Thing in action

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The Jolly Contrarian’s Glossary

The snippy guide to financial services lingo.™

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A thing in action — in kinder days known as a chose in action — is an intangible right that only the law can see — that you wouldn’t think existed at all but for the fact you can sue on it — and is to be contrasted with to something even a non-lawyer can stub her toe on.

  • Things you can stub your toe on: pavements, rocks, watches you stumble upon by the sea when taking an after-dinner stroll; also, the more mundane and, alas for our purposes, germane, bearer securities and other financial instruments to which title passes by delivery. Other than, amusingly, cash, which like Ford Fairlane’s love, cannot be held.
  • Things in action: Guarantees; indemnities; claims for compensation for wrongdoing which would be entertained by a well-directed member of the judiciary. You know: things which you can’t stub your toe on, but which can nonetheless trip you up.

Things in action count as property for the purposes of the Law of Property (Miscellaneous Provisions) Act 1994, and expressions like full title guarantee.

Which is nice.

Lex situs for a chose in action like an assignment by way of security

Where the thing you are taking security over is a disembodied legal right — a “chose in action” and not a “chose in possession” — then what is the lex situs, seeing as this thing floats free of the ghastly, rusting mortal world of territorial boundaries? It is a Platonic right, and ethereal, idealised, utopian thing and as such as stateless, existing as it does on another plane, in another geometry, that that of tawdry earthly things like regulatory perimeters.

Here the lex situs is — in the absence of any other worldly place for it — the governing law of the right being assigned.

See also