-
letting the premises. If I f‌ind someone’s lost umbrella and pick it up,
I thereby acquire a new right to posse ssion, which is subject to the
owner’s better right to possession. I can transfer my right by giv ing the
umbrella to a friend, or I can cre ate a new right by loaning it to them
(as a bailment). The rules that apply to the creation of a right can be
dierent from those that apply to its tr ansfer.
3) Inter Vivos or Testamentary
A transaction is inter vivos if it occurs during life. It is testamentary if it
takes eect on death. Although the ter m testamentary normally refers
to something in a will (testamentum in Latin), that term is used more
broadly here to refer to any transaction that takes eect on death. This
distinction matters b ecause dierent rules apply depending on whether
a transaction is inter vivos or testamentary. Generally speaking, more
formalities must be obser ved to make a gift on death th an during life.
The death of a person can have proprietar y consequences that are
not testamentary. A life estate ends on the death of the life tenant, and
someone else becomes entitled to poss ession, but that is not a testament-
ary disposition. Similarly, when a joint tenant dies, the other tenants
will enjoy their rights of survivorship, but that is not a testamentar y
disposition. Those are just the in herent features of those property rights,
however they are created. A life estate or joint tenancy may be created
by will and so beg in as a testamentar y disposition, but the end of a life
or joint tenant’s interest is not testamentar y.
4) Gift or Contract
Most property rights are acqui red pursuant to contracts. We buy food,
clothes, furniture, homes, and so on. Of course, giving is a big part of
life, with gift s for birthdays, for weddings, or to say th ank you and dona-
tions to charity. Giving is al so a huge part of death, when everything we
own will be g iven away.
There are signif‌icant dierences between the status of a buyer and
the status of a donee. People who make contracts to buy things acquire
rights to receive them. In contrast, little can be done to help someone
hoping to receive a gift. Also, as discussed in the next chapter on com-
peting rights, the l aw oers greater protection to someone who acquires
something for value than to someone who receives it for free.
5) Law or Equity
The rules for creating property r ights depend on whether the right
is legal or equitable. Some property right s are necessarily equitable
because they do not exist at common law, such as the interest of a bene-
f‌iciary under a tr ust (discussed in Chapter 4) or a restrictive covenant
over land (discussed in Chapter 7). Other rights can be legal or equit-
able depending on the manner of their cre ation. For example, a long
leasehold estate is created at law by deed or registration (depending on
its location), but an equitable lease can be created by contract. This is
discussed below.
It can matter whether a property right is legal or equitable when
people make competing claims to t he same thing. As discussed in the
next chapter, legal rights usually receive greater protection than equit-
able rights.
The normal way to make a gift i s to transfer legal title to the intended
donee. It is also possible to give them the benef‌its of ownership by cre-
ating a trust for them, w ith someone else holding legal title. A gift or
trust may be inter vivos or testamentar y. Inter vivos gifts are discussed
here. Trusts and testamentary gifts are discussed separately below.
How one transfers legal title depends on the subject matter being
transferred. Goods and cash are normal ly transferred by deliver y,
whereas land is normally transferred by deed or regi stration. Goods
can also be transferred by deed, but that is less common. Intangible
things (such as copyright s, patents, debts, and company shares) cannot
be delivered and so are tran sferred by document or registration.
1) Delivery of Goods
Two things are needed to make a gift by delivery: the donor intends to
give, and the donee obtain s possession. One without the other is not
sucient. For example, you can buy a book as a gift for a friend, wr ite a
nice message inside, gi ft-wrap it, and even tell them about it, but the gift

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