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Agency v. Trust

Trusts and agencies both involve fiduciary duties, but they differ in important ways. A trust requires that title to property be vested in a trustee, whereas an agency relationship does not necessitate property ownership. Additionally, trustees contract as principals on behalf of the trust, while agents do not become parties to contracts. Finally, the death of a trustee will not terminate a trust as a new trustee can be appointed, unlike an agency which ends with the death of either party.

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5K views1 page

Agency v. Trust

Trusts and agencies both involve fiduciary duties, but they differ in important ways. A trust requires that title to property be vested in a trustee, whereas an agency relationship does not necessitate property ownership. Additionally, trustees contract as principals on behalf of the trust, while agents do not become parties to contracts. Finally, the death of a trustee will not terminate a trust as a new trustee can be appointed, unlike an agency which ends with the death of either party.

Uploaded by

audy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Trust and agency

[2]
Trustees and agents both owe fiduciary duties. Differences between trust and agency are:

a) An agency relationship can be created without vesting any property in the agent, whereas
title to property under a trust must be vested in a trustee.

b) The agent himself does not have to be party to contracts. A trustee who makes a contract in
the administration of the trusts contracts as principal, whereas an agent creates a contract on
behalf of the principal, he himself is not a party to the contract with another party.

c) At common law the relationship of principal and agent terminates on the death of either. If a
trustee dies, however, the trust is not terminated. Instead, a new trustee is

appointed.

Agency Trust

Whereas title to property under a trust must be


An agency relationship can be created without
vested[1] in a trustee. A trust only exists if it holds
vesting any property in the agent,
property.

The agent himself does not have to be party to A trust is always the result of a contract with a
contracts. grantor.

A trustee who makes a contract in the


The agent is not the principal.[2] administration of the trusts contracts as if he was
the principal.

Whereas an agent creates a contract on behalf of the A trustee opens accounts as principal of the
principal, he himself is not a party to the contract with account which holds property under conditions of
another party. the indenture of the trust.

At common law the relationship of principal and agent If a trustee dies, however, the trust is not
terminates on the death of either. terminated. Instead, a new trustee is appointed.

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