Ashburn anstalt v arnold 2011 PDF

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Ashburn Anstalt v Arnold [1989] Ch 1 Court of Appeal Basic Facts See other file Issue for the Court Does a contractual license bind a purchaser? Held Fox LJ 

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Case of D that contractual license is binding on a purchaser if purchaser has notice of the agreement o Most certainly, authority shows that license does not create an interest in land on its own – deed to that effect must be agreed etc and made into a restrictive covenant. o Decision in Errington was correct  But Lord Denning’s assertion that only person who can resist effect of contractual license is purchaser without notice is wrong.  The purchaser is not bound by a contractual license – it is enforceable only against the two parties who made it. However, constructive trust analysis is applicable o The test is whether the owner of the property has so conducted himself  that it would be inequitable to allow him to deny the claimant an interest in the property  Lord Denning can however be approved in Binnions v Evans  Here the estate would have allowed D to continue living in the house  They drew to P’s attention the agreement they had made with D  They put a clause in to try and prevent P from turfing D out  And they lowered the purchase price of the land for P because they wished him to be so bound o Thus, constructive trust arose. o However the court will not impose a constructive trust unless it is satisfied that the conscience of the estate owner is affected.  The mere fact that that land is expressed to be conveyed "subject to" a contract does not necessarily imply that the grantee is to be under an obligation to give effect to the provisions of the contract....