Contracting in different capacities

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A trustee can act in different capacities. At times they will be acting in their personal capacity while at other times they will be acting in their capacity as trustee. Having a dual capacity raises the possibility that a person might purport to form a contract with themselves acting on each side of the contract in a different capacity. For example, a trustee might wish to acquire trust property or to become an employee of the trust, requiring them to form a contract with themselves. The traditional position of the common law has been clear that such contracts are conceptually impossible. However, some cases have departed from that traditional position, resulting in two conflicting lines of authority. The author examines those lines of authority and concludes that the most compelling line of authority confirms the traditional view that such transactions are not contracts.The author examines how some transactions, such as a trustee acquiring trust property or subscribing for units in a unit trust, can be completed by unilateral acts or decisions of a trustee without the need to resort to the law of contract. The issue has practical implications for trustees purporting to deal with themselves in their personal capacity.
Original languageEnglish
Pages (from-to)99-111
JournalJournal of Contract Law
Issue number2
Publication statusPublished - 2008


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