The Enforcement of Trusts in the Medieval Legal System

Trusts have been employed in the English legal system for hundreds of years.  In 1979, Prof. R.H. Hehnholz reviewed court records to examine the early history of trusts. Prof. Hehnholz started by noting, “As a means of avoiding feudal incidents and of evading the common law rule prohibiting devises of freehold land, the feoffment to …

Judge Posner Writes on Blameworthiness in Contract Theory

Continuing his recent discussion of fault in contract law, Judge Posner explains that, “The idea of ‘good faith’ is an example.  We generally want people to be honest and aboveboard in their dealings with others.  But there is no general duty of good faith in contract law.  If you offer a low price for some …

Judge Posner Considers the Distinction between Liability for Contract and Liability for Fraud

Judge Richard A. Posner of the Seventh Circuit Court of Appeals contributed his thoughts at a symposium on the rationale for liability for breach of contract.  One of his points is a sound analytic distinction between tort liability and contract liability, a concept which is sadly muddled in California cases. Writes Judge Posner, “Here is …

Differentiating The Duties Owed by Agents

Prof. Deborah A. DeMott from Duke University School of Law has written a thoughtful article in which she differentiates among the fiduciary duties owed by agents.  Prof. Demott begins as follows: “Legal theorists differ on how best to characterize fiduciary duty; to some, it’s best understood as a consequence of contract – as a set …

Professor John Langbein Discusses the Modern Trust as a Will Substitute

Legal scholar John Langbein addresses a question that has been on my mind – When did trust agreements evolve from classic fiduciary relationships into will substitutes? The answer is – a long time ago.  Explains Prof. Langbein, “Trust law is an ancient field.  The enforcement of trusts in the English court of Chancery can be …

Underwater and Not Walking Away – or, Why Don’t Lenders Refinance?

I have been approached by numerous potential clients asking if I can help with the restructuring of their mortgages.  The short answer is that I can provide no assurance regarding a refinancing.  The rules are murky, and the literature indicates that lenders are not providing meaningful reductions. A recent article by Prof. Brent White from …

Contractual Basis for Fiduciary Duties

Some commentators view fiduciary duties through a contractual framework.  Judge Frank Easterbrook and Professor Fischel state, “The fiduciary principle is fundamentally a standard term in the contract.  Fiduciary duties are not special duties; they have no moral footing; they are the same sort of obligations, derived and enforced in the same way, as other contractual …

Mary Szto – Historical Review of Fiduciary Duties in an LLC – Part 3

This is the third part of a review of Mary Szto’s article, “Limited Liability Company Morality: Fiduciary Duties in Historical Context,” 23 Quinnipiac Law Review 61 (2004-2005).  This week we get to the heart of the matter – the case law summary. The author starts by explaining that, “In the Anglo-American tradition, principals of a …

Mary Szto – Limited Liability Company Morality

This is part two of a discussion of an intriguing law review article on fiduciary duties as applied in the context of limited liability companies.  The prior blog considered the theological roots cited by Ms. Szto.  This part examines other roots for fiduciary duties. Ms. Szto starts again with a religious analysis.  Says she, “Canon …

Religious Roots for Fiduciary Duties

Legal commentators have differing opinions regarding the origin and background of fiduciary duties.  A recent article by Mary Szto would seem to focus on the business side of things, as her article is entitled “Limited Liability Company Morality: Fiduciary Duties in Historical Context,” 23 Quinnipiac Law Review 61 (2004-2005). However, the author strikes a deep …