Foundations of Law and Economics
Intermediate
Property Rules and Liability Rules
Two ways of protecting entitlements: property rules require the entitlement holder's consent to transfer, while liability rules allow transfer upon payment of an officially determined amount.
Why It Matters
The distinction helps analyze injunctions, damages, nuisance, takings, contract remedies, corporate control rights, and regulatory compensation when bargaining costs or valuation problems differ.
Selected Literature
A short list of directly relevant archive entries.
1960
Introductory
1972
Intermediate
Property Rules, Liability Rules, and Inalienability: One View of the Cathedral
Guido Calabresi and A. Douglas Melamed
Harvard Law Review
2004
Advanced
2016
Advanced
Related Cases
1970
Foundations of Law and Economics
Boomer v. Atlantic Cement Co.
26 N.Y.2d 219, 257 N.E.2d 870 (1970)
Permanent damages, injunctions, and the choice between property-rule and liability-rule protection.
1854
Foundations of Law and Economics
Hadley v. Baxendale
9 Exch. 341, 156 Eng. Rep. 145 (1854)
Foreseeability, information disclosure, and limits on consequential damages for breach of contract.
1972
Foundations of Law and Economics
Spur Industries, Inc. v. Del E. Webb Development Co.
108 Ariz. 178, 494 P.2d 700 (1972)
Coming to the nuisance, injunctions, and indemnity for relocating incompatible land uses.
1707
Foundations of Law and Economics
Keeble v. Hickeringill
11 East 574, 103 Eng. Rep. 1127 (K.B. 1707)
Property protection, malicious interference, and incentives to make productive use of land.