concerns that property law might be undermining the rule of law. Is property the poster
child for the rule of law or a Trojan horse of arbitrariness. Which is it?
Surprisingly, both, and in a surprising way. This paper will argue that private law,
and property in particular, exemplifies the rule of law on two scales, partly for reasons of
information cost. On a micro level, property itself implements the rule of law, which
reduces the information costs of coordinating the actions of large and indefinite sets of
persons with respect to things. Property is at its core in rem. Especially where it sets up
in rem rights and duties, it needs to be general, stable, and give proper notice on the
widest possible basis – the familiar formal rule-of-law criteria.1 Property law must
satisfy these criteria because it must manage information: facilitating coordination on this
scale requires simplicity and a degree of formalism precisely because the audience is in
rem. Furthermore, in order to serve this coordinating function property must draw on a
simple type of everyday morality against stealing and other forms of gross violation.
But property cannot stop there. Property governs both the relations of people in
general and in a variety of more personal interactions. Some of these interactions can be
formulated somewhat generally, as in the law of nuisance or in zoning. But at the most
particularist end of the spectrum of property doctrines are those dealing with individual
behavior and whether it was done in good faith or with notice. Many of these doctrines
trace back to the jurisdiction of the equity courts.
Equity protects the formal part of property that is congenial to rule of law
proponents, or so I argue. The simple structures of the law are open to exploitation by
opportunists. Formal law provides information about where the line exactly is, and
evaders can use this information to take unforeseen advantage of the gap between the
law’s purpose and its literal terms. In order to prevent this opportunism, the law must
employ a different set of moral standards that sound in anti-deception and anti-evasion.
In previous work, I have argued that the equitable decision making mode can serve this
function of protecting the law against opportunistic evasion.2 Interestingly, next to the
tradition of legal rules and their formality and certainty there has always coexisted the
notion of equity, which itself can be explained as largely directed at the problem of
opportunism. Actual historical equity has been subjected to a number of different
interpretations. It is commonly thought that the purpose of equity is to soften or modify
the law when it fails owing to its generality. Here particularism and discretion hold sway,
because of the inherent difficulty of answering a host of questions before events as they
occur. I will show that a constrained version of equity that focuses on opportunism does
not undermine, but rather strengthens the formal law – and the rule of law that it
implements. Situations of fraud, accident, and mistake – the traditional domain of equity