Between Property Law and Contract Law: The Case of Securities

Abstract

Grotius and Von Savigny made a strict distinction between property law interests and contract law interests. This distinction still influences current European law systems, both continental and Anglo-Saxon. The Draft Common Frame of Reference (“DCFR”) also seems to build on the same distinction. Yet a harmonisation of the private law rules concerning securities transfers would necessarily have to include both contract law and property law. First, in the case of book-entry securities, the object of the transaction is hard to classify as either purely contractual, or proprietary in nature. This holds equally true for similar, “modern” assets such as carbon credits, i.e. emission rights, and intellectual property rights. Second, specific rules of securities law notwithstanding, contractual and property law aspects of a transfer are virtually inseparable under the general private laws of most jurisdictions, including the DCFR. Thus, more generally, and as stated above, property law harmonisation must accompany contract law harmonisation – and vice-versa.

Keywords: Securities, financial law, property law, contract law, Draft Common Frame of Reference, DCFR, harmonisation