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Implied trust meaning

What does Implied trust mean?
An implied trust arises where the court treats a person as holding property on trust even though no express trust was declared, because the parties’ conduct, contributions or the surrounding circumstances require it. In practice the term is a descriptive umbrella for two case-law categories: resulting trusts (where a beneficial interest is inferred, for example from purchase-money contributions) and constructive trusts (imposed to prevent unconscionable retention, for example common intention constructive trusts over homes, or unauthorised fiduciary gains). It is not generally defined by statute and operates by law rather than by express declaration. In England and Wales, implied/resulting/constructive trusts fall outside the statutory writing requirements for trusts of land (see Law of Property Act 1925, s53(2)); comparable exclusions are recognised in Northern Ireland and Ireland through case law on the Statute of Frauds. Implied trusts are practically significant in allocating beneficial interests in land and shares, resolving cohabitation and joint venture disputes, tracing misapplied assets, and addressing priorities in insolvency. In Scots law, “implied trust” is not a technical category; analogous outcomes may arise in limited contexts (sometimes termed constructive trusts) or via unjustified enrichment, so terminology should be used with care.
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View the related News about Implied trust

NEWS
Phoenix v The Open University: Employment Tribunal finds discrimination and harassment over gender-critical beliefs; colleagues' open letter a 'call to discriminate', with breach of trust and confidence

On 22 January 2024, Employment Judge Jennifer Young concluded that Open University academics instigated a 'call to discriminate' against Professor Jo Phoenix by issuing an open letter opposing her gender-critical research network. That discriminatory letter in turn also triggered a 'pile-on' directed at Phoenix, Judge Young expressly observed. Phoenix v The Open University (ET/3322700/2021 & 3323841/2021) The judge found the university failed to secure an appropriate working environment for Phoenix, leaving her to weather the backlash within the institution. This failure amounted to a breach of the implied term of trust and confidence in her contract and ultimately prompted her resignation. According to Judge Young, the Open University did not shield Phoenix from the 'negative campaign' that followed thereafter the launch of her research network because it 'did not want to be seen to give any kind of support to academics with gender critical beliefs'. Phoenix had been employed as a professor from 2016 until she stepped down in December 2021, following what she described as an 'exceptionally...

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NEWS
Arbitration weekly: Court of Appeal limits affiliate protection and anti-suit relief; section 9 stay test; AI guidance for arbitrators and judges; international rulings, ISDS trends, institutional updates and events

In this issue: Arbitration in England & Wales International Arbitration Investment treaty arbitration Institutional and ad hoc arbitration Other arbitration and ADR-related news and developments Daily and weekly news alerts New and updated content Useful information No Weekly Highlights on 24 April 2025 Arbitration in England & Wales Arbitration clauses and third parties: limits of protection In Renaissance Securities v ILLC Chlodwig Enterprises [2025] EWCA Civ 369, the Court of Appeal refused an appeal for an anti-suit injunction (ASI) to halt Russian claims pursued against the appellant’s affiliates. Although parts of the dispute arose under contracts governed by English law with LCIA arbitration seated in London, the court concluded those promises to arbitrate did not bind non-party affiliates. It also dismissed the contention that the clauses carried an implied negative pledge preventing related litigation elsewhere. Moreover, while recognising the Russian action might be vexatious and/or aimed at sidestepping the arbitration provisions and relevant sanctions,...

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NEWS
Good faith and implied terms in agency agreements: English High Court clarifies MCMP entitlement, payment breaches and termination in Aston Martin MENA v Aston Martin Lagonda [2023] EWHC 3285 (Comm)

Aston Martin MENA Ltd v Aston Martin Lagonda Ltd [2023] EWHC 3285 (Comm) What are the practical implications of this case? This decision offers clear, detailed guidance on: construing competing readings of commercial contracts, and the extent and substance of express and implied duties of good faith Commercial lawyers should resist any analysis that isolates a single provision. The court undertook a meticulous review of each clause alongside the relevant definitions and related provisions to ascertain the parties’ true shared intention, particularly where ambiguity arose. As for implied terms grounded in business efficacy or good faith, the governing yardstick remains the test in Marks and Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2015] UKSC 72. In a professionally drafted commercial contract, a term will not be implied unless it is both necessary and obvious to achieve commercial or practical coherence. Finally, the court delivered a firm caution against parties seeking to rely on an expansive reading...

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PRACTICE NOTES
Land contracts in England and Wales: statutory exceptions to LP(MP)A 1989 s 2; constructive trusts, certainty, proprietary estoppel, and subsequent sale contracts

The section 2 requirements in the Law of Property (Miscellaneous Provisions) Act 1989 (LP(MP)A 1989) are disapplied for certain contracts and trusts. This Practice Note identifies those categories and outlines how the exceptions take effect. Excepted contracts The contractual formalities set out in LP(MP)A 1989, s 2 do not apply to contracts: for leases not exceeding three years (ie short leases under Law of Property Act 1925, s 54) made in the course of a public auction regulated under the Financial Services and Markets Act 2000 (other than a regulated mortgage contract, regulated home reversion plan, regulated purchase plan or a regulated sale and rent back agreement) Constructive trusts The statutory formalities in LP(MP)A 1989, s 2 do not affect the creation or operation of resulting, implied or constructive trusts. No written evidence is required. A constructive trust arises in relation to legal title where a party’s conduct makes it unconscionable to allow them to deny the other party...

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PRACTICE NOTES
Hague Trusts Convention in the UK: Recognition of Trusts Act 1987, Choice of Law, Validity, Recognition, Mandatory Rules and Conflict of Laws Issues

Practice Note This Practice Note does not offer an exhaustive description of the features of the Hague Trusts Convention of 1 July 1985 on the Law Applicable to Trusts (the Convention); rather, it serves as a primer and synopsis of selected key matters connected with this intricate subject. From the outset, it should be recognised that substantial scholarly controversy surrounds aspects of the Convention, alongside calls for amendment. This, in part, reflects its genesis and the formidable challenge confronting the drafters and sponsors, namely to frame rules that would satisfy both countries whose domestic systems include trusts ('trust states') and those that do not ('non-trust states'). Inevitably, there existed a strain between positions acceptable to trust states on one side and to civilian non-trust jurisdictions on the other. Accordingly, this remains a fluid and developing field. Owing to the complexity of various elements, practitioners are directed to fuller commentaries, notably Underhill and Hayton: Law of Trusts and Trustees, which explore the issues in depth. At a number of stages,...

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PRACTICE NOTES
Direct tax treatment of joint property arrangements: legal co‑ownership, bare trusts, partnership characterisation and ATED

The most straightforward way to invest in property together is for the investors to hold the asset jointly. Though this is comparatively uncommon in a commercial setting, where investors tend to create a structure such as a partnership or a company to serve as the joint venture vehicle, it still represents the prevailing and most familiar form of joint investment. For many individual investors, this is the route most often taken in practice. Contractual joint ownership Contractual joint ownership can take several forms, including: where each participant holds a direct legal interest in the asset (see Practice Note: Establishing a beneficial interest (joint ownership)) where a trust—express or implied—is established over the property, so that trustees hold the property for the trust’s beneficiaries (see Practice Note: Trusts of land—property) where an implied partnership arrangement is in place (see Practice Note: Forming a general partnership and continuing obligations) This Practice Note examines each of these joint ownership routes, their direct tax...

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PRECEDENTS
Employment Tribunal (ET1) para 8.2 precedent: grounds of claim for sex discrimination, sexual harassment, victimisation and constructive unfair dismissal (Equality Act 2010, England, Wales and Scotland)

[ Insert in para 8.2 of claim form ET1: ] The Respondent engaged the Claimant as a [ job title ]. She was based at the Respondent’s premises at [ insert address ], where she was one of only three women employed. [ It was an implied term of the Claimant’s employment contract that the Respondent would not behave in a way calculated or likely to erode the mutual trust and confidence between employer and employee. ] The Claimant contends that the Respondent subjected her to [ a course of ] discrimination, sex-related harassment, harassment of a sexual nature, and victimisation, which encompassed discriminatory and constructive unfair dismissal. On or around [ insert date ], her colleague, [ insert name ], asked her to send him certain sales reports. She informed [ insert name ] that she was in the process of compiling the figures and would supply the full report after lunch. He replied, ‘No need to bite my head off. Is it that...

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PRECEDENTS
ET3 precedent: defending constructive unfair dismissal claims, including wrongful dismissal, trust and confidence or express term breaches, grievance handling, affirmation, fair reason and Acas Code uplift issues

[ Insert in para 6.1 of response form ET3: ] It is [ accepted OR not accepted OR denied ] that the Claimant worked for the Respondent as [ insert job title, eg ‘a financial analyst’ or ‘an insurance sales manager’ ] from [ insert start date of employment ] until [ end date of employment ] [ at its [ insert details of particular office or location, eg ‘London Headquarters in Canary Wharf’ ] ]. It is [ accepted ] that the Respondent is [ insert brief description of the nature of the Respondent, eg a global investment bank ]. The Respondent disputes that the Claimant was constructively unfairly dismissed [ and/or wrongfully dismissed ], as alleged or at all. [ [ EXAMPLE A (Response to alleged breach of term of trust and confidence): ] It is acknowledged that the Claimant’s contract of employment, dated [ insert date ], contained an implied term that the Respondent would not, without reasonable and proper cause, act...

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Q&As
Statutory protection for widow after pre‑1989 rent‑free occupation

Trespasser or oral tenancy Given the circumstances and the length of time she has been there, it is improbable that the sister in law is occupying as either: a trespasser (albeit a tolerated one); or under a lease, since a lease may only be created orally where: the term does not exceed three years, it is not of an incorporeal hereditament, it takes effect in possession, and it is at the best rent reasonably obtainable without taking a fine. See the Law of Property Act 1925, ss 52 and 54, and our Q&A. A landlord let a property on an assured shorthold tenancy starting 4 May 2015 for a fixed term of six months. Rent falls due on the 4th day of each month. No deposit was taken and the tenants have committed no breaches. Unfortunately, there is no written tenancy agreement. The clients now wish to recover...

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