This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

The Rules of Constructive Delivery

The following is a transcript of " The Legal Lad's Quick and Dirty Tips for a More Lawful Life, " a podcast from QuickAndDirtyTips.com . The audio program is available via RSS feed here and at TheStreet.com's podcast home page .

Hello, and welcome to Legal Lad's Quick and Dirty Tips for a More Lawful Life.

But first, a disclaimer: Although I am an attorney, the legal information in this podcast is not intended to be a substitute for seeking personalized legal advice from an attorney licensed to practice in your jurisdiction. Further, I do not intend to create an attorney-client relationship with any listener.

Today's topic is constructive delivery. Maria wrote:

Last week, I signed up with a rental agency to help me find an apartment. I found a great place and told the rental agent that I wanted it. The agency approved me, and gave me the lease to sign, which I did. I gave the lease back to the agency to get the owner to sign. The owner signed it and gave it back to the rental agency, but the agency never gave it back to me. The bottom of the lease said that the lease was not effective until the signed lease was "delivered" to me by the owner, and that the owner could still find other renters between the time he signed it and "delivered" it.

After he signed the lease, the owner found a family friend that wanted to live in the apartment, and told the agency not to give the lease to me. Now, he will not honor my lease because the rental agency never gave the signed lease back to me. The owner says that he never "delivered" the lease because he only gave it back to the rental agency, but not to me. Is this fair?

Maria has effectively asked whether the act of handing the signed lease back to the rental agency constitutes "delivery" under the law. The short answer to your question is that what the owner is doing is not only unfair, but violates the terms of the contract. When the owner signed the lease and gave it back to the rental agent for the purpose of giving it back to you, the owner delivered the lease and the contract became binding on both of you.

Delivery of documents under the law can be either actual or constructive. Actual delivery is easy to spot; it occurs when someone physically hands you a document with the intent to hand it over. So, if the owner had signed the lease and handed it back to Maria, then actual delivery would have taken place, and the lease would have become immediately effective.

But under the law of most states, delivery is not confined to physically handing something over. Rather, delivery is a question of intent. Constructive delivery occurs when a person shows a present intent to unconditionally divest himself of his property, and to relinquish all control over it. When the owner signed the document and gave it to the rental agency with the intent that the agency would pass it along to Maria, the owner constructively delivered the leasehold interest to Maria.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $124.24 0.70%
FB $83.01 0.11%
GOOG $555.17 -0.65%
TSLA $190.40 -2.00%
YHOO $44.64 1.00%

Markets

DOW 17,678.23 -40.31 -0.23%
S&P 500 2,056.15 -4.90 -0.24%
NASDAQ 4,863.3620 -13.1570 -0.27%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs