1. Equity and Trusts * Equity is a particular body of law, consisting of rights and remedies, which evolved historically through the Courts of Chancery to mitigate the severity of the common law. * The trust has been characterised as the greatest and most distinctive achievement in equity although an exact definition of the trust has proven difficult. * Equity would recognise and enforce rights and duties that were not known to the common law. * E.g. the common law protects the trustee’s legal interest in the property, thus facilitating their dealings with 3rd parties, but if the beneficiaries of the trust wanted to enforce their rights, equity will provide equitable proprietary interest.
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* If obligation in essence was to create other stuff, then those will arise notwithstanding clarity to create trust. agency * Function is for agent to represent the principal in dealings with 3rd parties (c.f. trustees do not bring beneficiaries into any relationship with any 3rd parties). * Agency relationship is normally contractual (c.f. trust relationship is rarely contractual; it is exclusively equitable). * The trust relationship is fiduciary, and while the principal-agent relationship is normally fiduciary, it is not inevitably so. * Trustees and agents cannot delegate their duties and also cannot make unauthorised profits. Differences | Agency | Trust | Representation | Agent represents principal in transaction. * Validity due to authorisation. * 3P must know that agent is acting for the principal. * 3P’s action is against the principal. | Trustee represents himself in transaction. * No authorisation or consent required for valid transaction. * 3P need not know existence of the trust. * 3P’s right is protected already since he is Equity’s Darling. | Power to bind | Agent binds principal into relationship with 3P. | Trustee does not bind beneficiary to direct legal relationship with 3P. | Hold property | Agent does not usually hold property. | Trustee holds legal ownership of the property, beneficiary holds equitable. | Rights of principal/trustee | Principal holds personal right against agent. |