test5all - Contracts involve exchange of what people own....

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Contracts involve exchange of what people own. Tort law permits compensation when one person harms what belongs to another. Public law regulation of business helps define and protect the equal right of all to what they own. Securities law protects what investors own from misappropriation by corporate agents like managers. 200 Property = indicates legal ownership, that something is recognized by law as being yours. It indicates exclusiveness. Property isn’t an object or resource; it is the legal right to exclude others from interfering with it. Originally possessed resource – capacity for work and health are protected Property is for the benefit of everyone It is a legal fence that protects resources from the acquisitiveness of others Property is the necessary foundation for private enterprise and the market in the modern nation 202 Limited Resources: 1. The state itself makes the major decisions about the production and distribution of resources (communism). The state requires that its citizens produce according to their abilities and share by needs. 2. Private property – state recognizes and enforces an individual’s rights to acquire, possess, use and transfer scarce resources, state doesn’t plan what people should have, people determine distribution through voluntary exchange, role of state is to recognize legally when people have exclusive property rights 3 Faces of Property – 202 Private – protects private persons and allows them to exclude other, including the state Public – state’s right under various circumstances to exclude people from state monuments, building, equipment, land, and other public resources Common – refers to the right to air, rivers, or oceans and is appropriate only to the extent we can only exclude others from interfering with our usage of them. Also refers to private ownership by two or more people. 203 Difference in frameworks is matter of degree. Property system makes people more free. Property is central to society’s achievement of prosperity. Property promotes incentive by allowing people to keep and benefit from what they produce. 204 Capital formation – that quality of resources that produces new or different resources, property enables people to borrow money at reasonable cost. Lenders are willing to loan money because property law guarantees that a borrower’s house is on an identifiable piece of land, that the state recognizes a borrower’s claim to the house and that the state permits lenders to enforce the mortgage agreement Large scale businesses are capitalized by investors who buy ownership shares. Feasible because law recognizes stockholders’ property interests in the corporation. Securities markets enable business to change a property interest in future profit potential into money 205 Divisibility – relates to capital formation and refers to how property permits resources to be broken into parts and used in many ways, resources can be subdivided
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This note was uploaded on 11/30/2011 for the course LAW 322 taught by Professor Ward-vaughn during the Fall '07 term at Clemson.

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test5all - Contracts involve exchange of what people own....

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