“Contract-Wrapped Property,” an article authored by Professor Danielle D’Onfro has been published in the Harvard Law Review.
In the abstract, she writes:
For nearly two centuries, the law has allowed servitudes that “run with” real property while consistently refusing to permit servitudes attached to personal property. That is, owners of land can establish new, specific requirements for the property that bind all future owners—but owners of chattels cannot. In recent decades, however, firms have increasingly begun relying on contract provisions that purport to bind future owners of chattels. These developments began in the context of software licensing, but they have started to migrate to chattels not encumbered by software. Courts encountering these provisions have mostly missed their significance, focusing instead on questions of contract doctrine, such as whether opening shrink wrap constitutes assent to be bound. Property concepts never enter their analysis. The result of this oversight is that courts have de facto recognized equitable servitudes on chattels—a category that our legal system has long forbidden. Yet because courts are often unfamiliar with property-law principles, and because lawyers have failed to make property-based arguments, individual contracts cases are remodeling the architecture of property rights without anyone realizing it.
This Article identifies the unexpected emergence of servitudes on chattels via contract law. It explores the consequences of that development and argues that we should see it as deeply troubling. By unwittingly reestablishing equitable servitudes on chattels—something our legal system rejected long ago for good reason—this change in law threatens to undo longstanding precedent, disrupt settled expectations, and effectively recognize a new form of property. More generally, elevating contract over other private law doctrines disrupts the private law’s equilibrium in which a complementary suite of doctrines developed to promote economic liberty while curtailing opportunistic impulses. While the pathologies that have flourished internally in modern contract doctrine have been well studied by scholars, the way in which contract law is threatening to consume property and other areas of private law has received less attention. Using servitudes on personal property as a window into the larger problem of contract-dominated private law, this Article explores the private law’s role in shaping environmental conservation, autonomy, innovation, and the legitimacy of the law itself. Those values are all in jeopardy as if contract law is allowed to encroach on property and to erode the very concept of ownership.