What is the relation between a vendor and purchaser under a contract?
British Columbia, Canada
The following excerpt is from Martin Commercial Fueling Inc. v. Virtanen, 1997 CanLII 3118 (BC CA):
The "relation back" theory is attributed to James, L.J., who in his dissenting judgment in Rayner v. Preston (1881) 18 Ch.D. 1, said this: I am of opinion that the relation between the parties was truly and strictly that of trustee and cestui que trust. I agree that it is not accurate to call the relation between the vendor and purchaser of an estate under a contract while the contract is in fieri the relation of trustee and cestui que trust. But that is because it is uncertain whether the contract will or will not be performed, and the character in which the parties stand to one another remains in suspense as long as the contract is in fieri. But when the contract is performed by actual conveyance, or performed in everything but the mere formal act of sealing the engrossed deeds, then that completion relates back to the contract, and it is thereby ascertained that the relation was throughout that of trustee and cestui que trust. That is to say, it is ascertained that while the legal estate was in the vendor, the beneficial or equitable interest was wholly in the purchaser. [at 13; emphasis added]
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