ABSTRACT
Before we begin, however, I would proffer just one idea about Quistclose trusts which is never considered by trusts lawyers. One of my other fields is finance law. In my book The Law of Finance , 2 I discuss the law governing lending transactions in great detail. For any practising banking lawyer, this area looks entirely different from the way it looks to a trusts lawyer. If you are a banking lawyer advising a bank about the terms of its loan contract in relation to a particularly risky borrower, then you would draft that loan contract so that you make the terms and nature of your Quistclose trust very clear indeed. Therefore, no banking lawyer worth their salt would ever leave the effect of their banking contract to be analysed by the court by reference to a series of unknown, vague academic categories because they would expect to be sued for negligence if they did. Consequently, this entire discussion should be considering the terms of loan contracts first, before acknowledging that the debate about Quistclose trusts in the academic journals is just a debate about the exceptional categories of trust in circumstances in which lawyers have failed to draft the banks’ loan contracts properly.
