If you and your Ohio-based business have entered into a partnership, joint venture or agreement with another business only for that business to fail to uphold their ethical responsibility to you as the beneficiary of the agreement, this may constitute a breach of fiduciary duty. But what exactly is a breach of fiduciary duty, and how does it involve you?
The Legal Information Institute at Cornell Law School defines fiduciary duty as an ethical matter in which a fiduciary – often an agent, trustee, or corporation – owes a duty to a beneficiary. When that duty is not fulfilled, the fiduciary may be held accountable for a breach of their fiduciary duty, particularly if they stood to profit from it and subsequently deprived profits from beneficiaries such as you. This can include a partner with controlling interest in a joint venture defrauding their partner of returns on an investment, or can include corporate executives using inside knowledge of business and economic matters impacting their company in order to further their own private interests without the knowledge of trustees and director expecting them to act in good faith for the company.
In essence, fiduciary duty is an ethical obligation to act in the best interests of parties who rely on the fiduciary as a beneficiary, and have placed trust in said fiduciary to act accordingly. When the fiduciary fails to live up to the expectation of good faith, they are considered in breach. If you are the beneficiary of a fiduciary who has breached the ethical contract between you, you may have recourse for legal action.
This is a reference post only and should not be considered legal advice.