Also known as: fiduciary obligation · fiduciary duties · fiduciary duty
Written by attorneys · grounded in primary & secondary sources — see below
Duties of loyalty and care that a person in a position of trust owes to another party or entity. These duties require the fiduciary to account for and hold as trustee any property, profit, or benefit derived from the relationship and to avoid improper self-dealing or conflicts that cause loss.
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Felix Franco, the sole member of a member-managed LLC that develops software, directs company engineers to build an app using the LLC's servers and code libraries for a client the LLC had been courting. Franco then licenses the app through his separate company and keeps the revenue. The other members sue, requiring Franco to account for the profits derived from use of LLC property.
Fumiko Fujimoto, general partner of a limited partnership that processes hazardous waste, directs partnership employees to dispose of chemicals improperly to cut costs and then forms her own LLC to capture the savings. The limited partners discover the violation and seek recovery of the resulting penalties and profits. Fujimoto must account to the partnership for benefits obtained through misuse of partnership resources.
Francesca Fowler, a partner in a law firm, uses firm servers and client lists to develop a competing mobile app at night and licenses it to a firm prospect. The other partners demand an accounting of the license revenue. Fowler must surrender the profits because they arose from use of partnership property during the conduct of partnership business.
Francisco Frost, personal representative of an estate, sells estate shares to his own corporation without disclosure or court approval. The beneficiaries suffer a loss from the below-market price. Frost is liable to the beneficiaries for the resulting damages to the same extent as a trustee of an express trust.
Francois Fortier, promoter of a new corporation, sells his own land to the corporation at an inflated price without disclosing the profit to all contemplated original investors. After incorporation the corporation rescinds the transaction and recovers the secret profit because Fortier failed to obtain full disclosure and ratification from every initial shareholder.
Felicia Fuentes represents both family members and their insurer in a personal-injury suit. When one former client becomes a defendant in related uninsured-motorist litigation, the firm is disqualified because prior representation created non-consentable conflicts arising from confidential information obtained under fiduciary duties.
Yes. The duty of loyalty requires the partner to account to the partnership for any property, profit, or benefit derived from use of partnership assets regardless of when the work occurred or whether the partner also used personal time.
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…and former officers and directors of the two corporations. Heitner alleged that the individual defendants had breached their fiduciary duties by permitting the corporation to engage in certain activities that resulted in antitrust violations and other liabilities. Simultaneously with the filing of the complaint, Heitner filed a…
…we noted the similar prohibitions of the common law, that “even in the absence of a written contract, an employee has a fiduciary obligation to protect confidential information obtained during the course of his employment.” As the New York courts have recognized: “It is well established, as a general proposition, that a person…
…to management. Perhaps the officers or directors of the corporation have the best claim to be the ones speaking, except their fiduciary duties
…history concerning § 207 also demonstrates that Congress paid scant or no attention to whether, in light of its longstanding fiduciary obligation to Indians, it was constitutionally required to afford a reasonable postenactment "grace period" for compliance. [^maj-20]: A statute which denies the affected party a reasonable…
…at 576,989 P. 2d, at 90. It emphasized that the statute “does not alter the nature of the plan itself, the administrator’s fiduciary duties, or the requirements for plan administration.” Id. , at 575, 989 P. 2d, at 90. Nor, the court concluded, does the statute conflict with any specific provision of ERISA, including the…
No. Partnership agreements cannot relieve any person from liability for willful or intentional misconduct or knowing violation of law, so an exculpatory clause attempting to shield such conduct is unenforceable.
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The corporation may recover the secret profit or rescind the transaction because the promoter owes fiduciary duties to the corporation and all contemplated original investors and must obtain their approval after full disclosure.
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A firm may be disqualified when joint representation creates non-consentable conflicts, such as when a former client becomes a defendant and the firm possesses confidential information obtained under prior fiduciary duties to that client.
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The personal representative is liable to interested persons for damage or loss resulting from breach of fiduciary duty to the same extent as a trustee of an express trust.
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