Equity and the Law of Trust Chapter 6 § 2

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Questions and Answers

According to the text, who is considered a volunteer under a trust unless they have provided valuable consideration or are within the scope of the marriage consideration?

Any person who has provided valuable consideration
Only the husband, wife, and issue of the marriage (correct)
Any beneficiary under a trust
Illegitimate children or children by a former or possible second marriage

What is meant by 'marriage consideration' according to the text?

The financial benefits received by the husband and wife
The value of the assets included in the settlement or trust
The special rights and privileges granted to the husband, wife, and issue of the marriage (correct)
The act of entering into a marriage

What is the main importance of knowing whether or not a trust has been completely constituted according to the text?

Establishing the terms and conditions of the trust
Enforcing the trust by a beneficiary who is a volunteer (correct)
Identifying the beneficiaries of the trust
Determining the validity of the trust

According to the text, a beneficiary who has provided valuable consideration can enforce a trust even if it has not been completely constituted. True or False?

True (B) Signup and view all the answers

According to the text, a volunteer beneficiary can enforce a trust even if it has not been completely constituted. True or False?

False (B) Signup and view all the answers

According to the text, if a beneficiary has provided consideration, they can compel their trustee to bring an action at law for damages for breach of the contract or covenant to create a trust. True or False?

True (B) Signup and view all the answers

According to the text, a beneficiary who is a volunteer can enforce a trust even if it has not been completely constituted. True or False?

False (A) Signup and view all the answers

According to the text, what is the common law's view on consideration and the formality of a deed?

Consideration and the formality of a deed are both required. (A) Signup and view all the answers

According to the text, can volunteers compel trustees to take proceedings for damages?

No, volunteers cannot compel trustees to take proceedings for damages. (B) Signup and view all the answers

According to the text, what happens if the settlor has transferred property to trustees in compliance with an unenforceable covenant to settle the same in favor of volunteers?

The property must be held by the trustees on the declared trusts. (B) Signup and view all the answers

According to the text, what was the outcome of the case Re Ralli's Will Trusts?

The court held for the plaintiff and the share of the residue should be paid over to the plaintiff as trustee of the marriage settlement. (C) Signup and view all the answers

According to the Contracts (Rights of Third Parties) Act 1999, a person who is not a party to a contract may enforce a term of the contract if the term purports to confer a benefit on them. However, there are certain conditions that must be met for the third party to enforce the term. Which of the following conditions is NOT required for a third party to enforce a term of the contract?

The third party must be in existence when the contract is entered into. (D) Signup and view all the answers

Under the Contracts (Rights of Third Parties) Act 1999, a third party who is entitled to enforce a term of a contract has the same remedies as if they were a party to the contract. However, there is one remedy that a third-party volunteer beneficiary is still unable to obtain. What is that remedy?

Specific performance (C) Signup and view all the answers

The Contracts (Rights of Third Parties) Act 1999 does not apply to contracts entered into before a certain date. When did the Act come into force?

11 May 2000 (C) Signup and view all the answers

According to the text, the Contracts (Rights of Third Parties) Act 1999 has modified the law regarding third-party beneficiaries. How has the Act affected the law?

It has expanded the rights of third-party beneficiaries. (D) Signup and view all the answers

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Study Notes

Enforcement of Trusts by Volunteer Beneficiaries

A beneficiary under a trust is considered a volunteer unless they have provided valuable consideration or are within the scope of the marriage consideration.
Marriage is considered the most valuable consideration, and a trust made in consideration of marriage is regarded as made for value.
Only the husband, wife, and issue of the marriage are within the scope of the marriage consideration.
Knowing whether a trust has been completely constituted is important for the enforcement of the trust by a volunteer beneficiary.
If a beneficiary has provided valuable consideration, they can enforce the trust even if it has not been completely constituted.
A beneficiary who is not a volunteer can enforce both completely and incompletely constituted trusts.
They can compel their trustee to bring an action for damages or enforce the trust through specific performance.
However, a beneficiary who has provided consideration can only compel their trustee to exercise their remedy at law if the contract or covenant is not appropriate for specific performance.
If a trust is not completely constituted, a volunteer beneficiary cannot gain assistance from a court of equity to enforce the trust.
The fact that the obligation is contained in a deed does not make a difference in equity.
Trustees cannot be compelled by volunteers to take legal action for damages, and the court may direct them not to take any steps to enforce the covenant.
A volunteer beneficiary who is the covenantee can bring an action at common law on the covenant, but cannot obtain the equitable remedy of specific performance.

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