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Review Your SQE 1 Practice Records

Examination Timing: 00H00M57S

Emma executes a declaration of trust in which she declares a trust in favour of Rachel over all the money which she has in a specified bank account in Laura's name. She intends to transfer £10,000 into the bank account but accidentally transfers £100,000 into the bank account. She asks Laura to transfer £90,000 back to her but Laura refuses, stating that she is unable to transfer the money back to Emma as it is subject to a trust. Which of the following statements best describes the position?

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Your selected option: A

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The correct answer is C. Although Emma transferred £100,000 into the account and the whole sum would therefore appear to form the subject matter of the trust, the fact that £90,000 was mistakenly transferred into the trust account would mean that there was no intention to create a trust over that part of the money. As no certainty of intention exists, no trust would be created in relation to that part of the money. If Laura were to continue to refuse to transfer the money back to Emma, Emma would have a claim in restitution to recover the money. 


Key Point: Certainty of intention is essential for the creation of a trust. A mistaken transfer does not satisfy this requirement, allowing the transferor to claim restitution.

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