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Ashburn Anstalt v Arnold [1989]

This case attempted to reverse the rule that prospective certainty is required in the creation of a lease in favour of retrospective certainty. It was reversed in Prudential Assurance v London Residuary Body [1992], upholding the original rule in Lace v Chantler [1944].

The case is, however, good law for the proposition that a contractual licence cannot bind successors, unless a constructive trust is created as a result of that licence. A constructive trust will be created where the conscience of a purchaser is affected, and will require more than mere disclosure of a licence. Paying a lesser purchase price may be a factor capable of affecting a purchaser’s conscience.

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