Party Autonomy in International Property Law - Peace Palace Library

A. General Aspects of Party Autonomy
son, C, B’s right will bind C because B’s right is in relation to the right
C has acquired. Similarly, if A goes into bankruptcy, B’s right against A’s
right will bind A’s trustee in bankruptcy and hence will be protected in
this event. 18
Whenever one party is obliged to hold a right for the benefit of another a
trust arises, because that is, definitionally, what a trust is. So, if A makes a
binding contract to transfer specific shares, or receivables, or title to land,
or an intellectual property right, or an equitable interest to B, A becomes
a trustee of this right upon payment even though the requisites of transfer
have not been fulfilled. This does not offend the rules relating to the
transfer of rights because a trust involves no transfer. 19 Once the transfer
has been made, there is no longer any trust because there is no longer any
duty owed to anyone. In English law, I have one single indivisible right to
the computer on which I am currently typing, not two rights one at law
and another in equity.
So called ‘equitable assignments’ are also of the above kind. 20 Contractual
rights were, and are, non-transferable because of privity of contract:
only someone who has been promised something by the promisor and
who has provided consideration in exchange for that promise acquires a
contractual right. Allowing the free transfer of contractual rights would
offend privity of contract by allowing people who satisfy neither of these
conditions to sue. An equitable assignment, despite its name, does not
Trusts and Pensions Journal 28 (2009), 332; W. Swadling in: Burrows (ed),
English Private Law (2 nd edn, 2007) at 4.140-4.153; B. McFarlane and R.
Stevens; ‘The Nature of Equitable Property’, Journal of Equity (2010) 1; cf R.
Nolan, ‘Equitable Property’, LQR 122 (2006), 232.
18
For bankrupt individuals this is expressly stated in the Insolvency Act 1986, s
283(3)(b). It is also true of insolvent companies despite the absence of expression
in legislation: see e.g. Barclays Bank Ltd v Quistclose Investments Ltd [1970]
AC 567.
19
See e.g. Lysaght v Edwards (1876) 2 Ch D 499; Walsh v Lonsdale (1882) 21 Ch
D 9. In principle the same concept applies where A’s duty to B with respect
to a right of A’s arises for reasons other than a contract between them (e.g.
because of unjust enrichment or an equitable wrong).
20
See the careful work by Chee Ho Tham, ‘Notice of Assignment and Discharge
by Performance’ [2010] LMCLQ 323 and ‘The Nature of Equitable Assignment
and Anti-Assignment Clauses’ in: J. Neyers & R. Bronaugh (eds.), Exploring
Contract Law (Hart, 2009), 283.
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Robert Stevens
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