Advanced Search
MyIDEAS: Login

The Functions Of Trust Law: A Comparative Legal And Economic Analysis


Author Info

  • Henry B. Hansmann

    (School of Law)

  • Ugo A. Mattei

    (University of California, Hastings College of the Law)

Registered author(s):


    This Article analyzes the functions served by the law of trusts and asks, first, whether the basic tools of contract and agency law could fulfill the same functions and, second, whether trust law provides benefits that are not provided by the law of corporations. The analysis is motivated in part by the increasing interest in the trust -- a familiar feature of common-law jurisdictions -- in a number of civil law countries, and in part by the important role that trusts, such as pension funds and mutual funds, have come to play in capital markets. The article concludes that the important contribution of trust law lies not in its well-recognized role of ordering, via default rules of contract, the relationships among the principal parties to the trust. Rather, the principal benefit of trust law lies in its ordering of relationships between those parties and third parties with whom they deal, relationships that cannot easily be rearranged by contract. Most conspicuously in this respect, trust law allows the parties to the trust to partition off a discrete set of assets for separate treatment in relationships formed with creditors. The essential role of the trust, therefore, is to perform a property law-like, rather than a contract law-like, function. The article also notes the increasing convergence of trust law and corporate law, and asks whether the roles performed by these two legal forms could just as well be served by a single form.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL:
    Our checks indicate that this address may not be valid because: 503 Service Unavailable. If this is indeed the case, please notify ()
    Download Restriction: no

    Bibliographic Info

    Paper provided by Yale School of Management in its series Yale School of Management Working Papers with number ysm102.

    as in new window
    Date of creation: 09 Oct 1998
    Date of revision:
    Handle: RePEc:ysm:somwrk:ysm102

    Contact details of provider:
    Web page:
    More information through EDIRC

    Related research



    No references listed on IDEAS
    You can help add them by filling out this form.


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. John Armour & Michael J Whincop, 2005. "The Proprietary Foundations of Corporate Law," ESRC Centre for Business Research - Working Papers wp299, ESRC Centre for Business Research.
    2. Gary Gorton & Andrew Metrick, 2012. "Securitization," NBER Working Papers 18611, National Bureau of Economic Research, Inc.
    3. Montagne, Sabine, 2009. "Analyse Economique du Droit versus Institutionnalisme. Une comparaison "en situation"," Economics Papers from University Paris Dauphine 123456789/1477, Paris Dauphine University.


    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.


    Access and download statistics


    When requesting a correction, please mention this item's handle: RePEc:ysm:somwrk:ysm102. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.