The Rule Against Perpetuities

Most important rule favoring alienability. More broadly applicable than the other rules and still survives in most jurisdictions.

The rule only applies to these types of interests:

1. Contingent Remainders

2. Executory Interests

3. Vested Remainders in Open Class

4. Option and similar contracts.

The rule does not apply to:

• Future interests created in the grantor (reversions, possibilities of reverter, rights of entry)

• Vested interests not in an open class created in the grantee (Indefeasibly vested remainders, vested remainders subject to divestment)

Classic rule statement (with insertions): No interest [subject to the Rule] is good unless it must vest [in a closed class], if at all, no later than 21 years after some life in being at the creation o ...