PRIVATE LAW 2 EXAM NOTES
WEEK 1: PRINCIPLES AND GENERAL CONCEPTS OF PROPERTY LAW
What is property law?
o Focuses on – legal relationships between a person and a thing, a property/proprietary right is former
o Vs LoO: relationship between 2 people
o But property law still in a way exists to deal with legal relationships between persons, starting point is just different
o Contract law starting point = two persons
o Property law starting point = a person and a thing and legal consequences follow from that relationship
■ e.g ownership rights: owner owns an object, and consequently other people have to respect that property
right.
o Most major distinction between law of obligations and property law:
o Obligations: 1 person or more vs determined person (s)
o Property: 1 person + object vs indefinite # of people
Law of obligations
Against
Relative rights (aka personal rights, rights in personam): against defined other person
o E.g Contract of sale: Obligation deliver computer and other person has obligation to pay it
Enforcement
o Inter partes: Only binding on the parties
○ Obligation only enforceable person you conclude contract with
Formalities
o Few formalities - almost limitless way in which you can offer, agree and transfer.
o Concerns a distinct group of people not the general public & especially not the whole world!
Legislators control
o Freedom of contract - according to wishes of both parties: no mandatory rules
o Which types of contract can be created? Any!
o What content should be in the contract? Anything!
1.) If you want to conclude a contract or not
2.) With who you want to conclude the contract
3.) What terms you want to conclude a contract
■ Limit: criminal activities, concluded contrary to good morals (duress)
Property law
Against
o Absolute rights (aka real rights, rights in rem)- against everyone
Enforcement
o Erga omnes: Enforceable against the whole world
Formalities
, More formalities: since it’s relevant for whole world you have to make it clear
o Need for legal certainty for third parties.
I.e. even transfer of ownership is relevant for third parties
Legislators control
Mandatory rules (Linked to numerous clausus principle) & for the sake of legal certainty
o Which property right can be created/transferred? legislator decides
o What can be the content of these rights? legislator decides
e.g Impossible to create property right with content of “ill sell you my car and paint it purple and fill your gas every 7 days”, but
possible to make contract. If this clause is put in a transfer of ownership its binding between the parties but it does not follow the
car itself because it is not a [property right (droit de suite). If car is sold to third party they get ownership but not obliged to fill
gas.
Example: Case which clearly demonstrates the difference in the absolute nature of property law vs the relative nature of
LoO
Noorlander v. Ligtvoet (HR 10 April 2009, NJ 2009/184) ○ 2 neighbours had joined pieces of land.
o Had contract on neighbouring land of Noorlander which had a horse stable.
○ Ligtvoet owned a horse and made an agreement that he was allowed to put horse manure on Noordlaner’s land (not in
stable).
○ Noorlander decided he didn’t want Ligtvoet to do that anymore.
○ Court said Ligtvoet was right, there was a contract which was binding and Noorlander had to continue it.
○ But soon after Noorlander transferred the property to his daughter, who didn’t have a contract with him about the
horse manure. Ligtvoet won at CoA because there was no contract with the daughter but she knew very well there
was a contract with the father and knew about the court order so it’s a wrongful act against Mr. Ligtvoet.
○ But SC overruled and said mere fact of knowledge of the contract/order did not mean she could not exercise her
ownership rights.
○ Outcome would be different if they had created a proprietary right (instead of a contract). Create an easement/servitude
(limited real right) which can allow someone to use land of another person and this right would have been absolute
and thus enforceable against the daughter. The contact was relative and therefore only enforceable against the father.
Where do we find property law?
o Hardly any international or EU property law
o less harmonised than LoO & therefore most is found in national legislation and case law
Dutch BW; French Code Civil; German BG; English Common Law + statutes
o DCFR
Draft Common Frame of Reference
o Academic effort; not actual legal system in force in any state
o Combines principles, definitions and model rules within Europe
o ‘Soft law’; quasi legal instrument which does not have binding legal force
o Book VIII is most important for property law
Property law in Draft Common Frame of Reference
o Book VIII Acquisition and loss of ownership of goods (moveable’s)
o Book IX Proprietary security rights in movable assets
, o Book X Trusts
Principles of property law
o Property law deals with absolute rights (rights in rem)
o There are 6 main principles in property law
Principle of droit de suite
o If you have a proprietary right it will follow the object of that right no matter who has possession
e.g B steals bike from A; B gives it to C, who lends it to D -
○ A still has ownership rights because it’s an absolute right! Can claim it back from them and they’re legally
obliged to give it back.
Nemo plus principle
o "One cannot transfer more rights than he has"
o If you don’t have a certain property right cannot transfer it.
Principle of priority
o Rights created in favour of two persons at different times
o The one who has the advantage in time should also have the advantage in lawolder rights are stronger
o A B usufruct (right to the use/advantage of another’s property); A has no use of bike because it’s under usufruct to B for
10 years. But A could choose to sell transfer of ownership to C.
○ Principle of priority comes into play: right of usufruct was created 1 Jan for B; ownership right for C is later; so
right of B is stronger than that of C. C has to respect right of B. So C will also wait 10 years.
Principle of specificity
o Property rights only exist with respect to specific things
o Has to be very clear in what thing a property right exists: connection between the property right and the specific object
I.e. if you go to bike shop and say “I want to buy this bike, this type, this brand, this colour, for 300€. You see
behind him he has several models of this bike. He agrees to sell it to you for 300. Still, this person does not
own the bicycle because there are identical ones and it has to be specified which bike this person will own.
Once the seller says “this bicycle?” and you say “yes” and it’s transferred to you & paid, then it’s specific
enough.
Principle of publicity
The creation/ transfer of property rights usually requires a form of publicity
Immoveable
o Publicity might be very far reaching
e.g transfer of real-estate, transfer made by drafting notarial deed at notary, then put in public register.
Moveable’s
o Less clear with moveable’s: no public register for books… so how does this principle apply?
o It would be the witnessing of people in the bookshop of the purchasethis is the case when dealing with moveable’s in
general
,Numerus clausus
o Closed list given # of property rights
Two aspects-
Typenzwang: Which property rights can be created?
Eg ownership, userfruct, pledge
o Can only have property rights recognized by legislator
Typenfixierung: What content can a property right have?
o Once you create a specific property right, it has to have contents that legislator has given to this property right in
legislation
o The content of the real rights may only be determined between the parties within the limitations of the real rights
(usufrucht/security rights etc)
E.g A mortgage right appears on a list of property right given by the legislator; a mortgage has specific
elements. You have to use the content in the legislation when creating the right.
Examples of property rights (real rights)
1.) Ownership rights
o Most extensive property right you can haveunlimited power over object
Can even destroy the object
Defined in the code civilethe right to enjoy and dispose of
Draft common frame of reference:
VIII. – 1:202: Ownership › “Ownership” is the most comprehensive right a person, the “owner”, can have over property, including
the exclusive right, so far as consistent with applicable laws or rights granted by the owner, to use, enjoy, modify, destroy, dispose
of and recover the property.
Common law ownershipmore relative ownershipdo not need to prove ownership if you find something, the fact
that you have the object in your possession allows you a form of property right as long as the true owner does not
exercise his/her right
Civil law ownershipabsolute ownershipneed to prove ownership
2.) Limited real rights
o VIII 1:204 Property right position which is more limiteda right that you have over an object that is owned by
somebody else
a.) Security right
o Can’t actually use the thing eg pledge, mortgage
b.) Rights of use
o Usufruct or servitude (to deposit the manure)
Objects of property rights
Things
Moveable’s
Book VIII applies to this category: Personal property ‘goods’ as in Art VIII 1:201
Immovables
Right over real estate/landWeek 5/6
Other assets
, Property rights of intangible things
Claims over bets & intellectual property rights
Otherwise known as
property rights
Rights of use=usufrucht/easement
Security rights=pledge/mortgage
, WEEK 2: PRODUCTION, COMMINGLING, COMBINATION
Key focus: The actual unit (eg the thing weather moveable/immoveable). look at the different elements which determine what
actually makes the thing a thing. We address certain principles such as the unity principle which relies on common opinion etc.
Linked to original acquisition: All based on a new property right coming into existence by either combination, commingling
or production
From a proprietary perspective: Property rights in the individual parts (materials) cease to exist anymore as new property
right comes into existence
THE UNITY PRINCIPLE
Key to consider: Common opinion; the accepted opinion of the public
o Definition: That which to common opinion is regarded as a unit is treated as such in law
Example: a bicycle is made from a wheel, frame, handles etc, however, the moment you make a ‘bicycle’ from these
things it is the bicycle that is considered the relevant unit, the bicycle is what exists in law, the other parts are now
merely component of the one unit.
The extent to which the unitary principle is implemented in the law differs from system to system, the Netherlands is extreme
in its application of the unity principle
Example from Netherlands: Your bike is missing its seat and so you go in to Hema and steal a seat. Using the principle
of droit de suite, the property right of Hema would follow it. However, as soon as you put the seat on your bike then it
becomes a unit and therefore you now own the property rights of the seat cease to exist
Still a criminal act to steal it even though you would now be the rightful owner, the rules of criminal law
would now apply
Why do we have the unity principle?
Economic interest: Value of things decreases if continuously taken apart
Protection of third parties:
o Whatever looks like ‘one item’ the law should treat as one
o We give legal value to what we perceive to be one
E.g A adds wheels/saddle to a bike frame, sells it to B but says ‘you’re buying the frame, but the saddle belongs
to C and the wheels belong to D’. It is not normal to have one bike with 20 owners of all the components. And if
A didn’t say anything, B wouldn’t have noticed, therefore we protect everyone though the unity principle.
Consequences for this principle
There are mandatory rules when dealing with the units, which is the case always when dealing with property law as
supposed to the law of obligations.
E.g To protect third parties: this is so you don’t have to enter into extensive investigations when you buy a bike, as long as
the person who sells you the bike owns the bicycle, then they own the whole thing and there are no rights in the separate
parts.
In general, there is less room for party autonomy in property rights as compared to the law of obligations, but this is not the
case regarding the unity principle in the DCFR which has much more room for party autonomy (party agreements)
DCFR & PARTY AUTONOMY
VIII-5:101 Party Autonomy in Relation to Other Provisions
(1) The proprietary consequences of production, combination or commingling can be regulated by party agreement.
This can determine the property rights that will exist afterwards
, In exam you first need to check if a ‘party agreement’ was made to regulate the point in time when ownership passes or
consequences of production, commingling/combination provisions come into existence.
o You can’t actually do this in Dutch law
COMBINATION (accessio)
A moveable thing becomes a component of another thing which is to be considered the principle thing
o How? A physical/economic bond
You have two clearly identifiable objects, so identity hasn’t changed by adding one component to the other eg bike
and saddle
Link to unitary principle: These components now make one unit
What is a principle thing?
o Components combine and the ownership of the individual parts is lost as they now form part of one unit (the principal
thing)
Bike example: A takes saddle of B’s bike and puts it on A’s
o B loses ownership of saddle in combination, because the saddle (component) is now part of the bike(principal
thing)
o You don’t create something new; you just shift ownership of a thing.
o The ownership of the seat just ceases to exist as a separate unit, and the ownership of the whole unit shifts to the
owner of the principal thing
Combination in Dutch law
Art. 5:14 Section 1 Dutch Civil Code
‘The ownership of a moveable thing that becomes a component of another thing which is to be considered the principle
thing, passes to the owner of this principle thing.’
But what is the principal thing and what is merely a component?
Example: Suppose you have a gold ring (worth $200), say that you borrow a diamond from someone (worth
$1000) and ask the jewellers to put it in the ring. Who owns the diamond ring? You have to decide what is the
principle thing and what is merely the component thing.
Component
Art. 3:4 Dutch Civil Code
(1) All that, according to general accepted views (common opinion), forms a part of a thing, is a ‘component’ of that thing.
(2) A thing that is attached to another principal thing in such a way that it cannot be separated from it without causing
meaningful damage to one of the things, becomes a component of the principle thing.
Criteria (1): Common Opinion
Criteria (2): Physical Criterion
Application of the criteria to the example…..
Criteria 1: What does society think is the components of this ring?
Common opinion says the diamond is part of the ring rather than the ring being part of the diamond
Criteria 2: Can you remove the diamond without destroying the ring?
This would probably need to be professionally assessed if so it doesn’t have to be a component
Art. 5:3 Dutch Civil Code
As far as the law does not provide otherwise, the owner of a thing (unit) is owner of all its components
,Principal thing
3:14 section 3 Dutch Civil Code
The principal thing is the thing of which the value exceeds the value of the other thing considerably or the thing that is
regarded by generally accepted views (common opinion) as the principal thing.
Criteria (1): Common Opinion
o Important to remember that common opinion will not always see the most valuable as the principle thing
eg the Dutch legislator has considered that the ring is the most important this is a ring ultimately.
Criteria (2): Value of objects (monetary)
o The diamond at $1000
Which criteria triumphs in conflict?
In general, if the criteria conflict and point in different direction, according to Dutch Law, common opinion will prevail
Combination in French law
‘The incorporation to another thing of a thing, whose title is retained, is not a bar to the rights of the creditor where those things
may be separated without suffering damage’
o Here you have more protection for owners of objects that are installed in other objects, because if they can be
removed without damage the rights will be retained
Principle things in German law
German law makes a distinction between essential and non-essential components.
An essential component cannot be removed without destroying it (makes no sense to do so.)
The essential component becomes owned by the owner of the principle part.
Article 93 BGB
‘Parts of a thing that cannot be separate without one or the other being destroyed or undergoing a change of nature cannot be the
subject of separate rights.’
Comparison between systems:
Dutch: If you install a wheel on the car in the Netherlands you will probably lose the right of ownership over it because of
the common opinion that it is now part of the car
Germany: In Germany you will not lose rights of ownership because it is a non-essential part which can be removed without
causing destruction, it will not change the nature of the wheel because it can still be used as a wheel and the car likewise
remains a car.
Combination in the DCFR:
VIII 5-203: Remedy
o Provides much more protection for the owner of the parts than the Dutch system
(1) This article applies where goods owned by different persons are combined in the sense that separation would be impossible
(destroyed) or economically unreasonable (change in nature)
Like the German text
(2)Where one of the component parts is to be regarded as the principle part, the owner of that part acquires sole ownership of the
whole, and the owner or owners of the subordinate parts are entitled, against the sole owner, to payment subject to sentence,
secured by a propriety security right in the combined goods.
Owner of the principal part acquires ownership of the whole
, The person loosing ownership of the component will lose ownership but claim the value of that wheel back from
the owner of the principle part, if the owner does not pay up then the former owner of the wheel can actually sell
the car and pay himself on the proceeds because this is a security right (proprietary right.)
COMMINGLING (commixtio/confusio)
What is commingling?
o Movables belonging to different owners get mixed, unlike combination they cannot be separated or clearly identified
Commixtio is where several identical things are gathered together as a mass
Confusio is where different thing are mixed together and one mixture results
Two things become mixed/confused
Example: When Company A applied allot of oil and then Company B does the same and they become mixed
(Commixio)
Link to the unitary principle: The larger quantity of oil would now, according to common opinion, be seen as a unit
Commingling in the Dutch Civil Code
Art. 5:15 Intermixture of movable property
When movable things which belong to different owners are intermixed in such a way that they have become one single thing, the
previous Article shall apply accordingly.
o Therefore, putting two of the same chairs together would not count, they can be separated, this is peculiar with
the Dutch law
Lecture Example: The gold coffee cup: He gives 4 people a gold coffee cup and then mixes them so that
nobody knows whose is whose, you cannot prove which particular one is shared by you. The article n Ducth law
would not be applicable in order to prove owership
Art 5:14 Dutch Civil Code
(2) If none of the movable things can be pointed out as the principle thing and they belong to different owners, then these owners
will become co-owners of the new thing, each of them for a share proportionally to the value of the movable thing he owned
before.
Commingling in German law
(1) If movable objects are inseparably mixed or mixed with each other, the provision of § 947 shall apply mutatis
mutandis.
(2) The inseparability is the same if the separation of the mixture or confounded goods would be disproportionate
Section 947
Connection with moving things
(1) If movable things are connected with each other in such a way that they become essential parts of a uniform thing, then the
previous owners become co-owners of this thing; the proportions are determined by the ratio of the value that the things have at
the time of the connection.
(2) If one of the items is to be considered as the main item, then its owner acquires the sole ownership.
o Example: A thief steal Gemma’s money and puts it in a sock while mixing his money in too. Gemma becomes the co-
owner of whatever’s in the sock, doesn’t lose ownership but becomes the co-owner of the specific bulk. In Dutch law you
would lose ownership because it is not a single thing
Commingling under the DCFR
VIII-5:202: Commingling
, (1) Where goods owned by different persons are commingled in the sense that it is impossible or economically
unreasonable to separate the resulting mass or mixure into its original constituents, but it is possible and econoomically
reasonable to separate the mass or mixture into proportionate quantities, these persons become co-owners of the
resulting mass or mixture, each for a share proportionate to the value of the respective part at the moment of
commingling.
PRODUCTION (Specificatio)
o A new good is created
o Not about components belonging to different owners becoming either combined or comingled but about the about
materials coming together to produce a new unit
o Link to the unitary principle: A new unit is created
o It is hard to tell what is a new thing, you need to figure out what is common opinion
Egg v Chicken case: Farm A buys eggs, puts them under warm lamps and creates chickens. Poultry Farm B which delivered eggs
asked for retention of ownership clause ‘only at the moment where you pay for eggs will A become the owner.’
o A didn’t pay for eggs, so they were still owned by B when the chickens hatched. B said the chickens are fruits of
their eggs and so they own the chickens.
o Court has to decide if the chickens are new, or if fruits of eggs are owned by B
Ruling:
Court said farm that didn’t pay for eggs becomes owner of chicken because it produced them. They created these chickens
because the common opinion is that the chicken is new
The big question: Who owns the new thing?
-Owners of the original materials?
-The person that created the thing?
Production in Dutch Law
Art. 5:16 Creation of a new thing
( 1) Owner of the original materials owns the new thing
(2) If a new thing is partially created from something that wasn’t owned by the producer, the producer still owns it because of the
labour costs
Production in German Law
Section 950
(1) A person who, by processing or transformation of one of more substances, creates a new moveable thing acquires the
ownership of the new thing, except where the value of the processing or the transformation is substantially less than the
value of the substance. Processing also includes writing, drawing, painting, printing, engraving or a similar processing of
the surface.
(2) On the acquisition of ownership of the new thing, the existing rights in the substance are extinguished
Production in the DCFR
VIII.-5:201
(1) Producer becomes owner of new goods and the owner of the material is entitled, against producer, to payment equal to the
value of the material, secured by a proprietary security right
o Similar to combination because you are using materials that originally belonged to someone else
