What is a breach of fiduciary duty?

Businesses in Portland, Oregon, depend heavily on trust. At least to some extent, organizations have to trust each other when entering agreements, as no one would enter a contract if they thought the other party had no chance of following it. Likewise, businesses have to trust their employees to do their jobs.

There are some relationships in the world of business, however, where trust is so important that the law offers special protection to those in the relationship, perhaps because they are counting on being able to trust the other person. The law calls these fiduciary relationships.

Among others, fiduciary relationships include the relationship between a corporation's board of directors and shareholders, between business partners, and between the parties in an agency relationship.

In a fiduciary relationship, even if there is no contract or agreement, each party has an obligation to look out for the interests of the other party. This means things like keeping confidences, avoiding self-dealing and, generally, putting the interests of the other party at least on par with one's own goals and desires.

When a member of a fiduciary relationship violates these important obligations, then the other party may pursue a claim for a breach of fiduciary duty via business litigation. A breach of a fiduciary duty is what is called a business tort, which means that, once one proves his or her case, a range of compensation for damages, beyond what one would likely get in a breach of contract case, are available.

A Portland-area business which discovers it has misplaced its trust in a person or organization with which it had a fiduciary relationship may have legal options available to it.

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