Contractual rights and property interests – I

Abstract

Introduction In this and the following chapters, we consider intangible property. This may be created by contract – for example, a debt, bond, certificate of deposit, or bank account – or it may be non-contractual in origin – for example, an intellectual property right. In this area, contractual rights and property interests are hard to distinguish; so we deal with both. Indeed, many of the cases we will consider are primarily concerned with drawing this distinction. This chapter and Chapter 30 will be limited to the law of England and the Commonwealth; Chapter 31 deals with US law. While it is generally accepted that contractual rights are governed by the law applicable to the contract (determined in accordance with the rules discussed in Chapters 24–27), there is a tendency to apply the lex situs rule to property interests. Hence the importance of distinguishing the two. If the issue is held to concern a property interest, a second question arises: what is the situs of the property in question? Situs The principle applied is that of effectiveness: it is said that the applicable law must be the law of the country that can most effectively deal with the matter. For this reason, the general rule in the case of a debt is that the applicable law – the lex situs – is the law of the country in which the debtor resides. What if he resides in two countries, as may often be the case where the debtor is a multinational corporation?