Also known as: relations of trust and confidence · fiduciary relation
Written by attorneys · grounded in primary & secondary sources — see below
A relationship between parties in which one is entitled to expect the other to disclose material facts and to treat opinions as reliable assurances.
Ryan Roberts instructs Radiant Technologies to handle all supplier negotiations during his absence. Radiant Technologies agrees and begins contacting vendors on his behalf without further oversight discussions. The arrangement satisfies the requirements for creating the relationship because Ryan manifested consent for representation and Radiant Technologies accepted the role.
Rina Rahman has relied on Reliance Insurance for fifteen years to manage her retirement accounts. Reliance Insurance learns of serious internal liquidity problems yet urges her to purchase a long-term illiquid product without disclosure. The relationship entitles Rina to know the facts, so nondisclosure supports her misrepresentation claim.
Select any source to read its text and confirm it supports the definition.
Rita Russell has been Dr. Ricardo Rojas's patient for twenty years and trusts his judgment on all matters. Dr. Rojas urges her to invest in his struggling clinic while describing it as risk-free in his medical and business opinion. The relationship makes her reliance on the opinion justified despite its form.
Riley Rivera has long served as Rosalind Reed's estate-planning attorney. Riley recommends that Rosalind invest heavily in an LLC Riley owns and asserts in his legal and business opinion that the venture is virtually riskless. The relationship renders Rosalind's reliance on the opinion reasonable.
Radiance Media's financial adviser has controlled retiree Ryan Roberts's accounts exclusively for fifteen years. The adviser learns of the firm's serious liquidity problems but urges Ryan to buy a long-term illiquid product issued by the firm without disclosure. The relationship creates a duty to reveal the facts before the transaction.
Rina Rahman avoids a contract with Reliance Insurance after discovering the representative abused their advisory relationship by concealing trial data. She had conferred benefits through part performance before avoidance. The relationship supports her right to restitution of those benefits.
Reliance on an opinion becomes justified when the speaker stands in a fiduciary or similar relation of trust and confidence to the recipient and the opinion concerns a material matter. The relationship allows the recipient to treat the opinion as a trustworthy assurance rather than mere puffery. Courts examine the pattern of prior dealings and the speaker's role in the recipient's decisions.
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Yes. One party must disclose facts the other is entitled to know because of the relationship. The duty arises even in business transactions when the trusted party possesses information that could influence the other's decision. Silence in that setting can constitute actionable nondisclosure.
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The relation justifies reliance on opinions that would otherwise be nonactionable, satisfying an element of misrepresentation. Once justified reliance is shown, the contract becomes voidable. The avoiding party may then obtain restitution of benefits conferred through part performance.
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Yes. A pattern of repeated advisory contacts and dependence can create the relation even in commercial settings. Courts look to the cumulative conduct rather than labels or formal documents. The key is whether one party reasonably expects the other to act with candor and in the first party's interest.
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…Less tangible than “good will” it is never included in the tenant’s assets, yet equity will not permit one standing in a relation of trust and confidence toward the tenant unfairly to take the benefit to himself. At times the principle is rigidly enforced. Given the relation between the parties,- a certain result follows. No question as to…