Fiduciary involves legal duties and obligations between partners, businesses and clients, and corporations and their employees. There is payment to perform these fiduciary duties. For example, clients hire a money manager to look after the client’s financial interests. It can be employees or board members at a company working (or not working) to advance the business’s profitability. A certain level of trust is involved, but in some instances, contracts or legal agreements will outline legal fiduciary duties and obligations.
Breaching that contract
There may be instances where one individual or group accuses another individual or group of breaching their fiduciary duty. Common questions when determining a breach include:
- Did fiduciary duty obligate them at the time of the potential breach?
- Were they acting in their own best interests rather than the company’s or client’s?
- Were they acting in the best interests of a business’s competitor?
- Did they profit at the expense of the employer or client?
- Did they fail to perform their duties at the expected standards?
What are the consequences?
Unless the case involves fraud or another illegal activity, this will be handled in civil court or by a format outlined in the contract. The nature of the breach and the contract will help determine the consequences. The plaintiff might be able to receive compensation for indirect or indirect damages if the defendant breached their fiduciary duty. However, even if there is a breach, the two will likely differ over the amount of damage it caused. The defendant would also be responsible for both sides’ legal costs if they lose the case. All these variables and others specific to the breach often make these cases quite complicated, so it generally best to discussed specifics with someone who handles these types of matters.
