Chose in Action

A legal term referring to a personal right to possess property or claim debts, which can only be realized by taking legal action.
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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

  1. 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.

  2. 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.

  3. 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
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