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.
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.
- 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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