TRUSTS FROM A CIVIL LAW PERSPECTIVE - David Hayton

BEYOND CONTRACT LAW

Civil law jurisdictions have a much broader notion of contract than English law because they do not require a binding contract to be founded on consideration (a "quid pro quo") passing from one party to the other party and because they do permit contracts for the benefit of third parties to be enforced by those third parties - which was not permitted in England until 2000 when the law was changed by the Contracts (Rights of Third Parties) Act 1999.
Thus, when "Civilopia" considers the settlor's transfer of ownership of his property to a trustee for the benefit of beneficiaries, it is natural to regard this as a property-related contract for the benefit of the beneficiaries. When Civilopia considers that the property subject to such apparent contract is immune from the claims of the trustee's creditors and heirs, then Civilopia recognises that the contract is a special one because it creates a special obligation affording the beneficiaries' claims priority over those of the trustee's creditors and heirs....

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