The property-contract boundary: an economic analysis of leases

This paper examines how the legal design of a leasing arrangementaffects the value of the leased asset. The model focuses onthe incentive problems that arise when the ownership and useof an asset are separated. The results suggest that an efficientlydesigned lease may involve elements of property law, contractlaw, or both. This conclusion helps explain why the law of leaseshas historically occupied the nexus between these two areasof the common law.