Important Legal Definitions
Explore legal terms, clear definitions and practical examples.
Constructive Trust
Principles of Natural Justice & Equity
Definition
An equitable remedy imposed by the court by operation of law (codified in Chapter IX of the Indian Trusts Act, 1882) where a person holds legal title to property under circumstances where it would be unconscionable for them to retain the beneficial interest.
Example
An agent authorized to purchase an estate for his principal purchases the property in his own name using the principal's funds; the court declares that the agent holds the title as a constructive trustee for the benefit of the principal.