There is a wide range of circumstances under which you could enter into a fiduciary relationship with another party. Some fiduciary relationships are created automatically under the law. For example, in accordance with Nevada’s Uniform Fiduciaries Act, partners in a business automatically owe fiduciary duty of loyalty to each other.
The American Bar Association notes that such relationships can also arise out of case law and could be addressed on a case-by-case basis. A court would take several factors into account, specifically whether or not one party places financial trust in a second party with the second party’s knowledge. No matter the specifics, all that is required to demonstrate that relationship is that one party has been bound to act in a fiduciary capacity for a person, a trust or even an estate.
That duty forbids the trusted party to act in any way that would be unfavorable to your best interests. The fiduciary should make every effort to be honest and responsible when acting on your behalf. When that duty is breached, you may have cause to file a claim against the negligent party. In order to prove the breach, you must be able to demonstrate the following three items:
- That the party owed you a fiduciary duty
- That the party breached that duty
- That the breach caused you financial losses
Through pursuing such a claim, you may be able to recover compensation. Depending on the circumstances, such as breach of fiduciary duty on behalf of your business partner, you may be able to have the partner removed.
While this information may be useful, it should not be taken as legal advice.