Also known as: tangible property · intangible property · tangible vs intangible · tangible/intangible · tangible property distinction
Written by attorneys · grounded in primary & secondary sources — see below
A classification separating property or assets into physical items that can be touched and perceived by the senses and nonphysical items such as rights, interests, information, or services.
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TechVista Solutions' board meets and authorizes new shares to Tanner Thompson in exchange for his agreement to provide ongoing software development services. The board determines the services constitute adequate consideration. Thompson receives the shares and begins work. Because the statute permits issuance for intangible benefits, the shares are validly issued, fully paid, and nonassessable once the services begin.
Tori Taylor buys a refrigerator from Thunderbolt Motors. A defective defrost timer causes a fire that damages her kitchen. She sues under strict products liability and breach of warranty. The jury finds the timer itself was not defective but still concludes the refrigerator was unfit for its ordinary purpose. The distinction between the tangible appliance and any intangible design elements allows the warranty claim to proceed independently.
The distinction permits the board to accept any tangible or intangible property or benefit, including cash, promissory notes, services performed, contracts for future services, or other securities. The board's determination of adequacy is conclusive on whether shares are validly issued, fully paid, and nonassessable.
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A devise of a house and its contents passes tangible personal property that makes the dwelling habitable, such as furniture and decorations. Intangible property or financial instruments located in the house, such as stock certificates or bank passbooks, do not pass under the clause.
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