A Chose in Action is a term rooted in common law, denoting a personal right to recover a debt, claim, or other monetary sum through legal action. Unlike tangible property, a chose in action is not physically possessed but rather represents the right to potential possession upon successful adjudication.
Legal Definition and Characteristics
A chose in action is essentially a right to sue and obtain a remedy for a breach of duty or obligation. It encompasses a broad range of claims and debts, including contract breaches, unpaid debts, and personal injury claims.
Types of Chose in Action
- Contractual Chose in Action: Rights arising from contract agreements, such as unpaid invoices or breached terms.
- Tortious Chose in Action: Claims for damages resulting from tortious acts, such as negligence or defamation.
- Equitable Chose in Action: Rights based on equity, including claims for specific performance or rescission.
Considerations
- Transferability: Choses in action can often be assigned or transferred to another party.
- Statute of Limitations: The right to sue on a chose in action is subject to limitations periods under statutory law.
- Enforceability: Enforcement of a chose in action depends on the judicial system and procedural compliance.
Practical Examples
- Unpaid Loan: A bank has a chose in action against a borrower for the recovery of unpaid loan amounts.
- Breach of Contract: A contractor has a chose in action against a client for non-payment of services rendered.
- Insurance Claim: A policyholder holds a chose in action against an insurance company for the payout of a legitimate claim.
- Chose in Possession: Refers to tangible assets that one physically possesses, such as cash or equipment.
- Judgment Debt: A debt confirmed by court judgment, converting it from a chose in action to a chose in possession.
FAQs
Can a chose in action be sold or assigned to another party?
Yes, a chose in action can generally be assigned or sold to another entity, who then has the right to enforce the claim.
What are the most common types of choses in action?
The most common types include claims arising from contracts, torts, and equitable actions.
How does a chose in action become a chose in possession?
A chose in action becomes a chose in possession upon successful litigation or settlement, leading to actual recovery or possession of the claimed asset.