A breach of fiduciary duty claim is common in any business litigation. Each partner(used loosely in this context) in a business venture owes fiduciary duties to the other partners in that venture. These duties require each partner to act within certain standards of care. There are three common examples of a breach of fiduciary duty.
Failure to Disclose. An individual in a business venture is required to disclose all information relating to that business to the other individuals involved. One individual cannot hide information from others involved in the business to attain a personal benefit.
Conflict of Interest. An individual cannot be on both sides of a transaction. For instance, if one owner owns a portion of Company A and a portion of Company B, he generally cannot negotiate a deal between the two companies when there are other ownership interests at stake. The conflict of interest arises because he or she could use his position to create an advantage for one entity or the other that benefits him at the expense of the other owners.
Loyalty, Opportunism. An individual cannot use information he or she acquires by virtue of his position for personal benefit at the expense of the business venture. In addition, an individual may not act to the detriment of the business venture when the purpose of his or her action is for personal gain.
Below are some common situations where a breach of fiduciary duty may occur:
* Breach of duty of care
* Breach of duty of loyalty
* Minority Shareholder disputes
* Partnership disputes
* Insurance disputes