Breach of fiduciary duty claims are common in business litigation. Breach of fiduciary duty is a broad concept that may arise in many different business situations. One often hears the terms “breach of duty of care” or “breach of duty of loyalty” in the context of shareholder disputes, partnership disputes or even fraud. Some common breach of fiduciary duty matters in which our Chicago business litigation lawyers address include:
Essentially, there are two types of corporate fiduciary relationships. The first are those fiduciary duties created under the law as applied to a particular relationship governed by statute (such as partner and partnership, director or shareholder and corporation) or as applied to contractual relationships (such as principal and agent or attorney or member and limited liability company). The second are those fiduciary duties that are created as a result of the factual circumstances underlying the business relationship of the parties and/or the corporate business transactions at issue. In any breach of fiduciary duty context, there are a several issues to consider:
Whether a fiduciary relationship existed at the time of the alleged corporate misconduct.
If a fiduciary relationship existed, what was the scope of the fiduciary relationship;
Whether the breach of fiduciary duty and/or corporate misconduct arose within the scope of the relationship.
Addressing these common breach of fiduciary duty issues is only the beginning of the legal analysis. Although there is no universally accepted definition of when a fiduciary relationship arises in a corporate or business context, indications of such a relationship would include the following: the acting of one person for another; the having and the exercising of influence over one person by another; the placement of confidence in one person by another; the dominance of one person by another; the inequality between the parties; and the dependence of one person on another. In addition, the courts have considered weakness of age, mental strength, business intelligence, knowledge of the facts involved or other conditions giving to one an advantage over the other.