General & Latin

Fiduciary Duty

Also known as: fiduciary obligation

In plain English

A duty to act loyally and in someone else's best interests, putting their interests ahead of your own.

What it means

A fiduciary duty is the highest standard of loyalty the law imposes. A fiduciary must act in good faith for the benefit of another person, avoid conflicts of interest, and not profit secretly from the relationship. In Australia, fiduciary duties arise for company directors, trustees, partners, agents and solicitors, among others. Breaching a fiduciary duty — for example by self-dealing or taking an undisclosed benefit — can lead to the fiduciary having to account for profits or compensate the person they were meant to protect.

How it's used

As trustee, she had a fiduciary duty to manage the estate solely for the beneficiaries, not for her own gain.

Related terms

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