The Law of Trusts Case Study Example | Topics and Well Written Essays - 3000 words

The Law of Trusts - Case Study ExampleIn 2004 Brian entered into a covenant under a trust work with his children Pat and Richard. Pat and Richard can execute against Brian at law for damages to compensate Pat and Richard for their loss of expectation if Brian does not arrange his promise. In Cannon v Harley1 a father promised his daughter by deed that he would pay her any sum exceeding 1,000 which he legitimate under his own fathers will. When he failed to do so, she successfully sued him at law for the amount she would have obtained had his promise been per jumped. It is important to note, however, that the same promise was not enforceable in equity. Equity will enforce promises made for consideration, but not ones whose only claim to enforcement is that they are contained in a deed. None of the position referred to in the 2004 covenant has been transferred to Pat and Richard. Brian appointed Tony and Nathan as his executors and trustees under his will. Now the question arises who can enforce the covenant. If the Contract (Rights of Third Parties) Act 1999 were to apply to covenants (which is doubtful) then anticipate the requirements of the Act were satisfied, Pat and Richard would be able to enforce the covenant at law and obtain damages for lost expectation. It can be argued that they hold the get ahead of the right to sue on the covenant on trust for Pat and Richard. If this cause, the trust of the covenant argument, can be made out, then Pat and Richard can compel Tony and Nathan to sue Brain. The assumption is that Tony and Nathan would recover substantial damages, which they would then hold on trust for Pat and Richard. There are three difficulties, which stand in the way of this argument succeeding. To be a valid trust, it is necessary three certainties, formalities, and perfect constitution. A trust will be perfectly constituted where the rights, which are to form the sphere matter of the trust, are vested in the intended trustee. The princip le laid down in the case Milroy v Lord2, Lord Turner LJ explained three ways of benefiting trio parties. The easiest way to benefit the third party is by an outright gift. If the Beneficiary is minor and a gift is a real property then it is not possible. In this situation, he needs to create a trust or declare himself as a trustee. The transfer to the trustees must accord with the rules applicable to the property concerned. Legal estates in land must transferee by deed, equitable interest, and copyright by writing (which may include an electronic document), chattels by deed of gift or by an intention to give coupled with a delivery of possessions, a bill of exchange by endorsement, and shares by the appropriate form of transfer followed by registration. The traditional approach also adopted in subsequent cases like Re Fry3, required all stage should be completed. However, if the settlor wants to get a trustee himself he must declare it in clear and unequivocal terms, which carry o ut mans intention.