A fiduciary duty is as varied as a job description. But it is generally regarded as a situation where one individual or party has a professional or business obligation to another individual or party. If the accused party acts contrary to their duties as a board member, CEO, representative, or professional, there could be a breach of their fiduciary duty. They then may have to defend themselves in civil court.
Fiduciary relationships
The term fiduciary generally applies to a relationship between individuals or parties. This relationship is based on trust or confidence, where it is understood that one party has expectations of the other party honoring that relationship. These fiduciary relationships can be formalized using a contract. Thus the party can be held accountable in court for any breach of their relationship.
Common examples of breaches
A breach of one’s duty can involve different areas of dispute:
- Did fiduciary duty exist at the time of the dispute?
- Is the dispute within the boundaries of the fiduciary duties?
- Were these duties breached?
This could involve not sharing important information, using information to advance personal interests over the other party’s interests, or failing to disclose important information that could jeopardize the fiduciary relationship.
Elements of a claim
Breach of fiduciary duty needs proof of the following:
- Duty: There was an obligation to the plaintiff.
- Breach: There was a violation of that duty.
- Damages: There must be financial damage caused by the breach.
Plaintiffs must prove their case
It is generally up to the plaintiff to argue that the defendant violated their understanding. So it is often essential to work with an attorney who understands how businesses work and is skilled at arguing cases in court. These legal professionals will address both the elements of the claim and the specific details of the dispute.