parent nodes: adverse possession | business judgment | Calabresi corollary | Coase Theorem | Defense of Property | duty of loyalty | entitlement | Hand Formula | Private Neccessity | Richards v Richards | Torts Theories | transaction costs
liability rule
An entitlement that any actor may destroy if he is "willing to pay an objectively determined value for it."
Multiple violations of a liability rule may lead to Punitive Damages or criminal liability; at the same time, criteria affecting liability such as the Hand Formula may change between different suits.
Liability rules are more appropriate where transaction costs are high, so that the liability rule creates an ex ante hypothetical bargain. [Eckert v Long Island Ry].
See Calabresi corollary to the Coase Theorem
See also Epstein restatement of the Coase Theorem
Cases involving liability rule
See Coase Theorem, Hand Formula