Article: Between Concepts and Policy: The Constructive Trust between Vendor and Purchaser in a Mixed Legal Tradition

Pablo Lerner recently published an article entitled, Between Concepts and Policy: The Constructive Trust between Vendor and Purchaser in a Mixed Legal Tradition, Wills, Trusts, & Estates Law ejournal (2022). Provided below is the abstract to the Article:

Constructive trusts are used in a variety of common law jurisdictions, particularly in the United Kingdom, Canada, and Australia. Using a comparative law approach, this paper addresses some seminal questions about constructive trusts between vendors and purchasers from the perspective of a mixed legal jurisdiction.

Understanding the constructive trusts between vendors and purchasers implies acknowledgment of a ‘grey area’ that exists between the agreement to transfer assets and the effective transfer of them. This gap occurs as the result of the period of time between the agreement and the formal transfer of the assets. Therefore the question is between two principles that refer to different values: formalism (prior tempore potior jure) and judicial discretion to cure legal.

The article`s thesis is that a constructive trust between vendors and purchasers is both institutional and remedial. It is institutional in the sense that its source is the very agreement between vendor and purchaser but its effectiveness depends on conditions that will be determined only after the legal accident occurs and the courts have decided that according to the circumstances the purchaser’s protection is reasonable and justified: therefore, it is also a remedial character The final section deals with CTVPs and insolvency and examines some of the differences between the competition of a purchaser vis-à-vis one creditor and the situation in which the vendor is insolvent with several creditors, of which the purchaser is only one.