Exploring the Interfaces between Contract Law and Property Law: A UK Comparative Approach

Abstract

Contract and property law provide two examples of distinct legal approaches: pragmatism and coherency. The different natures and roles of contract law and property law also reflect the distinct qualities of the rights characteristic of both these branches of the law, namely rights in personam and rights in rem. The deviations between the approaches of contract law and property law can be seen most clearly in those transactions which rest upon the interface of property law and contract law. Two transactions lying at this interface are (1) the sale and purchase of property; and (2) the creation and constitution of rights in security over property. In this paper, the nature of these two transactions will be analysed through the looking-glass of two legal systems which are cited as providing examples of (i) the two extreme approaches of pragmatism and coherency and (ii) the comparative differences between them. These are the English law and Scots law systems. The question is whether the positions adopted by Scots law and English law in respect of the two selected transactions are so different? In practical terms, the nature of the rights that sellers and purchasers and security granters and security holders have at different stages of the formation and completion of the transactions of sale and security is extremely important, since whether the right is a right in personam or a right in rem will determine the private international law rules, taxation rules and insolvency rules which are applicable, as well as the nature of the legal remedies which are available to such parties. The comparative analysis of this article is conducted through the prism of five mandatory principles which are considered to be axiomatic in property law regimes grounded in the Civilian Law tradition. These principles are: separation, abstraction, numerus clausus, specificity and publicity. Once a comparative assessment of the applicability of these five principles to the Scots law and English law systems is made, the extent to which these principles are conceptually coherent and/or pragmatic will be considered and certain conclusions drawn.