1

I'm asking just about reason 2 below here. I don't understand the emboldened sentence. If "anybody who becomes a trustee must consent to" the trusteeship, how's it impossible to imply or "deduce from this any contract between the testator and trustee"?

Apprise me if you'd like to delete reason 1, but I'm erring on the side of more context.

But, despite the significance of the trust in modern commercial life, the trust is still relevant in other contexts, such as within the family, where such agreement and negotiation are less likely to take place. But even in commerce, to describe the trust as a bargain can be highly misleading as regards its components and characteristics, which cannot necessarily be regarded as contractual for the following reasons:

(1) The typical trust structure involves a settlor transferring property to the trustee to hold on trust for the beneficiary. Any bargain that establishes the trust will be between the settlor and the trustee. But, once the trust has been created, the settlor has no rights to enforce the bargain and usually has no rights relating to the trust, except where they have reserved for themselves a power to revoke the trust,15 to appoint trustees, to direct investment by the trustees,16 or to amend the trust. Enforcement of the trust is left to the beneficiaries who were not parties to the bargain and who are volunteers, since they will not usually have provided any consideration in respect of the creation of the trust.17 Although third parties to a contract can now enforce rights arising under the contract in certain circumstances by virtue of statute,18 beneficiaries had been able to enforce their rights under the trust long before this statute was enacted.

(2) A testator may create a trust under their will that becomes effective only on their death. The person who is appointed as trustee of such a trust cannot usually be regarded as having entered into any contract with the testator. Whilst it is true that the trustee is not obliged to accept the office, so that anybody who becomes a trustee must consent to do so, it is not possible to deduce from this any contract between the testator and trustee.

16 Choithram International SA v Pagarani [2002] 1 WLR 1, 11.
16 Vestey’s Executors v IRC [1949] 1 All ER 1108.
17 See Section 5.3.2.(ii), p. 137.
18 Contracts (Rights of Third Parties) Act 1999.

Virgo, The Principles of Equity & Trusts 2020 4th edn. Page 42.

2 Answers 2

2

Everything Virgo has written in this passage is correct but the position of the various statements is slightly odd.

Essentially much the same arguments as to why the relationship between the settlor and the trustee is not the main ongoing legal relationship apply to both (1) and (2).

In (1) there could be some kind of contract between settlor and trustee although it is not normally the main focus of legal attention.

In (2) there cannot be a contract between the testator and the trustee because at the point when the trust comes into existence the testator is dead.

Perhaps the reason why the words in bold are placed only under (2) is that although the general principle is that you should not read too much (in terms of contract) into the fact that a trustee has to agree to be a trustee, the position is more clear cut in case (2) because a contract is impossible in that case.

1

Because a will is unilateral

The testator does not have to ask or even advise the prospective executor. A contract requires consent- how can consent be assumed when the proposed executor may not even know they were nominated?

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