Legal Object Defined
Legal object (from Latin: cuius est commodum eius est onus) in common law jurisdictions is property or an item of tangible or intangible property that a person has the right to dispose of, and that is capable of legal agreement.
Legal objects are the subject matter of legal agreements such as wills, trusts and contracts on matters ranging from real property (real estate) to intellectual property.
A legal object may be a thing, which means any object of the external world . It may also be the status, rights or obligations of a person, including a legal person, which means the rights or obligations of corporations and other entities that have the capacity to act as legal persons.
The subject matter of an agreement or contract (such as what is to be done or given) must be legal, meaning it must be lawful and not against public policy (the principles that underpin a community’s moral, ethical and legal standards). The term almost always refers to tangible items, so salary, obligations, things, and the performance of services have the nature of a legal object.
Categories of Legal Object
Types of legal objects include movable and immovable property, tangible and intangible property, third party claims, etc. There is a distinction between movable and immovable property. Movable property is that which can be moved from one place to another, as for example a cow, carriage, water, etc. To this class of property belong generally all corporeals, except such as are inherently permanent.
Immovable property is that which is permanently fixed in one place, as for example a house or tree. Movable property is thus distinguished according to its nature, immovable property according to its situation.
Immovable, however, also signifies that which cannot be removed without injury, as a debt secured by mortgage, release or equivalent security; these are said to be immovables, for the purposes of the law, if they are local property wholly in the state or territory, as differences of law and custom prevail as to their attachment or no attachment to the land; as, for instance, with rivers, streams, pits and mines, crops, trees, minerals and the like.
Tangible property (in relation to certain other forms of property) is that in relation to which the owner has possession or control over the exercise of a right to possess or dispose of it, and the right can be satisfactorily enforced as against third parties.
Intangible property on the other hand is that in relation to which the owner lacks such possession or control or the management of those rights. The value of an interest in intangible property is derived from the enforceability of rights which are evidenced by it rather than from physical possession, control, possession or ownership of the property itself. For example, debts and rights to receive payment and royalties are not ‘possessory’ interests in property.
Legal Object and Legal Subject Contrasted
In order to understand the concept of legal object, it is also necessary to know its opposite. This is known as the legal subject. The legal subject is an entity capable of having, exercising and being sued upon the rights and duties of the law.
Although mostly used in the context of legal proceedings, the term legal subject is often used in other contexts as well. For example, under the usual circumstances under which a trust exists, the trustee is the legal subject related to the trust.
The legal subject contrasts with the legal object in that the legal subject is the one who acts, while the legal object is the one that is acted upon. Thus, a physical person can act as a legal subject in a variety of situations, while the legal object generally refers only to an object of tangible or intangible nature.
Contractual Examining of Legal Object
The concept of legal object or "oggetto giuridico" in Italian law refers to the content of a legal relationship that is created or regulated by a contract. In the context of private law, an object must be lawfully possible, economically possible and determinable.
The object could be a service that is to be fulfilled, an obligation, or an act that is performed by one or more parties in a contract. For instance, where a party to a contract undertakes to pay an amount of money in exchange for a right, the object of the contract could be that right.
In case a contract does not have a valid legal object, it might be void.
Italian law sets out that an object is lawfully possible where it does not breach the laws of public policy, and does not contravene public morals. The law regards public morals with an objective standard: For example, contracts for the enjoyment of prostitution are not legally possible, unlike contracts for masochism or bondage that are regarded subjectively.
Contracting parties can define the performance of the contract as they like. However, underlying the contract must be an exchange, that is defined by law, between the elements agreed upon by the parties.
A contract cannot have an object that is impossible to perform. For instance, a statement in a contract that one of the parties has to perform a certain act but that it is not possible to do the act is not a valid legal object.
There must also be an economic possibility. For example, a contract that stipulates the sale of bottles of water for a set price, but which is sold at a peppercorn price, is not possible as such.
Finally, the legal object must be demonstrable, or determinable. The object itself must be identifiable.
In a typical employment contract, the legal object might be the work that the employee must do, as defined by the employment contract. In the case of a contract of purchase and sale, the object could be the subject of the sale.
The Italian Civil Code sets out some examples of when a legal object is not valid. For instance, an agreement on the maintenance of other marriages, marriages between a man and two women, an agreement on someone else’s moral liberty, an agreement with a mutual self-commitment, and an agreement on giving up your own rights are not valid.
The object must correspond with something that is legally possible, and must not infringe public policy, cannot involve immorality or deception, cannot inspire criminal acts, and cannot be prohibited by law.
If an object is found not to be valid, it is void.
A contract that deals with an object that is impossible, or is deemed immovable, because it is so attached to the real estate that it cannot be removed, cannot be transferred. This means that the object cannot be assigned, therefore it is not legally possible for it to be sold.
An object is deemed illegal if it contravenes public policy or the laws of morals. It is also illegal where it violates the principles of protection for public order and security, such as commercial, social, and environmental policies.
Pitfalls with Legal Objects
Despite the legal object being a core concept in law, its application often gives rise to some challenges and issues. For instance, but not limited to: (a) whether the legal object is lawful, (b) the potential for disparate understandings of the same legal object (whether parties have different preferences on the legal object), and (c) questions regarding the capacity of the parties to the legal object.
Firstly, an inappropriate understanding surrounding the concept of the legal object may mean that there is no contractual basis to either advance or defend a claim. For instance, in the string of cases regarding guarantees taken by banks, it was found in HSBC Bank plc v Robinson (1992) that a guarantee without consideration was not enforceable as the promise to pay different amounts due to variation of interest rates and the indefinite period of the guarantee made it uncertain and not binding despite the fact that the bank had enjoyed consideration in the form of a guarantee fee.
A more common dilemma that arises from the application of the legal object concept involves situations where one party has a preference for the legal object whereby the other party may prefer something else. For instance, in a recent Singapore Court of Appeal decision regarding service contracts, it was held in SIA Engineering Co Ltd v United Engineers Ltd [2015] 5 SLR 591 that where the parties entered into a premixed fuel supply contract for an indeterminate period, the law considers the contract to be determinable. The implication is of vital importance to both parties, as the party that has a preference for the longer relationship will be rightfully entitled to force the shorter relationship party to continue with the shorter relationship until the end of the originally contracted period. The weightier party is therefore given some amount of de facto freedom and autonomy as a result of such remedies. For example , the court can award damages to compensate the aggrieved party. It can also grant an order for quantum meruit, which means that the aggrieved party will be entitled to a payment from the other party in proportion to the benefit that the aggrieved party has provided. Alternatively, the court may exercise its equity jurisdiction and grant an order for specific performance until a set date, after which the other party can exercise their rights to terminate.
A closely connected issue arises when there are questions regarding the capacity of parties to the contract. For example, if the legal object is a piece of land, a person may invalidly contract to dispose of that land having no capacity to do so. The assumption here is that the legal object is lawful (as to the type of legal object), for instance an item arising out of good title and duly transferred under applicable laws.
It is settled law that the capacity within which a party to a contract is capable of contracting may render the object ineffective. In such a situation, the law provides certainty by allowing the aggrieved party to rescind the contract on the ground of incapacity of either of the parties to the contract, thereby leaving them with an action for damages and compensation. Damages may be awarded in the way of general, special, indirect, consequential or liquidated damages. However, an aggrieved party is usually entitled to limit its claim to general damages, as it can be inferred that parties are generally satisfied with damages that provide compensation for all the consequence of the breach.
In conclusion, it can be seen that whilst the concept of legal object is a well-established concept of law, its application gives rise to issues and challenges to be addressed.
International Considerations of Legal Object
In international law, the concept of an object functions as an extremely important limiting principle. It is often said that an object in law is synonymous with a purpose, if a more generic term may be found for it. In practice, this means that the object of an international treaty will often be reflected directly in the peremptory norm that is said to be violated by the treaty itself. Here, we are talking about a manifestation of intentionality on the part of the actors involved, which is often relevant in order to determine the legal object of an agreement. In the domestic sphere, the requirements of an object in law can be said to be as such: there must be something that the parties can take away from the agreement, that it has been thought through and wished for, that it falls within the competency of the party granting the object through its public policy, and that it does not interfere with any other public policy. In international law, the requirements are more stringent. A legal object may not violate a peremptory norm of international law (jus cogens) or a regional customary norm. The legal object may also not violate international and national public order as a whole, in particular where the regional or global public order is also violated. This means that a legal object in international law is not only measured with reference to its legality in terms of the domestic positive law of an individual state, but also with reference to customary international law, general principles of international law, regional law, or other relevant sources of international law, such as security resolutions by the UN Security Council.
Case Law in Legal Object
A noteworthy case concerned the legality of a non-alcoholic beer product in Illinois. The Illinois Beverage Association filed a lawsuit against the Illinois Department of Revenue, alleging that its examination of the product as subject to sales tax was erroneous. The plaintiff claimed that the product was a "not important beverage" which was defined as a nonalcoholic drink not containing "40% or more alcohol by weight." The administrative law court dismissed the plaintiff’s claim, concluding that a deference was warranted in this case, and later the Court of Appeals affirmed its decision. However, while the Executive Committee of the Illinois General Assembly overruled the ruling of the administration, the supreme court ruled that it did not have jurisdiction over the case, thus validating the tax on the product and establishing a legal precedent. Thus were termed, legal objects that are exempt from taxation.
Another example, is the case of Komal v. California as described by JB Prosecutor. Following the great California Recession from 2007 to 2012, "rules" were added as legal objects to the California Revenue and Taxation Code . The problem, however, was that the new rules were added without any safeguard for those who had either already purchased or were in the process of purchasing rules prior to the law being added. According to JB Prosecutor, the new law caused this set of rules to lose its status as a "peculiarity of nature." A lawsuit in the Los Angeles Superior Court against the State Board of Equalization and its former Executive Director/Chief Counsel, Catherine "Cat" Brenner was brought by a California resident, Janet Komal. Janet Komal sought to replace over half of her roof with additional solar panels that she had previously purchased back in July 2009. The plan was to add six solar panels to her roof alongside her old ones. However, Ms. Brenner believed the law had to be applied in the full context and that this arrangement would cause Janet Komal to be obtaining more than the 2 kWh of solar power. Ms. Brenner initiated an investigation and determined Komal was in violation of the law. She was subsequently fined and sued for $1,285.
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