Chose in Action
Definition
A Chose in Action is a legal term that refers to a personal right to possess property or claim debts that can only be realized by taking legal action. This is an intangible right and is essentially a claim or debt upon which recovery may be made through a lawsuit. A key characteristic of a Chose in Action is that it does not represent a present, tangible possession but rather a future right contingent on legal success.
Examples
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Unpaid Debts: If a person is owed money under a contract and the debtor refuses to pay, the creditor has a Chose in Action that can be pursued through legal action.
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Intellectual Property Rights: A patent holder’s right to sue for patent infringement is a Chose in Action until the infringement claim is resolved in court.
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Insurance Claims: If an insured party has an insurance claim denied by the insurer, the insured has a Chose in Action to recover the insurance benefits through a lawsuit.
Frequently Asked Questions
Q1: What is the difference between Chose in Action and Chose in Possession?
- A: Chose in Action refers to a right that requires legal action to enforce, such as a debt or claim, whereas Chose in Possession refers to tangible physical objects that one can possess directly.
Q2: Can a Chose in Action be transferred or assigned to another party?
- A: Yes, in most jurisdictions, Chose in Action can be transferred or assigned to another party, allowing the assignee to pursue the legal action on their own.
Q3: What legal remedies are available for enforcing a Chose in Action?
- A: The primary legal remedy is a lawsuit in a civil court, which can result in a judgment for damages, specific performance, or other relief that enforces the right.
Q4: How is Chose in Action relevant in bankruptcy proceedings?
- A: In bankruptcy, Chose in Action can be considered part of the debtor’s estate, meaning any pending claims or rights to sue can be pursued by the bankruptcy trustee to recover funds for creditors.
Q5: Are Choses in Action taxable?
- A: The tax treatment of Choses in Action varies depending on the jurisdiction and the nature of the underlying claim, but generally, any recovery can be subject to taxation as income.
- Assignment: The transfer of rights or property from one party to another.
- Tort: A wrongful act leading to civil legal liability.
- Intellectual Property: Legal rights to inventions, designs, and artistic works.
- Judgment: A court’s final decision on the legal matters before it.
- Creditor: A person or institution to whom money is owed.
- Debtor: A person or institution that owes money.
Online Resources
Suggested Books for Further Studies
- Law of Obligations by Geoffrey Samuel
- Contract Law by Ewan McKendrick
- Civil Procedure by Richard D. Freer
Fundamentals of Chose in Action: Legal Studies Basics Quiz
### What type of right does a Chose in Action represent?
- [ ] A present right to tangible property.
- [ ] An ownership right in real estate.
- [x] A personal right to possess property or claim debts through legal action.
- [ ] A criminal statute.
> **Explanation:** A Chose in Action is a personal right to possess property or claim debts that can only be realized by taking legal action.
### Can a Chose in Action be immediately possessed?
- [ ] Yes, it is a tangible item.
- [x] No, it becomes possessory only upon successful completion of a lawsuit.
- [ ] Yes, if it is a financial instrument.
- [ ] No, it remains intangible.
> **Explanation:** A Chose in Action is not a tangible item and becomes possessory only upon successful completion of a lawsuit.
### Can Choses in Action be transferred to another party?
- [x] Yes, they can be assigned or transferred.
- [ ] No, they are inherently personal and non-transferable.
- [ ] Only if both parties consent to the transfer.
- [ ] Yes, but only in commercial transactions.
> **Explanation:** In most jurisdictions, Choses in Action can be transferred or assigned to another party.
### What is a primary remedy for enforcing a Chose in Action?
- [ ] Mediation.
- [x] Lawsuit in a civil court.
- [ ] Arbitration.
- [ ] Criminal charges.
> **Explanation:** The primary remedy for enforcing a Chose in Action is a lawsuit in a civil court.
### How does a Chose in Action relate to intellectual property?
- [ ] It does not relate to intellectual property.
- [x] Intellectual property infringement claims can be considered Choses in Action.
- [ ] It represents the tangible assets of intellectual property.
- [ ] It applies only to patents.
> **Explanation:** Intellectual property infringement claims can be considered Choses in Action.
### What would be an example of a Chose in Action in the context of bankruptcy?
- [ ] Physical assets owned by the debtor.
- [ ] Strictly the debtor's cash holdings.
- [x] Pending legal claims or rights to sue for the debtor.
- [ ] Only secured debts.
> **Explanation:** In bankruptcy, Choses in Action can include pending legal claims or rights to sue that become part of the debtor's estate.
### The term "Chose in Action" falls under which area of law?
- [ ] Criminal Law.
- [ ] Administrative Law.
- [x] Civil Law.
- [ ] International Law.
> **Explanation:** Chose in Action primarily falls under civil law as it deals with personal rights to claim property or debts through legal action.
### Why is the term "Chose in Action" significant in financial law?
- [x] It helps specify the nature of financial claims.
- [ ] It refers to physical trading assets.
- [ ] It involves criminal financial activities.
- [ ] It pertains to tax evasion matters.
> **Explanation:** The term "Chose in Action" helps specify the nature of financial claims or rights that require legal proceedings to enforce.
### Can an insurance claim be considered a Chose in Action?
- [x] Yes, if the claim is contested and requires legal action to resolve.
- [ ] No, insurance claims are always Chose in Possession.
- [ ] Only if it exceeds a large sum.
- [ ] No, insurance claims do not fall under this category.
> **Explanation:** Insurance claims may be considered Choses in Action if they are contested and require legal action to resolve.
### Are Choses in Action recognized in all legal systems?
- [ ] No, they are specific to common law systems only.
- [x] Yes, but the concept may vary across different legal systems.
- [ ] Only in legal systems that follow English law.
- [ ] They are concept unique to the U.S.
> **Explanation:** Choses in Action are recognized in various legal systems, though the specifics may vary.
Thank you for delving into the intricate realm of Chose in Action and testing your knowledge with our interactive quiz. Keep exploring the depths of legal studies!
