What is a Fiduciary Relationship?

By: admin | Published: January 13th, 2015 | Category: Business Litigation

Your finances and professional life can get flipped upside down if someone you trust rips you off. Once this happens, you have a choice to make. Should you move on and let him or her get away with it, or should you pursue legal action to recover your losses and prevent others from being victimized in a similar manner? There are legal options available and you might be able to get back what you have lost.

A fiduciary relationship is essentially a contract of integrity. It is a transaction between parties in which the fiduciary is legally bound to act in the best interest of the other party. The fiduciary is expected and required to do their best to meet the needs of the recipient. In short, the fiduciary must exercise due care while managing the beneficiary’s affairs.

There are many types of relationships that are considered fiduciary under the law. Some of the technical and legal relationships that involve fiduciary duties include:

  • Attorney and client
  • Business partners
  • Principal and agent
  • Corporate officers and shareholders
  • Husband and wife with shared assets
  • Trustee and beneficiary
  • Guardian and ward
  • Pension fund trustee and beneficiary
  • Executor and estate
  • Joint ventures
  • Controlling shareholder and minority shareholder

Once you have proven that you had a fiduciary relationship, the next step is determining if there was a breach of fiduciary duty. Was there either a breach of reasonable care, a breach of confidentiality, or a breach of duty of loyalty? In order to have a successful lawsuit, you will have to prove that there was the existence of a fiduciary duty, the duty was breached, and that considerable damages resulted from such a breach.

If you are able to prove those three criteria, you may be able to recover damages for lost profits related to the breach. You may even be able to receive support for fees you paid to the fiduciary, profits obtained by the fiduciary while you were their principal and punitive damage. For more information, please contact an experienced Orange County business lawyer.

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