Evolution of Rules in a Common Law System: Differential Litigation of the Fee Tail and Other Perpetuities

Abstract:     
This paper presents a variation on the Rubin-Priest theory of the evolution of common law rules toward efficiency. It offers the fee tail and similar restraints on alienation as examples of how inefficient rules can lead to inefficient uses of land, which cause owners to seek the help of courts in freeing their lands from the inefficient constraints. In other words, there is a feedback loop that provides courts with opportunities to overturn inefficient common law rules. We should expect this common law drift toward efficiency to be stronger for property rules than for tort rules. Because efficient property rules are important to a healthy economy, the common law process may have an internal advantage in its external competition with other legal systems.

Number of Pages in PDF File: 36

Keywords: evolution, fee tail, perpetuities, common law, property

JEL Classification: K11, K41, K10

Accepted Paper Series