ABSTRACT
This paper considers a number of aspects of the intersection of the law of agency with the law of trusts. It is possible for trusts to operate without recourse to the principles of agency law, and similarly agents can operate without recourse to the law of trusts. But in many situations the two bodies of law come into play together. This is particularly the case where group-decisionmaking is involved because there are two or more trustees. In relation to group decisionmakers, the common law, equity, and ecclesiastical law developed different presumptions: respectively, co-owners and co-agents usually act by majority, co-trustees usually have to act unanimously and cannot delegate, but co-executors can usually act unilaterally. Although trustees must act unanimously, unless a third party knows that they are trustees, the third party can assume co-owners operate under the common law rules. Hence a wrongful delegation will not prevent the trustee who acts from having actual and/or apparent authority to bind the others. The paper then discusses a number of cases where there has been a failure to appreciate this fact, including cases where trustees own shares in a company or are running a partnership. The last section of the paper then considers situations where an agent has a common law principal, but nonetheless might also hold property on trust for the principal.
Watts, Peter G, Some Aspects of the Intersection of the Law of Agency with the Law of Trusts (December 2, 2016).
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