Also known as: fiduciary duties · fiduciary obligation
Written by attorneys · grounded in primary & secondary sources — see below
A legal obligation of loyalty and care that arises when one person occupies a position of trust and confidence with respect to another. The obligation requires the fiduciary to subordinate personal interests, avoid conflicts, and account for any profits derived from the relationship.
Flora Ford, a member of a member-managed LLC that develops software, learns of a lucrative licensing deal through her role and signs the contract in her individual name. She later assigns the rights to the LLC at a markup. The LLC may require Flora to disgorge the markup because the transaction occurred in the conduct of the company's affairs.
Fatou Fall, the sole general partner of a limited partnership formed to acquire real estate, purchases adjacent land in her own name after the partnership had begun negotiations for the same parcel. The limited partnership may compel Fatou to convey the parcel or account for any appreciation realized.
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Francois Fortier, a partner in a general partnership that installs commercial HVAC systems, submits a bid for a hospital contract using partnership resources and then performs the work through a separate entity he controls. The partnership may recover the profits realized on the project.
Faith Fitzgerald, appointed personal representative of an estate containing undeveloped land, sells the parcel to a corporation she wholly owns without court approval or disclosure to the beneficiaries. Interested persons may surcharge Faith for any loss or require her to reconvey the property.
Fumiko Fujimoto organizes a new corporation to operate a chain of coffee shops and sells her own leasehold interests to the corporation at twice her acquisition cost. She discloses the markup only to two initial subscribers. The corporation may rescind the transaction or recover the undisclosed profit from Fumiko.
Fiona Foster's firm jointly represents an insurer and several family members injured in an automobile accident. After one family member becomes a defendant in related litigation, the firm continues the representation. The court may disqualify the firm because of the prior fiduciary duties and confidential information obtained from the now-adverse former client.
Under the Uniform Partnership Act, a partner's duties of loyalty and care terminate upon dissociation with respect to matters arising after dissociation, except to the extent the partner participates in winding up the partnership's business.
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A personal representative is liable to interested persons for damage or loss resulting from improper exercise of power concerning the estate to the same extent as a trustee of an express trust.
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A promoter must make full disclosure of any profit and obtain approval from all persons contemplated as part of the original financing scheme. Disclosure to only some initial subscribers is insufficient.
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Joint representation may create non-consentable conflicts when a former client becomes a defendant. The firm may be disqualified because of prior fiduciary duties and confidential information obtained from the former client.
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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…