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Contract Liability

Contract Liability. Warning. Do not sue a trust! A trust is not a legal entity. You must sue the trustee in the trustee’s representative capacity. Suit against Trustee, in representative capacity. Common law = not allowed Texas = allowed if contract was within trustee’s capacity to make.

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Contract Liability

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  1. Contract Liability

  2. Warning • Do not sue a trust! • A trust is not a legal entity. • You must sue the trustee in the trustee’s representative capacity.

  3. Suit against Trustee, in representative capacity • Common law = not allowed • Texas = allowed if contract was within trustee’s capacity to make. • § 114.084(a).

  4. Suit against Trustee personally • General Rule = yes • Exceptions: • Express provision in contract (not trust) excluding trustee from personal liability. • Trustee signing contract “as trustee” is prima facie evidence of intent to exclude personal liability.

  5. Duty of Attorney for Trustee • If represent Trustee: • If represent other contracting party:

  6. Notice duty of Plaintiff -- § 115.015 • Purpose = alert beneficiaries that trustee is breaching contracts; beneficiaries may intervene. • Plaintiff must give notice to beneficiaries: • Within 30 days of filing suit, and • At least 31 days before judgment. • If plaintiff submits written request, trustee must provide names and addresses within 10 days. • Notice to the “list” beneficiaries deemed sufficient.

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