Also known as: fiduciary relations · fiduciary relationship
Written by attorneys · grounded in primary & secondary sources — see below
A relationship arising when one person manifests consent that another shall act on the first person's behalf and subject to the first person's control, with the second person consenting to do so. The first person is the principal and the second is the agent. This relation imposes duties of loyalty and care on the agent.
Felix Franco directs Fabian Flynn to handle all talks with a supplier while Franco is abroad. Flynn agrees and begins emailing the supplier using Franco's instructions. The arrangement satisfies the consent and control elements of the fiduciary relation.
Fatima Flores enters a contract with Farah Fox after Fox abuses their fiduciary relation through undue pressure. Flores later avoids the contract and seeks return of payments made during part performance. The rule allows restitution of benefits conferred because of the abuse.
Select any source to read its text and confirm it supports the definition.
Francesca Fowler as promoter sells property she controls to the future corporation without telling all planned initial investors. After formation the corporation discovers the profit and sues. Full disclosure to every contemplated shareholder is required to avoid liability for breach of the fiduciary relation.
A corporate insider passes material nonpublic information to an analyst who knows the source breached a duty. The analyst tips clients who trade on the information. Liability arises because the insider's breach of the fiduciary relation enables the trading.
Two partners in a joint venture hold a lease used by the business. One partner secretly obtains a renewal for himself alone. The other partner claims the renewal belongs to the venture because the fiduciary relation requires sharing of opportunities within the scope of the enterprise.
An attorney receives confidential deal information while representing a client. The attorney trades on that information without disclosure. The trading violates the fiduciary relation owed to the source of the information under the misappropriation theory.
Consent by the principal that the agent act on the principal's behalf, consent by the agent to do so, and the principal's right of control over the agent's actions are required. The relation arises from these manifestations even without a written agreement or compensation.
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A party who avoids a contract on grounds including abuse of a fiduciary relation may recover benefits conferred through part performance or reliance. The right exists only if restitution would be available had the contract been enforceable.
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A promoter must make full disclosure of any secret profit to all persons contemplated as original investors and obtain their approval. Disclosure to only some initial subscribers is insufficient to prevent recovery of the profit by the corporation.
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No. The relation forms through manifestations of consent to act on behalf and subject to control. Neither a writing nor payment is necessary.
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…and confidentiality, defrauds the principal of the exclusive use of that information. In lieu of premising liability on a fiduciary relationship between company insider and purchaser or seller of the company's stock, the misappropriation theory premises liability on a fiduciary-turned-trader's deception of those who entrusted him…