Quistclose trust

Meaning

Noun

• A trust created where a creditor has lent money to a debtor for a particular purpose. If the debtor uses the money for other purposes, it is held on trust for the creditor. Any inappropriately spent money can then be traced and returned to the creditor.

Origin

• In reference to the 1968 case of Barclays Bank Ltd v Quistclose Investments Ltd.