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Break of fiduciary duty

Many corporations in Florida place their trust in another party in order to grow their business. Once an agreement is reached between a company and another person, there should be an expectation of trust. According to Cornell Law School, fiduciary duty is the responsibility of a person who has been entrusted with the care of a business or corporation to act in the business's best interests. The fiduciary may violate the duties of fiduciary trust in a variety of ways, but the primary breaches involve lack of loyalty and care.

A breach of the duty of loyalty involves failure to pursue the beneficiary's best interests. This could involve the fiduciary cheating the business in order to make a personal profit. It could also entail an abuse of power. The fiduciary may be guilty of breach of duty even if the business does not suffer financial loss. Duty of care requires fiduciaries to pursue the company's best interests by doing careful research before making changes which could affect the business. Other areas in which fiduciaries are responsible to their beneficiaries include disclosure and confidentiality. Disclosure ensures that the fiduciaries do not withhold vital information from interested parties within the corporation, while confidentiality requires that they not divulge sensitive information publicly. Fiduciaries should also be expected to perform their duties with wisdom and reasonable skill.

The American Bar specifies that a breach of fiduciary duty could result from either action or negligence. Failure to devote enough attention to the company, resulting in poor business dealings, could constitute a breach. On the other hand, actively taking steps which are detrimental to the beneficiary may also be prosecuted. However the breach occurs, the issue at hand is the failure to perform duties which promote the best interests of the company at hand, rather than those of the fiduciary.

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