Also known as: fiduciary relationship · fiduciary relations · fiduciary relation
Written by attorneys · grounded in primary & secondary sources — see below
A relationship of trust and confidence in which one party is obligated to act for the benefit of another and to refrain from self-dealing. The relation arises when one person manifests consent that another shall act on the first person's behalf subject to the first person's control and the second person consents to do so.
Amanda directed Luis to handle all dealings with harbor officials while she was overseas and Luis agreed to do so. Luis negotiated a revised fee schedule without obtaining Amanda's prior approval on the specific terms. The City of Olympia later sought to enforce the schedule against Amanda on an agency theory.
B entered a contract with A after A abused a fiduciary relation with B. B had paid the full purchase price before avoiding the contract on that ground. B sought restitution of the amount paid after returning the benefit received.
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Marjorie caused the future Blue Therapeutics to license a compound from a venture she secretly controlled on favorable terms. She disclosed the conflict only to one lead investor while other contemplated initial shareholders received no information. The corporation later sought to recover the secret profit.
Rudolph and Benjamin Miller developed business opportunities through entities they controlled while serving as officers of Miller Waste. Plaintiff alleged the opportunities belonged to the corporation and sought an accounting for the profits realized.
An executor diverted estate assets to a personal venture in breach of fiduciary duty owed to the beneficiaries. The beneficiaries sought an accounting and imposition of a constructive trust over the diverted property in probate proceedings.
The relation requires a manifestation of consent by the principal that the agent shall act on the principal's behalf subject to the principal's control together with the agent's consent to act. Absence of any discussion or mechanism for control prevents formation even when consent to act on behalf is present.
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A party who avoids a contract on the ground of abuse of a fiduciary relation is entitled to restitution for benefits conferred by part performance or reliance. The right exists only if the party would have a restitution claim if the contract were enforceable.
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A promoter must make full disclosure of any secret profit to all persons contemplated as part of the original financing scheme and obtain their approval. Disclosure to only some initial subscribers is insufficient and permits the corporation to recover the profit or rescind the transaction.
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No. The relation of principal and agent can be created although neither party receives consideration. An agreement to provide future assignments or exposure in exchange for services satisfies the consent requirement.
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…common-law principle that one entrusted with the active management of a corporation, such as an officer or director, occupies a fiduciary relationship to the corporation and may not exploit his position as an "insider" by appropriating to himself a business opportunity properly belonging to the corporation. If such a business opportunity…