Speight v Gaunt

Facts

A trustee employed a stockbroker, in the usual way, to buy securities. The broker kept the money and went bankrupt.

Issue

Was the trustee liable?

Held

No. The House of Lords held the trustee had acted as a prudent man of business would in his own affairs.

Principle

A trustee must act as an ordinary prudent man of business, and may employ agents in the usual way.

Why it matters

It sets the general standard of care for trustees.

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