Numerus Clausus

Paper Summary:

This paper discusses how the law regulates the number, content, creation, transfer and extinction of absolute rights and how this favouring of certain property arrangements is known as the numerus clausus concept which is an important expression of the fundamental principle of unity that underlies modern property law. It looks at how the numerus clausus concept still plays an important role in both civil law and common law systems today and how the key legislative justification for its survival lies with the fact that limiting legal categories creates more legal security and reduces information costs.

Outline:
Introduction
The Numerus Clausus Concept
Property Rights - in Rem Nature
Property Rights - Communicative Function
Property Rights - Massive Generative Power
Property Rights - Optimal Standardisation
Property Rights - Impersonal Nature
Property Rights - Verification Function
Property Rights - Bipolar Character
Property Rights - Fragmentation
Conclusion

From the Paper:

"Ultimately, Merrill & Smith propose that the numerus clausus concept leads to an 'optimal standardization' of property rights at the point where the marginal frustration and measurement costs (MC) is equivalent to the marginal benefits (MB) i.e. MC = MB. This means that there will be an optimal number of forms that will keep costs and benefits in the balance. On the contrary, if the continual availability and creation of a variety of new forms was allowed, this will be counter cost effective, where MC will increase and MB will decrease with each new form because a few property forms suffice as building blocks for the complex transactions a modern economy requires."

Sample of Sources Used:

• Parisi, Francesco "The Fall and Rise of Functional Property" (November 17, 2005). George Mason Law & Economics Research Paper No. 05-38:
• Sjef van Erp, "A Numerus Quasi-Clausus of Property Rights as a Constitutive Element of a Future European Property Law?" vol 7.2 Electronic Journal of Comparative Law, (June 2003).
• Thomas W. Merrill & Henry E. Smith, "Optimal Standardization in the Law of Property: The Numerus Clausus Principle", 110 Yale L.J. 1 (October 2000), pp.1-70.
• Hansmann, Henry and Kraakman, Reinier H., "Property, Contract, and Verification: The Numerus Clausus Problem and the Divisibility of Rights" (August 2002). Harvard Law School, Public Law Research Paper No. 37; Harvard Law and Economics Discussion Paper No. 388
• Heller, Michael (2001) "The Economy of Property Forms", The Gruter Institute Working Papers on Law, Economics, and Evolutionary Biology: Vol. 1: Article 6.

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