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Litigating a breach of fiduciary duty

| Jul 10, 2022 | Business Litigation

Fiduciary duties cover ethical, financial and social grounds. According to Texas statutes, a fiduciary is any representative that owes a financial responsibility to another party. A party that believes a breach occurred must file a notice of the breach of duty.

Breaches of financial contracts do not always happen maliciously. However, in the eyes of the law, this does not matter. Continue reading to learn more about fiduciary duties and how business litigation works.

Proving a breach of duty

To prove a breach occurred, plaintiffs must demonstrate several things. As stated above, Texas courts do not care about intent when it comes to contract law. However, this goes both ways. You must prove that a relationship exists with fiduciary responsibilities between the two parties. Additionally, you must confirm your injuries resulted from a breach in that relationship. Fiduciary cases have an ethical element, but feeling wronged is not enough to establish a breach of duty. The courts must see that a contract was somehow violated.

Defense for breach of duty claims

You have several options to defend against a breach of fiduciary duty claim. First, you may have evidence that you acted in the client’s best interest. If the issue is that you did not act transparently, you need to demonstrate that you disclosed your actions to the client beforehand. Finally, you might have evidence that the fiduciary duty terminated before the alleged breach occurred.

Sometimes even the most well-executed contracts become murky and difficult to interpret. It is up to the fiduciary to act in the best interest of their clients, but sometimes breaches occur due to ignorance or conflicts of interest.