Abandonment

Business, Legal & Accounting Glossary

Definition: Abandonment


Abandonment

Quick Summary of Abandonment


The act of abandoning something or someone. Abandonment is when an owner gives up all rights to an asset. This term can be used to describe the voluntary non-renewal of a patent or trademark, or the loss of rights to an asset when the owner can no longer be found.




What is the dictionary definition of Abandonment?

Dictionary Definition


n. The act of intentionally surrendering one’s claim to, right to, or interest in property, premises, contract rights, a spouse and/or children.

When a spouse is abandoned, it is assumed that the intent was for permanent separation.

Confusion may arise when rights over water, mining, and rights of way are abandoned because it is sufficient to show non-use to qualify as abandonment.

  1. Voluntary disclaim of a right or interest (without transferring it to anyone else) in a property, accompanied by a clear act of abandoning that property. Such acts include continuous lack of use and/or maintenance, and failure to pay property taxes. The abandoned property may then be claimed by an occupier (see adverse possession) or may be appropriated by the state. However, obligations (debts, liens, taxes) associated with a property are not discharged when it is abandoned and remain the liability of the owner.
  2. Donation or voluntary disposal of a business asset where it is cheaper to abandon the asset than to restore or salvage it. The book value of an abandoned asset is written off as a loss.
  3. Expiration of an option instead of its exercise or sale.
  4. Right of the owner of insured property to abandon it
    1. where its loss cannot be avoided (called actual total loss), or
    2. where the cost of repairing the damage exceeds its value (called constructive total loss). The insured party can still claim full settlement from the insurer (who becomes the owner of the abandoned property), after serving the notice of abandonment subject to the conditions of the insurance policy. Most non-marine insurance policies (such as homeowners insurance policy), however, specifically prohibit abandonment of the insured property under any circumstance.

Full Definition of Abandonment


This refers to the act of giving up the ownership of something covered by an insurance policy and treating it as if it has been completely lost or destroyed. If the insurers agree to abandonment, they will pay a total loss claim.

This often occurs in Marine Insurance if a vessel has run aground in treacherous waters and the cost of recovering said vessel would be greater than the cost of the vessel and all its cargo.

Abandonment is a viable option in such an instance as it’s simply not financially viable to try and recover the vessel.

Abandonment also occurs during Wartime; when a vessel is captured by the enemy.

If the owner wishes to declare a vessel (including its cargo) a total loss, then a notice of abandonment is given to the Insurer.

If subsequently, the vessel and/or its cargo are recovered at a later date, they then become the property of the insurer.

Property That Can Be Abandoned

Various types of personal property—such as personal and household items—contracts, copyrights, inventions, and patents can be abandoned. Certain rights and interests in real property, such as easements and leases, may also be abandoned. Suppose a ranch owner, for example, gives a shepherd an easement to use a path on her property so that the sheep can get to a watering hole. The shepherd later sells his flock and moves out of the state, never intending to return. This conduct demonstrates that the shepherd has abandoned the easement since he stopped using the path and intends never to use it again. Ownership of real property cannot be obtained because someone else abandoned it but may be gained through adverse possession.

Elements of Abandonment

Two things must occur for property to be abandoned: (1) an act by the owner that clearly shows that he or she has given up rights to the property; and (2) an intention that demonstrates that the owner has knowingly relinquished control over it.

Some clear action must be taken to indicate that the owner no longer wants his or her property. Any act is sufficient as long as the property is left free and open to anyone who comes along to claim it. Inaction—that is, failure to do something with the property or nonuse of it—is not enough to demonstrate that the owner has relinquished rights to the property, even if such nonuse has gone on for a number of years. A farmer’s failure to cultivate his or her land or a quarry owner’s failure to take stone from his or her quarry, for example, does not mean that either person has abandoned interest in the property.

A person’s intention to abandon his or her property may be established by express language to that effect or it may be implied from the circumstances surrounding the owner’s treatment of the property, such as leaving it unguarded in a place easily accessible to the public. The passage of time, although not an element of abandonment, may illustrate a person’s intention to abandon his or her property.

Parental Abandonment of Children

Parental abandonment of children is different from other cases of abandonment in that it involves a person rather than property. Abandonment of children is a criminal cause of action under most state laws. In the civil context, it arises when a court decides to terminate the natural rights of the parent on the grounds of abandonment to allow adoption.

In a criminal context, abandonment of children is defined as actually abandoning a child, or failing to provide necessities of living to a child. In California, for example, a parent is guilty of abandonment if they fail to provide “necessary clothing, food, shelter or medical attendance, or other remedial care for their child.” A parent is required to accept their minor child into their home or provide alternative shelter. Parents in California are also punished for “desertion with intent to abandon.” These laws are typical of most states.

In the late 1990s, the issue of baby abandonment in the United States came to a head as a result of several high-profile cases. These cases prompted 38 states to pass so-called “safe haven laws.” The laws decriminalize baby abandonment by allowing mothers to leave their unharmed babies at a designated “safe.” location such as a hospital, fire station, or licensed child-placing agency. The laws include a time frame, beginning from the baby’s birth, in which abandonment may take place; the time frame varies from state to state, ranging from 72 hours up to one year.

In a civil context, abandonment of a child is usually ruled on by a court to facilitate an adoption. State courts employ various guidelines to determine if a child has been abandoned. In an action for adoption on the ground of abandonment, the petitioner generally must establish conduct by the child’s natural parent or parents that shows neglect or disregard of parental duties, obligations, or responsibilities. They must also show an intent by the child’s parent or parents to permanently avoid parental duties, obligations, or responsibilities. Some jurisdictions require an actual intention of the parents to relinquish their rights to find abandonment, but most allow a finding of abandonment regardless of whether the parents intended to extinguish their rights to the child.

 

 


Synonyms For Abandonment


surrender, abandon, renunciation, relinquishment, resignation


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Definition Sources


Definitions for Abandonment are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 8th October, 2021 | 33 Views.