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A Transactional View of Property Right

47 Pages Posted: 26 Apr 2005  

Robert P. Merges

University of California, Berkeley - School of Law

Date Written: March 10, 2005

Abstract

Property rights and contract law are two of our most basic legal categories. Many legal scholars describe what makes them different; this Essay describes how they work together to promote economic exchange. Incorporating the insights of both "transaction cost" and "new property rights" economics, it identifies two crucial contributions that property rights make to real-world contracting: (1) precontractual liability, or protection for disclosure of sensitive information in the period leading up to contract formation; and (2) enforcement flexibility after a contract is executed, in the form of many subtle but important advantages that accrue to a contracting party who also holds a property right. This Essay argues that property's "transactional" role is growing in importance, as the "new economy" ushers in a more transaction-intensive industrial structure featuring greater numbers of smaller, more specialized firms.

Keywords: Property rights, precontractual liability, enforcement flexibility

Suggested Citation

Merges, Robert P., A Transactional View of Property Right (March 10, 2005). Available at SSRN: https://ssrn.com/abstract=707202 or http://dx.doi.org/10.2139/ssrn.707202

Robert P. Merges (Contact Author)

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

215 Boalt Hall
Berkeley, CA 94720-7200
United States
510-643-6199 (Phone)
510-643-6171 (Fax)

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