LAW OF FIDUCIARY DUTY

Law of Fiduciary Duty

Law of Fiduciary Duty

Introduction

The law reserves a number of special reports which contains a party who is required to deal with the other party in a very good manner and in the best interest of them. It may be the relationship of the principal and the agent, doctor and patient, lawyer and client, the father and mother and their child, priest and parishioner, associates, and the administrator and his company. All of these relationships involve trust and enforce fiduciary duty on them to act honestly, with good faith and firmly in the best interests of the benefits of these relationships. A test has been developed by the court which identifies if the fiduciary obligations occur in a relationship. Firstly, the trustee might exercise some power or discretion; and secondly, the trustee might exercise that power unilaterally which can have some effects on the recipient. While thirdly, the recipient is in a weak position, since completely depends on the trustee.

Generally, the trustee might not take his own advantage in the opportunities that appear in carrying out their duties. There are some very strict rules that prevent both to take profit and to the conflict of interest that occur beyond those inherent in the relationship. The advantages are forbidden secrets in the form of kickbacks, bribes, profits, undisclosed discounts and commissions, and last but not the least conflict of interest which is related to benefit in the business and other personal advantages to the entitled trust. An advantage which is unacceptable is usually monetary; however, it could be in any form of unacceptable personal advantage.

Fiduciary Duty

Fiduciary duty is the obligations in which the director of the company and the principal create the bond of trust between them which requires the director to act honestly towards the recipient or principal of the duty. On the other hand, as said by the Justice Frankfurter, that “a person is a fiduciary", is only the start of the analysis which indicates the course of the research sequentially to trustee as who he is, and what obligations does he have as a trustee?

The relationships of fiduciary duty are established when two different parties have expectations with each other, mostly in a situation when a person is accountable to the other for protecting his interests. The relationship has often expressed or implied commitments to protect the interests of the other. In proper circumstances, a fiduciary relationship can occur between parties who continue, in all possibility, their own personal interest. It has been held in several decisions that the banks were fiduciaries of their clients. Generally, the trustees have influence or power over legal, practical or economic interests of beneficiaries who are the least susceptible. Legal experts discuss the question of whether the beneficiaries must be at risk and, where suitable, the necessary degree of susceptibility that would allow them to take advantage of this ??law area. Some of the federal and provincial corporate law consists of the provisions which, debatably, ...