A fiduciary duty may seem like a contract to you, but you should know that a contract and a fiduciary are two diverse terms. A fiduciary duty instructs or binds an individual to act in the best interest of another party. For example, a doctor or a lawyer has a fiduciary duty to a client. Or one can also say that, an estate executor has a fiduciary duty to the beneficiaries of the estate. And so on.
The individual whom a fiduciary owes his or her obligation can be regarded as the beneficiary or principal. It is the job of the fiduciary to ensure that all he or she does is for the best interest of the principal, anything less than that could result in a breach. A breach of fiduciary is a serious offence and should be avoid at all cost.
A breach of fiduciary usually happen when a fiduciary acts in a way that doesn’t conform to their obligation. Such breach is often accompanied by severe legal implication. This type of breach is nothing like a breach of contract, it is way more complex and serious. Because it is the duty of the fiduciary to uphold or work in the best interest of the principal, he or she will have to ensure that the property, money, etc., of the principal is well managed and protected.
A fiduciary has an obligation to perform two simple duties to the principal, these duties are, a duty to care and a duty of loyalty. The fiduciary must be loyal in the sense that, all he or she does should be in the interest of the client and not for his or her personal gains or interest.
Examples of Fiduciary Duty
There exist numerous examples of a fiduciary duty and they are quite common. There is the fiduciary obligation of a doctor to his patients, the duty of an employer to his or her employee, and so many others. A fiduciary duty needs a legal force behind it, this it has to be made under the law.
When two individuals enter into a fiduciary agreement, and the fiduciary behaves in a way that is against the interest of the principal, it can be said that the fiduciary duty has been breached. If the fiduciary acts in his interest rather than that of the principal, it can also be said that there is a breach. Thus, it is the duty of the fiduciary to ensure that all he does conforms to the interest of the principal.
Also, a fiduciary is to ensure that he acts with upmost integrity, and should not in any way derive personal benefit at the expense of the client.
What is a breach of Fiduciary Duty Florida?
Based on Florida Law, a fiduciary duty exists when an individual trust a person to carry out an obligation which could be a certain transaction or something related to his or her affairs; and a breach occur when the fiduciary does something that goes against the interest of the principal.
When a breach of fiduciary happens, a lawsuit can be filed by the principal. Such lawsuit will only go ahead in a court in Florida provided the complainant is able to prove that there was a fiduciary agreement between the two parties where one of the parties chose or accepted to act in the best interest of the other.
Legally, the principal can claim for damages including profit earned by the fiduciary as result of the breach. A breach of fiduciary is a very serious case, thus, anyone found guilty of such offence doesn’t only have his or her finances in the line, but such a person reputation will also be smeared.
Because we are humans, and as we all know, we make mistakes. There are instances where the fiduciary duty is breached inadvertently. In a case as such, it will still be treated as a violation of ethics and the law will take its course should the case be brought before the court.