Trustees' Powers and Duties and Personal Liability for Breach - Fiduciary Duties

6 important questions on Trustees' Powers and Duties and Personal Liability for Breach - Fiduciary Duties

Express trustees = Fiduciaries

Express trustees are fiduciaries and owe a paramount duty of loyalty to the beneficiaries of the trust.

Position of resulting and constructive trustees

Less straightforward but it might be said that trustees of presumed resulting trusts and constructive trusts do not owe fiduciary duties because there is no voluntary assumption of responsibility.

Overriding Duty of Loyalty by Lord Herschell, Bray v Ford [1896]

‘…it is an inflexible rule of a court of equity that a person in a fiduciary position…is not entitled to make a profit; he is not allowed to put himself in a position where his interest and duty conflict
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Consequences of Functions of Fiduciary Duties

The duty is strictly enforcedand the standard applied is high – indeed it is sometimes argued that the duty is too strictly applied with unduly harsh results.

Consequences of Breach of Fiduciary Duty

Breach of fiduciary duty allows the principal to rescind the transaction and require fiduciary's:


Breach of no-profit rule: Disgorgement of profits
Breach of no-conflict rule: Compensation

Role of Contract or Trust Instrument in Fiduciary Duties

Fiduciary duties might be modified by express provision in the relevant contract or trust instrument.

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