Business Partnerships and Fiduciary Responsibilities

Partners in business have a responsibility to one another and to the profitability and success of their enterprise. In the business world, transactions among and between individuals balance on the legal premise of fiduciary relationships. Although there may be no formal pronouncement of trust between parties, the law recognizes the moral and/or personal responsibility one has when in a position of greater knowledge or training. It holds that, because of that superior knowledge, one holds the confidence of others, and therefore has a fiduciary responsibility to handle affairs with the best interests of partners and the business in mind. In the event that a business partner ignores or offends this responsibility, legal action may be the only remedy to remaining partners. If you believe your business partner has not satisfied fiduciary responsibilities, the experienced and aggressive legal team at The Casper Firm can help you realize a legal remedy.

Duty of Loyalty

A duty of loyalty exists in business partnerships, meaning that partners must act on behalf of the best interests of their partners. Beyond simply acting in good faith, the law requires the fiduciary to abstain from any conflicts of interest. In the event the fiduciary’s personal interest is questioned as a potential conflict with the interests of the partnership, it is incumbent upon the fiduciary to prove that decisions or actions were fair and balanced.

Fiduciary Duty Breach

Because the law states that partner-partner relationships are fiduciary relationships, partners may expect one another to act with regard for the interests of one another and the business. They have, in a very real legal sense, a duty of loyalty to the other partner, in terms of the business relationship; therefore they are obligated to hold the interests of the partner in high regard.

Examples of a breach of this duty include the following:

Surreptitiously acting on behalf of an outside party to the detriment of a partner;
Competing on a matter within the scope of the parties’ relationship;
Sharing confidential information with parties outside the company resulting in a breach of confidence;
Supporting the interests of any party that are in conflict with the interests of the business partner;
Misstating or failing to disclose relevant financial data;
Failing to exercise due care in managing finances or in making recommendations that are financial in nature;
Obtaining profits at the expense of a partner or otherwise failing to disclose personal profits.

Redress After a Breach of Fiduciary Responsibility

Breaching one’s fiduciary responsibilities is a serious offense and may have calamitous consequences for business partners. The effects of such a breach may include financial difficulties, loss of confidence, and a destruction of the client base. As a partner who has suffered due to such unethical violations of trust, you are entitled to seek redress. Contact The Casper Firm today for a free consultation based on the unique issues of your case. Let our knowledgeable team guide you toward the legal resolution you deserve.