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Questions and Answers
What is one of the main reasons equity is considered important?
What is one of the main reasons equity is considered important?
What does the principle of equity state when there is a conflict between common law and equity?
What does the principle of equity state when there is a conflict between common law and equity?
What was one primary issue with having separate jurisdictions for common law and equity?
What was one primary issue with having separate jurisdictions for common law and equity?
Which reform created a single High Court where both common law and equity could be applied?
Which reform created a single High Court where both common law and equity could be applied?
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According to Ashburner, how do common law and equity coexist after the reforms?
According to Ashburner, how do common law and equity coexist after the reforms?
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Which quality of equity introduces an element of unpredictability?
Which quality of equity introduces an element of unpredictability?
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What does the concept of 'fusion' refer to in the context of the Judicature Acts?
What does the concept of 'fusion' refer to in the context of the Judicature Acts?
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What distinction does a trust create regarding property ownership?
What distinction does a trust create regarding property ownership?
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What is a primary purpose of establishing a trust?
What is a primary purpose of establishing a trust?
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What did John Selden imply about equity compared to law?
What did John Selden imply about equity compared to law?
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Which type of trust is created intentionally by the settlor?
Which type of trust is created intentionally by the settlor?
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How do fixed trusts differ from discretionary trusts?
How do fixed trusts differ from discretionary trusts?
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What type of trust is created in a settlor's will?
What type of trust is created in a settlor's will?
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What characteristic of a trust helps prevent frivolous spending by beneficiaries?
What characteristic of a trust helps prevent frivolous spending by beneficiaries?
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What principle prevents a party from denying the fulfillment of a promise after another party has relied on it?
What principle prevents a party from denying the fulfillment of a promise after another party has relied on it?
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Which equitable maxim states that the law cannot be used to perpetrate a fraud?
Which equitable maxim states that the law cannot be used to perpetrate a fraud?
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Which statement about beneficiaries’ rights in a trust is true?
Which statement about beneficiaries’ rights in a trust is true?
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What is the legal relationship known as where one party holds property for another's benefit?
What is the legal relationship known as where one party holds property for another's benefit?
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Why are discretionary trusts considered difficult to tax?
Why are discretionary trusts considered difficult to tax?
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In the context of fiduciary relationships, which of the following statements is true?
In the context of fiduciary relationships, which of the following statements is true?
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Which equitable principle ensures that someone cannot seek a remedy if they have acted dishonestly?
Which equitable principle ensures that someone cannot seek a remedy if they have acted dishonestly?
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Which of the following represents a situation that would likely invoke the equitable principle of unconscionability?
Which of the following represents a situation that would likely invoke the equitable principle of unconscionability?
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What is the primary obligation of a trustee in a trust relationship?
What is the primary obligation of a trustee in a trust relationship?
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How does equity differ from the common law approach?
How does equity differ from the common law approach?
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What is the primary purpose of equity in relation to legal ownership?
What is the primary purpose of equity in relation to legal ownership?
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How did the jurisdiction of the Lord Chancellor evolve over time?
How did the jurisdiction of the Lord Chancellor evolve over time?
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What distinguishes a trust from a gift?
What distinguishes a trust from a gift?
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What role did petitioning the King serve before the establishment of specialized courts?
What role did petitioning the King serve before the establishment of specialized courts?
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In the context of equity, what is an important characteristic of equitable remedies?
In the context of equity, what is an important characteristic of equitable remedies?
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What was a major outcome of the Earl of Oxford's case?
What was a major outcome of the Earl of Oxford's case?
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What does equity primarily seek to achieve in legal disputes?
What does equity primarily seek to achieve in legal disputes?
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What is one of the key differences between equity and common law?
What is one of the key differences between equity and common law?
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Study Notes
Equity and the Trust Instrument
- Equity is a system of law that aims to prevent unconscionable conduct.
- Equity operates on the conscience of the owner of the legal interest, to prevent them from doing wrong.
- Equity is a "gloss" on the common law, developed to address unjust results under common law.
- The Lord Chancellor acted as the "conscience of the King" applying equity to provide relief.
- Equity rules are often used in contract law related to remedies (injunctions or specific performance).
The Earl of Oxford's Case (1615)
- Illustrates the importance of equity.
- Highlights that equity aims to do right.
- Shows that strict application of common law can lead to unjust outcomes
- In this case, the law required the sale to have been valid and followed procedures but the actions were unjust so this prompted intervention from equity law.
Where Does Equity Come From?
- Equity developed due to the limitations of common law and the need to address unconscionable or unjust actions.
- Equity is subjective and unpredictable as it is based on the individual conscience of a Chancellor.
- The Judicature Acts (1873-5) created a single high court incorporating both common law and equity. This resulted in a combined system of legal jurisdiction but there were different opinions on whether it was a substantive fusion of the laws or an administrative fusion.
Modern Application of Equity
- Equity rules and development are still guided by significant principles like unconscionability.
- Unconscionability refers to actions deemed fraudulent or unjust.
- Examples in law include commitments that a party made, but then they change their mind and refuse to carry out their commitments due to certain events.
What is a Trust?
- A trust involves a relationship recognised by equity where property is held by a trustee for the benefit of another party (beneficiary).
- A trust defines clear legal and equitable obligations on a trustee.
Types of Trusts
- Express private trusts - These are created intentionally by the settlor for the benefit of one or more people.
- Fixed trusts - Distribute assets in fixed proportions to beneficiaries.
- Discretionary trusts - Trustees exercise their discretion in distributing assets based on their judgment to beneficiaries.
- Testamentary trusts - Established under the terms of a will.
- Inter vivos trusts - Established during a person's lifetime.
Trust vs Gift
- A trust involves an obligation to deal with the property owned by him for the benefit of beneficiaries.
- A gift is a transfer of ownership with no obligation or requirement on the part of the recipient.
- Trusts are imperative while powers (also known as a bare power) are discretionary.
- Common issue is whether something is a Trust or a gift which hinges on whether there is an obligation associated with it or if it just a desire.
Power - Discretionary
- Powers can be either fiduciary and/or mere/bare.
- Fiduciary Powers - A fiduciary power involves a legal obligation to use the power in the best interests of beneficiaries (e.g., a solicitor).
- Bare/Mere Powers - involve no legal obligation (e.g., a person giving power to someone to distribute assets amongst their friends).
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Description
Explore the principles of equity as they relate to the trust instrument in this informative quiz. Learn how equity aims to prevent unjust outcomes and serves as a remedy when common law falls short. Delve into landmark cases, such as The Earl of Oxford's Case, to understand the application of equity in legal contexts.
