Recently, however, behavioral economics has provided a new understanding Overriding a party's voluntary choice to sign an agreement. "fairness" as a legal criterion (19) and the paternalism of Scholars decry the amorphousness of using The rule has a centuries-old pedigree, (18) it has also long beenĬriticized. (16) and substantively unconscionable (grossly unfair). Procedurally unconscionable (nonnegotiable and buried in fine print) To standard form contracts, (15) lets courts void clauses that are both Unconscionability, which applies most often Unconscionability: a potent exception to the tenet that courts should Nevertheless, despite this shared foundation, trust and contractĭiverge in a notable way. Parties cannot displace immutable rules, courts should not regulate this Pareto optimality." (14) Thus, unless fraud or coercion taints theĭrafting or execution of the trust, and subject to the proviso that the (13) Third, trust instruments, exactly like contracts, willīe economically efficient. These immutable rules are too vital to the institution of trust to beĭisplaced. Necessity that trustees owe enforceable duties-cannot be overridden. Trust rules-for example, the requisites of trust formation, or the (12) Second,Īs in contract law, not all trust law is default. Parties' wishes, the parties can freely modify them. (11) Because default rules are guesses about the First, likeĬontract law, trust law consists primarily of default rules (10)-roughĮstimates of how most parties would choose to resolve a givenĬontingency. (9) Nevertheless, the analogyīetween trust and contract yields three important points. For example, remedies for breach of trustĭiffer from those for breach of contract. (8) To be sure, trust law and contract lawĭo not overlap completely. "deal": a private agreement between the settlor and the In the lastĭecade, scholars and courts have begun conceptualizing the trust as a Law's absorption of principles from contract law. One defining characteristic of this reassessment has been trust
BROOKE ERICKSON BEFIT HOW TO
How to operate it are under consideration and, indeed, are changing Moment in time when our ideas about what a trust is, what it is for, and Trusts and Uniform Trust Code-ambitious projects that have reshapedĭoctrine more than merely summarized it (6)-have ushered in "a (5) The recently published Restatement (Third) of United States Supreme Court opened federal courts to a broad spectrum of Relative stasis, the law of trusts is suddenly in flux.
Trusts are now a staple of most estate plans.
Probate as slow, (2) expensive, (3) and "quite public," (4) Hundreds of billions of dollars a year for the next half-century-the Exculpatory Clauses and Other Pro-trustee ProvisionsĮven with the recent economic downturn, Americans will bequeath Unconscionability doctrine would improve outcomes in cases.Ī. No contest, and arbitration clauses-and shows how a trust-specific It then examines three commonīut controversial "substantively suspect" terms-exculpatory, Involvement and laden with complex terms. "procedurally suspect" trusts: those created without attorney Trust mills, and a revitalized do-it-yourself movement have spawned Trust-creation process are sufficient to align an instrument's text
It thenĬhallenges the unarticulated but intuitive notion that controls in the Underlying freedom of testation depart from those behind freedom ofĬontract and provide less support for a laissez faire regime. The Article then explains how the unconscionability doctrine could That the unconscionability doctrine strikes down contractual terms that Observing that it sharply deviates from her ex ante desires. It then argues that neither concept justifies upholding aĬontractual term if informational defects prevent one party from
BROOKE ERICKSON BEFIT FREE
That free exchange allows parties to maximize welfare and exercise free It sketches the leading rationalesįor why courts enforce promises between private actors: the theories Trust and contract defenses and the growing consensus among courts and This Article claims that trust law should recognize the