Case law: A party to a contract cannot hold onto 'intangible property' even if owed money when it ends
Owners of intangible property, such as a database, who provide that property to others in order for them to carry out work under a contract can demand its return when the contract ends, even if the other side claims it is owed money under the contractual terms.
Legal Alert
This update was published in Legal Alert - February 2015
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The Court of Appeal ruled that it could not do this. While a party could have a possessory lien over physical or 'tangible' property (such as materials, plant or machinery) in those circumstances, a database was 'intangible' property and it was not possible for a party to a contract to claim a possessory lien over intangible property.
Operative date
- Now
Recommendations
- Owners of intangible property, such as databases, who provide that property to others in order for them to carry out work under a contract, can demand the return of that property when the contract ends, even if there is a dispute.
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