A fiduciary duty is a legal obligation to act in the best interest of another person. This duty is often found in relationships like attorney-client, doctor-patient, and trustee-beneficiary. It can also be a relationship between or within companies.
When a fiduciary breaches this duty, it can have serious legal and financial consequences.
What is a breach of fiduciary duty?
A breach of fiduciary duty occurs when a person in a position of trust fails to act in the best interest of another person. This can involve actions like:
- Misappropriation of funds: Stealing or misusing funds belonging to another person.
- Conflict of interest: Putting one’s own interests ahead of the interests of the person they are representing.
- Negligence: Failing to exercise reasonable care and diligence in fulfilling their duties.
- Breach of confidentiality: Disclosing confidential information without authorization.
Understanding what a breach is can help you assert your rights.
Remedies for a breach of fiduciary duty
If a breach of fiduciary duty occurs, the injured party may seek legal remedies. These remedies can include:
- Monetary damages: Compensation for financial losses suffered as a result of the breach.
- Equitable relief: Court orders that require the breaching party to take specific actions, such as returning stolen property or paying back misappropriated funds.
- Rescission: Cancellation of a contract or transaction that was entered into due to the breach.
In some cases, courts may award punitive damages to punish the breaching party and deter similar conduct in the future.
Texas law and fiduciary duty
Texas law recognizes fiduciary duties in various relationships, including trustees, executors, and corporate officers. If you believe a breach of fiduciary duty has injured you, it is important to consult with an attorney to understand your legal rights and options. You need to be aware that the Texas statute of limitations for these types of suits is four years.
Moving forward
Understanding the concept of fiduciary duty and its potential consequences is necessary for protecting your interests. If you suspect a breach of fiduciary duty, take appropriate action and safeguard your rights.
