Rule Against Restraints on Alienation

Question 1

what is the general rule against restraints on alienation?

Answer 1

any restriction on the transferability of a legal interest is void

Question 2

what are the three types of restraints on alienation?

Answer 2

1) disabling restraints (“to A as long as he promises never to sell”)
2) forfeiture restraints (transfer forfeits interest)
3) promissory restraints (transfer breaches covenant)

Question 3

what types of restraint on alienation are absolutely banned?

Answer 3

disabling restraints and discriminatory restraints

Question 4

what types of restraints may be valid if they are for a limited time and reasonable purpose?

Answer 4

forfeiture and promissory restraints

Question 5

what kinds of restraints on fee simples are void?

Answer 5

absolute restraints

Question 6

what kinds of restraints on fee simples may be allowed?

Answer 6

partial restraints

Question 7

what kinds of restraints are allowed on life estates?

Answer 7

only forfeiture and promissory restraints (not disabling)

Question 8

to what extent are restraints on vested future interests valid?

Answer 8

to the extent that restraints on the present interests of the same type are valid
**EXAMPLE = vested remainders for life can have promissory/forfeiture restraints but not disabling restraints

Question 9

what are valid restraints on alienation? (3)

Answer 9

1) reasonable restrictions in commercial transactions
2) reasonable options and rights of first refusal
3) restrictions on assignment and sublease of leaseholds (ie– requiring landlord’s consent)