For the Public
Breach of Trust Conditions/Undertakings
In legal transactions, money and property must change hands.
The lawyer's role is to hold documents and property in trust until
the performance of particular conditions. These conditions
are called "trust conditions". Promises by lawyers to carry
out certain tasks and/or fulfill certain conditions are known as
For example, in the sale of a residential property, the
seller's lawyer sends the document signed by the seller
transferring the land over to the buyer's lawyer on several 'trust
conditions'. The trust conditions must be fulfilled before the
buyer's lawyer can register the land transfer. The most
important trust condition in this example is that the buyer's
lawyer must ensure that they have the money in place for the seller
before registering the transfer of title.
The buyer's lawyer ensures that the seller's lawyer gives
"undertakings" or promises to do particular things such as ensuring
that any interests on the land which may attach to the land (such
as writs, caveats/interests, and mortgages) are removed so
that the buyer will receive "clear title" to the land they are
Rule 6.02(11) and accompanying Commentary state the
The lawyer must not give and
undertaking that cannot be fulfilled and must fulfil every
undertaking given and honour every trust condition once
Undertakings should be written or
confirmed in writing and should be absolutely unambiguous in their
The person to whom the undertaking
is given is entitled to expect that the lawyer giving it will
honour it personally.
If a lawyer is unable or unwilling
to honour a trust condition imposed by someone else, the subject of
the trust condition should be immediately returned to the person
imposing the trust condition, unless its terms can be forthwith
amended in writing on a mutually agreeable basis.
Please see Rule 6.02 (11) for additional commentary.