Legal remedies for fiduciary duty breaches in business ownership

Legal remedies for fiduciary duty breaches in business ownership

On Behalf of | May 22, 2024 | Business And Commercial Law |

Breaches of fiduciary duty can cause serious harm to business ownership. The damages can include financial loss and broken relationships. Knowing the legal remedies available can help protect your rights and interests.

Understanding fiduciary duty

Fiduciary duty means that certain individuals must act in the best interest of the business and its stakeholders. This includes duties of loyalty, care, and good faith. Breaching these duties might involve fraud, self-dealing, or neglecting responsibilities.

Legal remedies

Breaches of fiduciary duty often result in litigation. Several legal remedies can address the harm caused.

  • Monetary damages: The court can order the wrongdoer to pay for financial losses resulting from their breach. This compensates the business or affected individuals for the harm done.
  • Disgorgement of profits: If the wrongdoer profited from their breach, the court might order them to return those profits. This prevents individuals from benefiting from their misconduct.
  • Injunctions: The court can issue an injunction to stop ongoing harmful actions. This helps prevent further damage to the business.
  • Rescission: The court can void contracts or transactions made due to the breach. This aims to restore the business to its original position before the breach occurred.
  • Removal from position: In some cases, the court might remove the wrongdoer from their position within the business. This helps ensure they cannot cause more harm in the future.

The consequences of breaches of fiduciary duty are serious to your business. You need to be familiar with the legal remedies available to take action and protect your business.