‘Legal Theory Lexicon: Property Rules and Liability Rules’

“One of the most famous distinctions in contemporary legal theory was made popular by Guido Calabresi and A Douglas Melamed’s famous article, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral. The core idea is simple. Legal rules that create private causes of actions (or claims for relief) can be sorted into two kinds. Kind one consists of rules that entitle the claimant to an injunction. Kind two consists of rules that entitle the claimant to damages. The first kind of rule is associated with property rights – hence, we can call the first kind ‘property rules’. The second kind of rule is associated with tort liability or contractual liability – hence, we can call the second kind ‘liability rules’. The distinction between property rules and liability rules is important, because injunctions and damages have different effects on future behavior and on negotiated settlements to claims …” (more)

[Lawrence Solum, Legal Theory Blog, 22 March]

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