What is a constructive trust?

A constructive trust is a type of trust that is imposed by a court to prevent one party from being unjustly enriched at the expense of another party. It does not arise from an agreement between parties, but rather is imposed by a court in certain circumstances where it is deemed necessary to prevent unfairness or unjust enrichment.

Constructive trusts are typically imposed in situations where one party has acquired property or assets through fraud, undue influence, mistake, or other wrongful conduct. The court will recognize that even though legal title to the property may be held by one party, it is actually held in trust for the benefit of another party.

The purpose of a constructive trust is to ensure that the party who has been wronged is able to recover the property or assets that rightfully belong to them. It is a remedy that is available in equity and is used to prevent unjust enrichment and ensure that parties are treated fairly and equitably.

Constructive trusts are a powerful tool used by courts to remedy unjust situations and provide a legal framework for restoring property or assets to their rightful owners. They are often used in cases involving fraud, breach of fiduciary duty, or other types of misconduct where one party has gained an unfair advantage over another.