12 Questions
According to James LJ, why is the Court not entitled to receive evidence about whether the principal suffered an injury?
To protect agents from facing dangerous inquiries
What is the suggested way to relax the fiduciary rule in Murad v Al-Saraj?
Allow the fiduciary to prove the conflict of interest did not harm the principal
According to Arden LJ, what effect would shifting the burden of proof to fiduciaries have?
Serve as a sufficient deterrence
What is a common scenario where a constructive trust may arise?
A holds funds given by mistake
In what circumstances do fiduciary duties arise according to James Edelman?
When there is a relationship of trust and confidence
What is emphasized by Edelman as crucial in determining when fiduciary duties arise?
"Undertaking" between parties
Why is the Self-Dealing Rule significant for trustees?
To prevent conflicts of interest as the trustee acts as both vendor and purchaser.
What is the key exception to the Self-Dealing Rule as explained in the text?
Holder v. Holder: Where a fiduciary purchases trust property in an auction.
What is the Fair Dealing Rule, as described in the text?
A rule that ensures beneficiaries receive full value when trustees purchase their beneficial interest.
Why do innocent purchasers take good title before a voidable transaction is voided?
Because they are unaware of the transaction being voidable.
What are the reasons for the strict liability imposed by the Self-Dealing Rule?
To deter trustees from engaging in questionable transactions and to reduce evidentiary complexity.
According to Lionel Smith, why may the goal of deterrence not be considered worthy for private law?
It may lead to an overly cautious approach among trustees.
Test your knowledge on the Self-Dealing Rule in the context of trustees. Understand when transactions involving trustees purchasing trust property or selling their own property are considered voidable, and the exception to this rule based on the Holder v. Holder case.
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