The Contractarian Basis of the Law of Trusts John H. Langbein Professor Langbein observes that a trust embodies a deal between settlor and trustee about how the trustee will manage and apply the trust assets for the trust beneficiaries. Because virtually all trust law consists of default rules that the parties can alter, the parties to a particular trust in effect choose to accept those default rules that they do not oust.
Trusts thus exhibit the twin hallmarks of contract, consensual formation and consensual terms.
Professor Langbein examines how the Restatement of Trusts came to err in denying the contractarian character of the trust, and he depicts the trust as a type of standardized contract. Professor Langbein contends that greater sensitivity to the contractarian dimension of the trust will appropriately diminish the harshness of trust fiduciary law in cases in which conflicts of interest are embedded in the terms or the logic of the trust deal.