A.I. Powered: Philippine Bar Reviewer

Question

Question A: General Principles - Trust Fund Doctrine

Scenario:

ABC Corporation is a construction company that entered into a contract with XYZ Corporation to build a commercial property. As part of the contract, XYZ Corporation required ABC Corporation to establish a trust fund to ensure sufficient funds for the completion of the project. ABC Corporation duly complied with this requirement and deposited the necessary funds into the trust fund.

1. Identify and explain the concept of the Trust Fund Doctrine in Philippine law.
2. Discuss the legal obligations and responsibilities of ABC Corporation as the trustee of the trust fund.
3. In the event that ABC Corporation fails to fulfill its obligations as the trustee, what remedies are available to XYZ Corporation as the beneficiary of the trust fund?

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Answer