PHAM & CLOVES, PLLC

Fiduciary Duties – Special Relationships

In general, each individual owes other individuals certain duties. Sounds preposterously philosophical, but it is legally true. Ok, more specifically, the creation of duties owed to others is a function of societal mores and accepted precedent. What is a duty owed between Americans may not be a duty owed between members of another nation. What is an example of a duty owed to another? Well, if I am driving my car on the highway, I owe all other drivers on that highway the duty to stay in my lane unless and until it is safe to change lanes. I owe the other drivers on the highway the duty not to collide with their vehicles. The breach of these duties that results in damage is called negligence. If you have been a victim of another’s negligence, contact a Personal Injury Lawyer at Veritas Legal Group, PC to discuss the facts of your case.

Negligence is a cause of action whereby an aggrieved individual can seek recovery from another due to that person’s breach of duty if the aggrieved can prove that his damages were a result of the breach of duty. There are numerous other duties that are legally recognized like the grocer’s duty to keep the floors clear of hazards, the employer’s duty to provide a safe workplace, or the manufacturer’s duty to produce a product that is safe to use as intended. However, there is a special duty called a “fiduciary duty” that is created by virtue of the type of relationship between individuals or between an individual and an entity like a corporation or limited liability company or through an agreement between parties. When parties interact within a fiduciary duty, they consent to be bound by the rules of that type of special relationship.

The cornerstone of a fiduciary duty is the concept of the duties of good faith and fair dealing. The duties of good faith and fair dealing are akin to the duties owed between spouses – to put the other person first. Specifically, the obligor in a fiduciary relationship must hold the interest of the other party in high regard.

Some examples of fiduciary relationships are the lawyer/client relationship, the relationship between business partners; the relationship between officers and directors of corporations and the corporation; and the relationship between a trustee and trust beneficiaries.

In a fiduciary relationship, generally there is an obligor and an obligee. That is, the duty is owed in one direction. However, in the case of business partners, each partner owes the other the special duty.

If you are in a fiduciary relationship and believe that duty may have been breached or if you are unsure if there is a fiduciary relationship that has been formed, contact a Breach of Fiduciary Attorney at Veritas Legal Group, PC at 713-492-0337. Or, simply fill out our online contact form and a Breach of Fiduciary Lawyer will contact you within 24 hours to discuss your case.