Sometimes business disputes occur between the business and a person or entity outside the business – such as a customer or supplier. Other times they are between people within the company.
One time these internal disputes can arise is when one person accuses another of breaching their fiduciary duty. But what types of fiduciary duties exist for someone to breach?
The duty of loyalty
Those employed by the business, or who are tasked with representing it, need to show loyalty. If, for instance, they attend a business fair on behalf of the company they cannot stand there handing out business cards for another business venture they are setting up on the sly.
It also applies to business partners. If a business partner is tasked with handling a business deal, they need to try to get the best deal for the company. They cannot, for instance, give a customer who happens to own a car showroom a knock-down price in exchange for that customer giving them a special deal on a car for their spouse.
The duty of care
People also need to exercise a duty of care. If a business partner is tasked with doing research on a prospective acquisition, they need to carry out that task with due diligence. Even if they are secretly dying for another company to buy them out, they need to investigate thoroughly so they can present accurate information to the other partners about how good the offer really is.
A manager in charge of running your store while you are away needs to take proper care to keep things running well. If they can’t be bothered to rotate stock and it leads to you having to throw away products unnecessarily, then you might consider they have breached their duty of care. The same if the person working the late shift fails to close the door properly on their way out and the next day you find someone has walked in through the open door and looted your store.
If you believe someone has breached their fiduciary duty and caused harm as a result, then you may want to explore your legal options to hold them accountable.