What Is Fiduciary Duty?

A fiduciary duty is a legal obligation requiring one party to act in the best interests of another. This duty arises in relationships where one person (the fiduciary) has a position of trust and authority over another (the beneficiary). In business, this could include:

• Partners in a partnership: Partners owe each other a duty of loyalty and good faith.
• Corporate directors and officers: These individuals must act in the best interests of the company and its shareholders.
• Agents or advisors: Financial advisors, attorneys or other professionals must prioritize their client’s needs above their own.

Think of a fiduciary duty as a heightened and legally binding commitment to ‘playing fair.’ It's not just about avoiding harm – it's about actively putting the beneficiary's interests first.

What Constitutes a Breach of Fiduciary Duty?

A breach of fiduciary duty occurs when the fiduciary acts against the beneficiary’s best interests or fails to uphold their responsibilities. A few qualifying scenarios include:

• Mismanagement of Funds: Mishandling or improperly using assets entrusted to the fiduciary.
• Conflicts of Interest: Making decisions that benefit a third party or the fiduciary instead of the beneficiary.
• Abuse of Power: Using their position of authority to gain an unfair advantage or benefit at the expense of the beneficiary.
• Failure to Disclose Pertinent Information: Withholding important details that could impact the beneficiary’s decisions or interests.
• Unauthorized Investments: Making financial decisions or investments without the beneficiary’s consent or contrary to agreed-upon terms.
• Self-Dealing: Using their position to secure personal gain rather than prioritizing the beneficiary’s needs.
• Negligence: Failing to exercise reasonable care or diligence in fulfilling their obligations.

At Tempus Fugit Law, we have extensive experience navigating breaches of fiduciary duty like these, and many others. Our attorneys can help you identify if a breach has occurred, then take appropriate action.

What Are Your Legal Rights?

If you believe someone has breached their fiduciary duty, you have the right to take legal action to protect your business interests. Here’s what to expect:

1. Assess the Situation

Gather documentation or evidence showing how the fiduciary failed in their obligations. This might include contracts, emails, financial records or other relevant materials.

2. Consult Legal Counsel

The right attorneys can help you evaluate the strength of your case, identify the damages suffered and explore the best course of action. At Tempus Fugit Law, we specialize in guiding business clients through these complex disputes.

3. Pursue a Resolution

Depending on your circumstances, this may involve:

• Mediation or arbitration: Seeking a settlement to resolve the issue without going to court.
• Litigation: Filing a lawsuit to recover damages or seek equitable relief, such as removing the fiduciary from their role.

4. Prevent Future Issues

Once the matter is resolved, our team can assist you in implementing safeguards, such as updated contracts, improved oversight and ongoing counsel.

Why Choose Tempus Fugit Law?

Navigating a breach of fiduciary duty doesn’t have to be overwhelming. You can count on us to deliver personalized legal strategies that effectively resolve disputes and protect your interests, whether through negotiation, litigation or preventive measures. For more information check out our article How to Prove Breach of Fiduciary Duty.

Don’t let violations of trust and obligation undermine your hard work. Contact Tempus Fugit Law today for a consultation and take the first step toward safeguarding your rights. Call us at (617) 752-2371, email inquiry@tflawllc.com or contact us here on our website to get started.