Imagine waking up first thing in the morning and heading over to your coffee pot. Despite being half awake, you know that as soon as your press that ‘Start’ button, it will begin the operation of heating the water and flowing the hot water through the coffee grounds to make your morning beverage. This is a great example of operations: the machine follows a set of commands to achieve its goal.
Most people are familiar with this type of operations that also occurs automatically on computers in exactly the same way as the coffee pot: you press a button and operations are followed automatically without you having to do anything. The way your computer turns itself on when you press the power button, how the computer goes through a series of checks before it shuts off or how the computer completes updates while you are sleeping, all represent simple operations that take place without you having to do anything.
So how do ‘operations’ occur in Operation of Law?
Operation of law follows a similar pattern, it is a legal step that occurs without you having to take any action.
What is Operation of Law?
Operation of law covers the aspects of law that are provided automatically. For instance, rights and responsibilities can be given or placed upon a certain person by default based.
Operation of law definition
According to Cornell Law School, operation of law is defined as a way in which a person receives rights or responsibilities automatically in accordance with the law, without having to do anything. However, those rights or responsibilities provided to someone require cooperation from another person or are subject to a court order.
For instance, when you hire an attorney, you will likely see the phrase “operation of law” in your power of attorney documents. This is quite common and is an addition included by attorneys at the end of a power of attorney document stipulating when or if the power of attorney expires. For instance, they might stipulate that they are the attorney for Michael (the client) and all of their power shall remain in effect unless Michael revokes the power of attorney, or the power of attorney expires by operation of law.
What does the Operation of law mean for you?
In its most simple terms, the operation of law means that someone can be liable for certain obligations or acquire certain rights because of existing legal rules, regardless of what their intentions are or what they want to do. The operation of law can also impose prohibitions or restrictions on someone, determining what they can or cannot do.
For example: If John passes away without a will, his heirs will be determined through operation of law. The operation of a law states that if he has no surviving spouse, but has a surviving child, that child will inherit everything that John has, regardless of whether that child wanted to inherit his assets. This child would now be responsible for dealing with the entire estate, liquidating assets, and dividing belongings as he sees fit among John’s grandchildren, a responsibility he might not want but is now legally responsible for.
Operation of law can also apply to things like patents. For instance, the title to a patent can be transferred or given through a financial transaction when one company merges with another. However, if a company that owns patent files for bankruptcy, the ownership of that patent after the company has liquidated their assets is based on the operation of law of the state. The law will determine who now owns the patent.
What is operation of law in real estate?
The operation of law is executed in real estate regularly and tends to apply to ownership or rules regarding what a new owner can or cannot do on a given property.
The transfer of real estate, or the way an asset or title is transferred, is a common area for operation of law. For instance, joint tenants with the right of survivorship refers to situations where two people own a property and in the event that one of them passes away, the surviving person by way of operation of law becomes the full owner.
For example: Linda and her sister Anna take care of their mother who lives in a nursing home. Their mother owns multiple pieces of property. When their mother dies, with the right of survivorship, Linda and her sister Anna become joint tenants of one of the homes their mother owned. A year later, Anna dies. Now, Linda will acquire the full title to the property by operation of law, even if she had no intention of owning it. This property is an example of one joint tenant, a tricky legal situation after a person dies.
In the example above, despite not having any interest in owning the property herself, Linda is now the sole owner. The law followed an automatic set of operations which now put Linda in charge of the property.
Tenants in common is another example of operation of law in real estate. In this situation, a property is held by two people and in the event that one of them dies, their share of the property is transferred to their estate. If this were the case for Linda and her sister Anna, Anna’s half of the property would go to her estate when she passes away instead of going directly to Linda.
How does termination occur by operation of law?
Operation of law can also impact the responsibilities or the obligations of different parties to an agency contract. For instance, termination of agency by way of operation of law can occur when parties provide for termination, when there is a defined cause, or when the agent’s performance has been executed.
For example: Mary and Katie enter a contract to sell Katie’s car to Mary for the price of $1,000. After they sign the contract, the operation of law dictates that these two individuals are contractually bound to follow through with the responsibilities and obligations put on them: purchasing the car and selling the car. The sale goes through, the car is registered to Mary and Katie has the $1,000 in her account. At this point, the performance has been executed and the contract has been fulfilled, meaning that the contract is terminated. Operation of law dictates that both Mary and Katie have fulfilled the requirements and are no longer held legally responsible to any type of obligation.
However, if a contract cannot be enforced then operation of law will terminate that contract. This can include situations where one or more of the parties involved in the contract were not of sound mind, they were not of legal age, or they were under the influence of drugs or alcohol. Furthermore, if one party was threatened or forced to enter into a contract, the operation of law, assuming this can be proven, can terminate the requirements or responsibilities associated with the contract.
Returning to the example above with Mary and Katie, if there is a fire at Katie’s house after the contract was signed but before Mary could purchase the car, and the car burned down, there would no longer be a car to sell and the operation of law would dictate that the contract be terminated because neither Katie nor Mary were at fault or rescinded on their responsibilities.
What does discharge by operation of law indicate?
A similar legal concept is discharge by way of operation of law. While termination by operation of law means the responsibilities or requirements are now terminated because the contract is terminated, discharge indicates that an individual or party is freed or liberated from different obligations in a situation that differs from any of those mentioned above.
The most common example of this is when someone files for bankruptcy. When someone files for bankruptcy, any debt they have is discharged by operation of law. This means that the contract to repay the money was not fulfilled or terminated, but rather, the person is no longer legally required to pay their creditors. In short the debt has been discharged by operation of law.
The legal definition for operation of law can have many iterations as it applies to different scenarios. If you are worried about your legal rights, or things like adverse possession or a legal obligation you might have due to operation of law, you should consider reaching out to a qualified attorney. An attorney will better understand and be able to counsel you on the legal rules and fees associated with situations such as reasonable notice, the act you must follow based on the operation of law, and what to do with different assets that fall under the operation of law.