The authoress describes different theories on how the 'encumbrance on the asset' should be interpreted and the impact of these interpretations on the application of law. Historically, there were two approaches in a legal doctrine and jurisprudence in Poland. One of them, originating from the theory of legal acts, used to treat 'encumbrance on the asset' as a sub-category of 'disposal' with the asset. Both disposal and encumbrance lead to establishing a right of a third party which is effective 'erga omnes'. As a consequence, the encumbrance should cover so called real rights (rights in rem), as opposed to personal rights (rights in personam). The other approach attempts to associate the word 'encumbrance' with a restriction that may be suffered by the owner of an asset due to any right of a third party, except of the limitations based on public law. As a consequence, the rights resulting from lease or rent should also be considered as an encumbrance. Recent decisions of the Supreme Court seem to go much further. They are not based on the theory of legal acts but look at the function of the provision of law. If the function is to protect one's interest in given circumstances, any right of a third party or liability against a third party that contradicts this function may be considered as an encumbrance. As an example, in case of acquisition of an enterprise the purchaser is jointly liable with the seller by virtue of the law for the debts that have arosen before such acquisition and such a liability can be considered as a legal defect (encumbrance on the enterprise).
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