Closed Range Rule vs Open Range Rule
Closed Range Rules require livestock owners to fence in their animals (liability rests on the owner), while open range rules (or "fence-out") allow livestock to roam freely, placing the burden on neighboring landowners to fence animals out. In closed range, owners are liable for damages caused by loose livestock.
Open Range Rules have no liability with the owner generally not being liable if livestock wander onto property or roads, as the responsibility to protect property falls on the landowner themselves.
English Rule vs American Rule
English rule in law, also known as the "loser-pays" rule, dictates that the losing party in a lawsuit pays the prevailing party's attorney's fees and legal costs.
American rule in law is where each party typically pays its own legal fees.
Non-Voluntary Transaction
A non-voluntary (or non-volitional) transaction is an exchange or transfer of assets, rights, or obligations that occurs without the direct influence, control, or willing consent of one or more parties involved. One example is THEFT!
This differs from "voluntary transactions" like buying/selling goods, bargaining for a trade, etc. when both sides agree to the transaction.
Estray Statutes
Estray statutes govern the legal procedures for handling lost goods (often wandering livestock) whose owner is unknown. These laws typically allow finders to secure the animal, require notification to local authorities, and provide a process for the rightful owner to reclaim it by paying costs, or for the finder to claim ownership after a set time.
In other words, these are laws for "finders-keepers" ... losers weepers (with certain conditions)
Free-Rider Effect/Problem
The free-rider effect occurs when individuals consume more than their fair share of a resource, or benefit from a public good/service without paying for it, leading to underproduction or market failure.
You may have worked in group projects where one more more members did not do any work and the rest of the group did most/all of the work. In that case, those 'lazy' members were free-riders ... hopefully this doesn't describe you!
Adverse Possession
Adverse possession, or "squatter's rights," is a legal doctrine allowing a person to gain legal ownership of another’s land by occupying it without permission for a continuous, uninterrupted period, typically 10 years in Ontario.
The possession must be open, notorious, and exclusive, meaning the true owner’s rights are ignored. Once the statutory time passes, the original owner may lose their right to the land.
A rationale is that if land is so inefficiently managed that an individually (squatter) can openly act as an owner for 10 years, then it is probably more efficient for the property to be used by the squatter.
Lease
Similar word is rent/rental. A lease is a contract in which a lessor (owner) grants a lessee (user) the privilege of utilising an asset, e.g., property, automobiles, or machinery, over a specified period.
Social Value
Social value is the net positive impact an activity/organization has on society, the economy, and the environment. Think about this similar to social benefit. It often prioritizes long-term value creation by focusing on what matters to people, such as improved health, local employment, and environmental stewardship.
A highway provides more social value than someone's old rusted shed.
Sentimental Value
The value of something to someone because of personal or emotional associations rather than material worth. YOUR house would probably have sentimental value that makes you feel that it's worth more than market value.
Expropriate
Expropriated happens when a government forces a private property owner to give up land or assets for public use, such as infrastructure projects. It involves a transfer of ownership with typically compensation to the owner.
Imagine your house being converted into a TTC subway station. The government needs give you some value to compensate taking your house away. They can compensate at market value through the use of a real estate appraiser.
Zoning Restrictions
Zoning restrictions are laws regulating land use, building height, density, setbacks, and parking to control community development. They could control and regulate:
Land Use (main one): Defines if a property is used for residential, commercial, industrial, or institutional purposes.
Building Standards: Regulates maximum heights (e.g., up to 250m in certain Toronto zones), density, and building envelopes.
Setbacks: Dictates how far structures must be from property lines.
Parking & Infrastructure: Determines minimum required parking spots and, in some cases, rules for bicycle parking.
Specific Restrictions: Includes rules on "iceberg homes" (underground floors) and, as of late 2025, specific constraints on food preparation in retail areas.
Tragedy of the Commons
Tragedy of the Commons is a concept where individuals, acting in their own self-interest, overuse and deplete a shared, finite resource. Sometimes people may even take steps at preventing others' usage.
This behavior occurs because the benefits of exploitation are enjoyed individually, while the costs are shared by all, leading to the destruction of common goods like pastures, oceans, or the atmosphere. A relevant example to most people is when public spaces are overused when people take advantage of the services/benefits offered.
In social terms, the quantity used of the resource PMB > PMC but PMB < SMC (not socially efficient).
Rule of Capture
The Rule of Capture is a principle in property rights that grants ownership of a resource to the person who first extracts it, even if it migrated from a neighbor's land. Note that the found resource must not be previously owned, this is not finding someone's lost property.
This "first in time, first in right" concept means a landowner can drill on their property and claim all oil/gas that comes up, regardless of its origin, encouraging development but also leading to rapid extraction and waste. This also applies to fishing and overexploitation.
Auction
An auction is an event where goods or property are sold to the highest bidder in a public sale. Each individual bidder competes by offering a higher and higher price until there is one bidder left (all the others have given up due to lower reservation prices).
Liability
Liability (or "being liable") means being responsible for something, especially by law. If you damaged someone's car on purpose, you are liable to pay for their repairs.
Normative Coase vs Hobbes Theorem
Normative Coase Theorem: Assign the legal entitlement to the party who can use it most efficiently (maximize welfare). There is a focus on facilitating bargaining by lowering transaction costs, suggesting courts should assign rights to maximize social surplus.
Normative Hobbes Theorem: Give the legal entitlement to the party who would be harmed the most if they didn’t have it. When private negotiation fails (high transaction costs), the law should allocate property rights efficiently to the party who values them most, minimizing potential harm and waste. This means government intervention.
The difference is that Coase is about maximizing social surplus/welfare while Hobbes is about protecting vulnerable parties from harm.
Coase Theorem
The Theorem of Coase, formulated by Ronald Coase, states that if property rights are well-defined and transaction costs are zero (or very low), private parties can bargain to efficiently solve externalities, regardless of who initially holds the rights.
Depending on variant/invariant Coase, the final allocation may be dependent on the initial distribution of rights (see Tutorial 2).
Strict Liability
Strict liability holds an individual/firm responsible for damages or offenses regardless of their intent, fault, or negligence. Liability is established simply by proving the action caused harm. Unlike "no liability" where the party is not held responsible for their actions.
Injunction
An injunction is a court-ordered remedy that forces an individual/firm to either perform a specific act or refrain from doing a particular action. It is used when monetary compensation is inadequate to fix a wrong, acting as a direct command to stop or prevent irreparable harm. Disobeying an injunction can result in civil or criminal penalties.