Fiduciary duty

A legal obligation requiring someone entrusted with another party’s interests to act loyally and with appropriate care. It commonly governs relationships in which one party has discretion or power over another’s affairs.

Duty of loyalty: An obligation to put a beneficiary’s interests ahead of one’s own when acting in a fiduciary role. It bars self-dealing and conflicts of interest at the heart of fiduciary responsibility.
Corporate director: A person appointed to help govern a corporation through its board of directors. Directors owe duties to the corporation, especially when approving transactions or overseeing management.
Contract: A legally enforceable agreement that creates obligations between parties. A contract may define a relationship without making every party a fiduciary.
Breach of fiduciary duty: A failure by a fiduciary to satisfy a legal obligation owed to a beneficiary or principal. This is the violation whose proof and consequences depend on the duty and governing law.
Corporate fiduciary duty: The duties corporate directors and officers owe to the corporation under applicable law. Its standards differ across jurisdictions and shape disputes over oversight, conflicts, and corporate purpose.
Duty of care: An obligation to act with the diligence and competence required by a legal relationship or standard. It addresses how carefully a fiduciary must make decisions for another party.
Corporate opportunity: A business opportunity that a corporate fiduciary may be required to offer to the corporation before pursuing personally. Taking an opportunity for personal gain can violate a director’s or officer’s duty of loyalty.
Negligence: A failure to exercise the care that a reasonable person would use under similar circumstances. Negligence concerns unreasonable carelessness; fiduciary breach can instead arise from disloyal conduct.
Disgorgement: A remedy requiring a person to surrender gains obtained through wrongful conduct. Courts may strip a fiduciary of profits from disloyal conduct, even beyond the beneficiary’s proven loss.
Corporate social responsibility: The consideration of a company’s social and environmental effects alongside its economic activities. Debates over corporate purpose ask whose interests directors may or must serve.

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