Limited Inalienability Rules

49 Pages Posted: 8 Mar 2018

See all articles by Ariel Porat

Ariel Porat

Tel Aviv University; University of Chicago - Law School

Stephen D. Sugarman

University of California, Berkeley - School of Law

Date Written: March 5, 2018

Abstract

Most people's entitlements are protected by a property rule, which means that their holders can sell them for a price. But some important entitlements are protected by an inalienability rule, and hence cannot be sold under any circumstances. For example, people cannot sell their organs. In most jurisdictions, women cannot be surrogate mothers for a fee (but only for reimbursement of costs). People cannot sell their right not to be exposed to highly life-threatening conditions. Indeed, most constitutional rights are not transferable. People cannot reassign their legal entitlements to social benefits provided by the government. Tort victims in many jurisdictions cannot sell their rights to sue. Finally, individuals, as well as governments, cannot sell some types of cultural property to foreigners or to foreign governments.

In this article, we propose and develop an intermediate rule for protecting entitlements — a middle ground between property and inalienability rules — that we entitle, the "Limited Inalienability Rule" (LIR). Under this rule, the holder of the entitlement is free to transfer her entitlement but still possesses an inalienable right to revoke the transfer (or the agreement to transfer) at a later stage, with no penalty. We show that this rule currently exists with respect to a few entitlements, and we suggest that it be employed in additional areas of law. We demonstrate that on many occasions, a LIR serves as a sensible compromise between property and inalienability rules, and can be justified on efficiency and justice grounds.

Suggested Citation

Porat, Ariel and Sugarman, Stephen D., Limited Inalienability Rules (March 5, 2018). 107 Georgetown Law Journal (2018 Forthcoming); U of Chicago, Public Law Working Paper No. 657; University of Chicago Coase-Sandor Institute for Law & Economics Research Paper No. 841; UC Berkeley Public Law Research Paper. Available at SSRN: https://ssrn.com/abstract=3134837

Ariel Porat (Contact Author)

Tel Aviv University ( email )

Ramat Aviv
Tel Aviv 69978, IL
Israel
972-3-6408283 (Phone)
972-3-6407260 (Fax)

HOME PAGE: http://english.tau.ac.il/profile/porata

University of Chicago - Law School ( email )

1111 E. 60th St.
Chicago, IL 60637
United States

HOME PAGE: http://www.law.uchicago.edu/faculty/porat

Stephen D. Sugarman

University of California, Berkeley - School of Law ( email )

215 Boalt Hall
Berkeley, CA 94720-7200
United States
510-642-0130 (Phone)
510-643-2672 (Fax)

HOME PAGE: http://www.law.berkeley.edu/faculty/sugarmans

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