Business relationships can be difficult for the layperson to understand because the terminology used when speaking of these relationships is often complex and confusing. Those that go into business together have certain responsibilities to one anther depending on the nature of the relationship. All businesses are comprised of individuals that are responsible for ensuring that the business thrives on a financial level. People are entrusted with a degree of autonomy to make sound business decisions for the sake of the company as well as for shareholders, the owners and the like. Each trustee of a business has certain duties to which they must adhere.
Business decisions and the way that they follow through with those decisions can have an impact on laypersons. For instance, there is pending legislation that would mandate a fiduciary relationship between an investment advisor/professional and their customer. Specifically when dealing with retirement funds and investments, people tend to rely on and put their faith in those who have the expertise in handling such matters with the expectation that their money will be safe.
A fiduciary duty exists in a number of business relationships. This duty provides that one party is obligated to act in the best interest of another party throughout the duration of the relationship. The fiduciaries are bound to ensuring that the principle's interests are always protected and advanced where appropriate. This also implies that the fiduciary will not ever act in contravention to the needs of the principal unless expressly given consent to do so. Breach of a fiduciary relationship is against the law.
Creating a fiduciary relationship between two people in a business type of environment is recognized by the courts and is therefore legally enforceable.
Source: The New York Times, "Making Brokers Toe the Mark," Tara Siegel Bernard, Feb 13, 2015
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