Partnership & Fiduciary Duty Disputes

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What Is a Breach of Fiduciary Duty?
A breach of fiduciary duty happens if a fiduciary behaves in a manner that contradicts their duty, and there are serious legal implications. It is also easier to prove a breach of fiduciary duty as there is no need to prove fraudulent or criminal intent. A breach of fiduciary duty is serious and complex. Knowing specifics and examples is imperative for better understanding.  

Fiduciary Duty

It is important to understand what is meant by "fiduciary duty" and the legalities behind it. A fiduciary duty is a duty or responsibility to act in the best interest of someone else. The person who is duty-bound to another person, in a fiduciary relationship, is called a fiduciary. The fiduciary is responsible for the management and protection of either money or property for another person or business. A board member's fiduciary duty to the company's shareholders, or a trustee's duty to the beneficiaries of the trust, or an attorney's fiduciary duty to their client, are all examples of fiduciary duty in action. In order for a fiduciary duty to be legally binding, the agreement must be created under the law, by statute or contract, or by factual circumstances of the relationship, such as being based on case law. A fiduciary duty is in place when a relationship with a client calls for unique trust, or dependability, on the fiduciary to be discrete when acting on behalf of said client. The fiduciary is obliged to act and has the power to act on behalf of, and for the benefit of, the client.

When there is an agreement between one person and another, in a fiduciary relationship, it is a breach of fiduciary duty for the fiduciary to behave in any manner that would be construed as against the best interests of the client. This includes behavior that would benefit the fiduciary with regards to the subject being dealt with. The fiduciary is further obliged to act, for the client, with their fullest capability and care.

A fiduciary is expected to behave with the highest standard of integrity and transparency and may not, in any way, benefit personally at the client's expense.

If not properly addressed, such disputes have the potential to destroy a successful business. If you believe that a disagreement with your business partner has the potential to devolve into a dispute where legal counsel will be needed, or if the situation has already escalated to that stage, you should consult with a knowledgeable corporate litigation lawyer as soon as possible.

At Claim Central, our team of skilled Alberta corporate commercial lawyers has years of experience advising directors, officers, and partners of corporations. We have assisted business owners of companies of various sizes and across various industries, from small start-ups to large national organizations. We provide guidance on partnership issues and represent our clients in any disputes that may arise within a corporation.