It’s a well known rule that if an Academy Award winner wants to dispose of his/her statuette, s/he must first offer it back to the AMPAS for $1. I also read on a website that this also applies to the winner’s heirs.
I don’t know if the last stipulation is true or not. Assuming, however, that it is true, is it really legally enforceable? Can my kids be prevented from selling something that is their property because I signed a deal?
I realize that the answers may vary from state-to-state and from jurisdiction-to-jurisdiction. However, I’m curious if, in general, this sort of thing is legally enforceable?
Probably enforceable. You cannot bequeath what you do not own; or, put another way, your heirs cannot inherit from you anything that you yourself did not own. If your ownership was not absolute, but was subject to a condition, then your heirs likewise inherit subject to the condition. The party entitled to enforce the condition also holds an interest in the property, which your demise does not deprive them of.
Not being a lawer I could’nt say for sure but, I would imagine something like the Grammy award is a Trademark type of thing… and to sell it you would need the people that issue its permession and thier only going to give you permission to sell it to them for a Buck!
The Academy doesn’t own the statuette. But the Academy evidently does own an interest in the statuette that encumbers the owner’s right to dispose of it. The statuette’s winner (or the winner’s heir who inherited the statuette) does own it, but that ownership is not absolute–it is subject to the Academy’s interest. Assuming the facts in the OP as true, the winner’s death would not extinguish that interest.
From what I understand (and I may be factually inaccurate about this [are you out there Eve?]), the requirement only began in 1950, so the Oscars out there are older than that (such as the Bette Davis Oscar that Steven Speilberg bought and donated to the AMPAS.
RiverRunner, you are probably thinking of the Rule Against Perpetuities, a common-law rule (now codified in many jurisdictions) which says that an interest in land must vest within a certain time, usually within 21 years after the death of someone now alive. But that rule doesn’t apply here for several reasons.
First, the rule generally applies only to realty, not to personalty.
Second, the rule generally limits only when an interest vests, not how long that interest can last. Once the interest vests, it can last forever. For example, if my will says that I leave my home to my son but, 30 years after he dies, the home goes to the city for use as a museum, then that provision is invalid because it violates the rule–my dead hand cannot control what happens to the property that far out. But if my will says that I leave my home to my son and my daughter jointly, and that neither can sell the property unless both agree, then my son and daughter and their heirs will own the property jointly forever, and two centuries from now neither my son’s heirs nor my daughter’s heirs can force a sale of the entire property without the other side’s consent (although they may be able to sell their own partial interest in the property).
Third, the rule affects only an interest being conveyed, and limits the conditions that can encumber the conveyance. It does not invalidate an existing interest that has already vested.
The key word is “forever.” And this is the Rule Against Perpetuity, which means that you cannot devise or bequeath something to people who are not now alive and only will be beyond the years totaling the lives in being plus 21 years, IIRC. brianmelendez will correct me if I don’t remember correctly.
However, your example does not qualify. Covenants and restrictions on real estate run with the land. You certainly can devise land to your nephew with that restriction, and that restriction will run with the land (will bind your nephew’s successors and assigns).
But this has nothing to do with the OP. The Academy can certain place any restrictions (within reason) on any gift it makes.
Robb’s link provides a good summary of the rule and its application in various circumstances. The only way to really understand the RAP is to apply it to various situations – every lawyer will recall not-so-fondly the application of the Rule to scenarios like the Fertile Octagenarian and the Unborn Widow.
Note some key points:
The rule applies to when an interest vests, i.e., when does the interest holder have a right to future possession. This is important. A contingent remainder (e.g., “I give X to you if Y happens”) does not vest until the occurrence of the contingency. An executory interest (e.g., “I give X to Bob, but if Y happens then X goes to you”) does not vest until it is certain to become possessory (e.g., when Y occurs, triggering your executory interest).
The time period starts running at the creation of the interest. Thus, for a gift or sale, the clock starts running at the time of the gift/sale. For a provision in a will, the clock doesn’t start running until the testator dies.
The rule does not apply to reversionary interests (i.e., when, upon failure of a given condition, the gift reverts back to the grantor), outside of some narrow exceptions. Thus, “Blackacre to X so long as the property is used as a church” is valid – the property will revert to the grantor upon failure of the condition – but “Blackacre to X so long as the property is used as a church, then to Y” is invalid.
But as noted, the Rule does not apply in this case. The Rule only applies to the creation of interests. It is not clear that the Acadamy retains an interest over the statue – that is, it does not appear that title to the statute would immediately revert back to the Academy if they are not permitted to exercise their right of first refusal. And even if it did, the Academy is the grantor, so the interest would be a reversionary interest – the Rule would not apply in any event.
The Academy would probably seek contractual damages for the breach of this condition of their agreement with the award winner.
True only in some jurisdictions, which have enacted statutory versions that extend the common-law rule. But the original rule was concerned with land, and modern cases and commentators still recognize the Rule in terms of real property (emphasis in each quotation added):
The National Conference of Commissioners on Uniform State Laws has adopted a Uniform Statutory Rule Against Perpetuities, which extends the common-law rule to both real and personal property. Most jurisdictions in the United States have adopted the Uniform Statutory Rule. So Dewey Cheatem Undhow is right that the Rule Against Perpetuities does apply, in most jurisdictions, to property other than realty. But some jurisdictions still do limit the rule to realty, so YMMV.
What about approaching the problem as a matter of contract law? Couldn’t the Academy make it a condition of being considered for the Oscar that all candidates sign a contract in advance, giving the Academy thr right of first refusal to purchase the statuette? Unless the individual signs the contract, they’re not eligible for the prize.
Their would be consideration flowing both ways: Academy will consider the individual for the prize, the individual agrees to a right of first refusal. Since it’s contract, not property, the Rule against Perpetuities wouldn’t apply.
And, to get back to zev’s point, a contract can include a clause that states the contract bind one’s heirs and assigns.
This is the mother of all nitpicks, but this isn’t true. The historical rule applied to any transfer of property, real or otherwise. It’s almost always discussed in terms of real property because back in the day that was the only kind of significant property that was likely to have value over a lengthy time horizon (yes, you are correct that alienability of land was the principal concern behind the creation of the rule).
That is not true today, and has not been true for some time. The most obvious such non-realty but long-lasting interest is stock ownership, though there are others. And I guaran-damn-tee you that any estate planner worth his or her salt insures that all bequests – not just those involving land – comply with the Rule, because if the will is probated in a state that has not statutorily narrowed the Rule to realty, a noncompliant bequest would fail.
This even arises in corporate practice – in a purchase agreement with a contingent interest, I’ve seen agreements with what amount to RAP-saving clauses, essentially cutting short such interests on the basis of some named life (usually some well-known, very large family; the Rockefellers and Kennedys were popular at one time, and I suspect the Bushes might be appearing in such agreements today).
Oh, and the Uniform Stautory Rule Against Perpetuities – adopted in 29 states, as per the the NCCUSL – does not change the original rule from realty-only to realty-and-personalty. Indeed, the purpose of the USRAP is to make the Rule less stringent by adopting a “wait and see” approach to perpetuities invalidation. If the original common-law Rule did not apply to personalty, then applying the rule to it at this late date would seve little purpose, and indeed would contradict the stated goal of the USRAP to make the Rule less harsh in its application.
Conditions providing for reverters are not subject to the rule, so there is no need to try to avert it by contracts. If reverters were subject to the rule, covenants and restrictions, if containing reversionary rights, contained in deeds would be invalid since theoretically they can last forever. As it stands now, the heirs or devisees of a grantor who died 100 years ago, or 200 years ago, has the right to enforce any conditions subsequent in deeds.
I do believe that options and rights of first refusal are generally subject to the rule against perpetuities.
I worked on a case a few years ago where the a third party held a right of first refusal that was supposed to have been good for 75 years. We convinced everyone that it was invalid under the rule against perpetuities.
The problem is that there is no privity of contract between the academy and the award-winner’s heirs. Since there is no direct contract between those two parties, arguably there can be no contractual rights.
I wonder if the academy can get around the property issues by retaining title to the statutette and merely transferring a license to the award-winner?