Final answer:
The second legal test, 'Relationship of the Parties,' helps determine the difference between real and personal property by examining ownership and relationships. Real property refers to land and attached structures, while personal property refers to movable assets. The test looks at who owns the property and how it is used.
Step-by-step explanation:
The second legal test, 'Relationship of the Parties,' helps determine the difference between real and personal property by examining the nature of the ownership and the relationships between the parties involved.
Real property refers to land and anything attached to it, such as buildings, while personal property refers to movable assets, like furniture or vehicles. The 'Relationship of the Parties' test examines whether the property is owned by an individual or a firm, as well as how the property is used or entered into contracts with others.
For example, if a person owns a house and uses it as their primary residence, it would be considered real property. On the other hand, if a person owns a car, which is a movable asset, it would be considered personal property.