BREACH OF FIDUCIARY DUTY
Fiduciary duty is a legal term of art that describes the relationship between two parties and obligates one to act in the interest of another. In a fiduciary relationship, there is a strict legal obligation of the fiduciary to act in the best interest of the principal and ensure that there are no conflicts of interest. Knowing that you have a fiduciary duty to another, and under what circumstances you could breach that duty, is important for any business transactions you may have. At Thaler Law, our team of experienced business attorneys can help you understand your rights regarding fiduciary law.
WHAT IS FIDUCIARY DUTY
A fiduciary obligation, by definition, exists when there is a specific trust, reliance, or confidence placed in the fiduciary by a client or principal. The principal relies in some way on the experience or knowledge or position of the fiduciary. The fiduciary has accepted that trust through some sort of binding agreement and must then act on his/her client’s behalf. Acting contrary to the best interests of the client or principal, or in their own self-interest, breaches the relationship and can be the grounds for legal recourse.
ELEMENTS OF A FIDUCIARY CLAIM
There are four elements you must meet in order to bring a fiduciary duty claim. An experienced business law attorney can help you understand these laws and if there has been a fiduciary breach. The four elements are: Duty, Breach, Causation and Damages.
In a fiduciary duty case, you must prove the following:
- There was a specific duty that the fiduciary had towards the principal
- The fiduciary breached that duty toward the principal
- The breach of care by the fiduciary caused the principal to suffer damages
- The principal suffered actual damages as a direct result of the fiduciary breach
Ultimately, a fiduciary has the responsibility to act in good faith with full disclosure and loyalty to the principal or client. If the fiduciary breaches its duty to the client in any way and this directly causes the client to suffer damages, there could be potential for legal recourse.
EXAMPLES OF A FIDUCIARY BREACH
While every case will be different, some examples of a fiduciary breach towards a client or principal include:
- Failure to handle a client’s funds appropriately and within all contractual obligations
- Failure to disclose information legally required to be disclosed
- Misappropriation of property or funds
- Handling a client’s money negligently
- Misrepresentation with respect to documents, contracts, funds, or other legally required obligations owed to the principal or client
- Misuse or abuse of a position of influence by the fiduciary
CONSEQUENCES OF A FIDUCIARY BREACH
While every case is different, if you are a client or plaintiff who has been the victim of a fiduciary breach of duty, you have several legal options available to you. You may attempt to recover both actual damages and punitive damages from the fiduciary. The calculation of damages (both actual and punitive) can oftentimes be quite complex, and it is recommended that you contact an experienced business law attorney.
ADVOCATES YOU CAN TRUST
Determining if a fiduciary obligation and/or duty was breached is a difficult one, full of complex legal issues. Consulting an experienced business law attorney can help you understand your rights. At Thaler Law, we will help you understand your options, and help you navigate your way through the complicated legal issues regarding fiduciary law. Contact us at 714-869-2900 or online today for a consultation.