Failure to Fulfill Fiduciary Obligation Can Result in Breach of Contract
Breach of contracts happen in personal life as well as in business. When a party fails to uphold their end of an agreement a breach of contract occurs. This is also the case for when a business is formed with a partner. In a partnership, both parties have a fiduciary duty as they rely on each other to do their part to work towards and reach goals for their business.
What is a fiduciary?
According to Florida Statute 673.3071, in part, a fiduciary is a partner or other representative owing a duty with respect to an instrument.
When a partner fails to fulfill their fiduciary obligation to the other party, and/or the business, this can result in breach of contract. If you are the victim of a breach of contract, let a West Palm Beach Contracts attorney at Kelley, Fulton & Kaplan fight for your rights, so you can move on with your business.
Fiduciary Obligation in Shareholder & Partner Disputes
Forming a business such as a partnership with one partner or several partners is a serious venture that requires real duties to your fellow partners. Each partner has a fiduciary duty. In Florida, the fiduciary duty is a relationship where a person places trust in another for the affairs of the business.
Unfortunately, at some point, a conflict can arise when a partner’s actions contradict their fiduciary duty to the business and/or to the other partner(s).
According to an article published by the Florida Bar Association (below), the most basic duty of a fiduciary is the duty of loyalty. Common reasons why breaches of that duty of loyalty take place include the following:
- Misuse of business property
- Disagreement on business goals and objectives
- Finances (misappropriation of funds and income disputes)
- Overstep of boundaries (disrespect for partner’s expertise and authority)
The above shareholder and partner disputes can result in a breach of fiduciary duty as well as breach of contract claim.
How to Prevail on Breach of Contract Claim
When someone forms a business with another, it is important that they understand their rights when a breach of contract occurs. When deciding to pursue a breach of contract claim, it’s important to speak with an attorney to help evaluate all options and approaches.
To prevail on a breach of contract claim in Florida, according to the report in the Florida Bar Journal, three things must happen:
- A contract must exist
- A breach must exist
- Damages must exist
The party filing the breach of contract claim may be entitled to financial compensation and other legal remedies as determined by the court. The prevailing party can only recover attorneys’ fees if there is a provision within the contract that specifically states that attorney’s fees and costs are recoverable in the event legal action occurs.
Contact Our Experienced West Palm Beach Breach of Contract Attorney for Disputes
If you’re in a dispute over the terms of a contract, or in a dispute with your business partners, the West Palm Beach breach of contract attorneys at Kelley, Fulton & Kaplan will work in your best interest and ensure you protect your rights. Contact us for a consultation at 561-264-6850.