Fiduciary Duty
A legal obligation requiring one party to act in the best interests of another with loyalty, care, and good faith.
What is Fiduciary Duty?
Fiduciary Duty is a legal obligation requiring one party (the fiduciary) to act with loyalty, care, and good faith in the best interests of another party (the principal or beneficiary), often arising in relationships like trustee-beneficiary, attorney-client, or corporate director-shareholder.
Why It Matters?
It ensures trust, accountability, and protection in sensitive relationships, holding fiduciaries legally responsible for breaches that cause harm or financial loss.
Example
A corporate board member breaches fiduciary duty by approving a contract that personally benefits them at the expense of the company and shareholders.
Related Terms
Mediation
Litigation