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Basic Legal Principles

Our legal system has several fundamental principles that may not always be apparent, but they do serve as the foundation for some aspects of the law.  This page introduces several of those principles.

Disclosure -- our legal system does not make decisions for individuals, but it does take steps to assure individuals have access to information so they can make an informed decision.  It is common for the law to assure access to information by requiring others, in specified circumstances, to reveal or disclose information they may have that the decision maker may need to make an informed decision.  The following list offers some examples.

• Prospective spouses are required to disclose their financial affairs to one another before they enter into a premarital agreement.  If the disclosure is not made, the agreement will not be enforceable (e.g., N.D.C.C. §14-03.1-06).
• Businesses soliciting investors must disclose information about the business and its principals as part of the solicitation (N.D.C.C. §10-04-08(4)).
• Trustees and agents must disclose information about their activities to the beneficiaries and principals (e.g., N.D.C.C. §30.1-34-03).
• Food companies must label their product so consumers are aware of what they are purchasing.

In these examples, the law does not make the decision but instead takes steps to assure the decision maker has information with which to make the decision.

Transferability -- our legal system assumes that society is best served if our resources are put to their best/highest value use (without abusing them) and that their transferrability is the best way to assure they will be put to their best/highest value use.  That is, if you think you can put my property to a good use, make me an offer.  If the value you offer me is more than the value I think I will receive from continuing to own the property, I may sell to you.  Also, your offer will be no more than what you value the property.  Thus if your offer is enough to motivate me to sell to you, we have to assume the property is being shifted to a higher value use.  But this determination is being made in the marketplace; not by government.

• Generally, one of the incidents of ownership of property is the right to convey it. Dennison v. N.D. Dep't of Human Services, 2002 ND 39, 640 N.W.2d 447
  

Act like an owner -- our legal system expects property owners to fulfill their role as owner by acting like an owner; and if they do not fulfill that role, our law may not preserve their ownership rights. 

• Example -- the concept of adverse possession is that ownership will transfer from the current owner to a new owner -- without agreement or compensation -- if the current owner does not assert his or her rights of ownership for an extended period of time during which the new owner has been acting like the real owner by possessing, using and excluding others from the property.
• Example -- a co-owner is not entitled to share in the revenue from a tract of land if the co-owner is not participating in managing the property.  Instead, the fellow co-owner who is peforming the management responsibilities is allowed to retain all income (after paying expenses like the mortgage and property taxes).
  

The law is ascertainable and predictable -- the legal outcome of a situation or fact pattern should be predictable. For example, if I enter into a contract and then do not fulfill my obligations under the contract, I will be required to compensate the other party to the contract for the loss I caused them by not fulfilling my contractual obligations. This outcome is known and understood by both of us before we enter into the contract, and thus is expected to be part of our thought process in deciding whether to enter into the contract. Also, everyone has access to the laws; they are public information and available for anyone to read. The rules (laws) of our society are not secret.

• Individuals are expected to know and understand the rules/laws that pertain to their situation. Not knowing the law is not a justification for not complying with the law. Individuals who do not know what the law is for their situation are expected to make the effort to learn about the relevant law before they proceed with their action.

Find a peaceful solution -- the citizens of our nation are expected to arrive at a peaceful solution to a dispute by using the courts, rather than risk the potential of a violent situation by "helping yourself" or "taking the law into your own hands." Individuals are expected to try finding a solution to a dispute through negotiations, but if that fails, the alternative is to seek resolution through the judicial system. An individual whose actions "disturb the peace" will be charged with a crime even if the reason for disturbing the peace is "honorable."

• If force is necessary, it will be exercised by society through goverment, such as a sheriff following a court order after the court has reviewed the situation and all parties have had an opportunity to present their arguments or perspectives.
• Individuals are allowed to use only the force necessary to protect themselves and others from immediate harm.

All property rights are owned by someone -- and if an owner cannot be identified, the rights are owned by the state. Property rights cannot be created or destroyed; they can only be defined and transferred, even if the transfer takes the form of a government regulation.

We place more value on life than we do on property -- if the choice is between injuring a person or damaging (protecting) property, the law generally expects us to not injure a person.

Last updated July 25, 2006

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Published by Agribusiness and Applied Economics
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