Breach of Fiduciary Duty Cause of Action

A breach of fiduciary duty may occur if a partner engages in activities that are harmful to the partnership or if the partner fails to fulfill their obligations under the partnership agreement.

Examples Of Breach of Fiduciary Duty

Examples of breaches of fiduciary duty can include self-dealing, embezzlement, misappropriation of partnership assets, or unauthorized actions that cause harm to the partnership.

If a partner is found to have breached their fiduciary duty, they may be liable for damages and may even be forced to dissociate from the partnership. It is important for partners in a business to understand and fulfill their fiduciary duties and for the partnership to have clear policies and procedures in place to help prevent breaches.

How Are Breaches of Fiduciary Duty Proven?

To prove a breach of fiduciary duty in a business partnership lawsuit, the following elements must be established:

Existence of a Fiduciary Relationship:

A fiduciary relationship exists between partners in a business partnership, requiring the partners to act in good faith and in the partnership’s best interests.

Duty Breached:

The partner accused of a breach of fiduciary duty must have had a specific duty that they failed to fulfill.


The breach of duty must have caused harm to the partnership or another partner.


The harm caused by the breach of duty must be quantifiable as actual damages.

What Are Remedies for a Breach of Fiduciary Duty?

A breach of fiduciary duty occurs when a person in a position of trust, such as a company director or officer, violates their duty to act in the company’s or its shareholders’ best interests. When a breach of fiduciary duty occurs, the court has several remedies available to rectify the situation. Some of the possible remedies include:


The court may order the rescission of the transaction that constitutes the breach of fiduciary duty, effectively undoing the transaction and restoring the parties to their original positions.


The court may award damages to compensate the company or its shareholders for any losses suffered as a result of the breach of fiduciary duty.

Ordering an Accounting:

The court may order an accounting of the transaction that constitutes the breach of fiduciary duty, including an examination of all relevant financial records and documents, to determine the full extent of any damages.

Ordering the Disgorgement of Profits:

The court may order the individual responsible for the breach of fiduciary duty to disgorge any profits or benefits they received as a result of the transaction.

Ordering the Removal of the Individual From Their Position:

The court may order the removal of the individual from their position of trust, such as a company director or officer, if it determines that they engaged in a breach of fiduciary duty.

It’s important to note that these remedies are specific to the jurisdiction and the circumstances of each case and the court will carefully consider the facts of each case before determining the appropriate remedy.

Contact Chatow Law For A Free Consultation

We are a business partnership dispute law firm serving clients in Los Angeles County, Orange County and San Diego County. Call us at 949-478-8393 for a free consultation if you believe an owner or partner has breached their fiduciary duty. We can help you assess your legal rights and advise you on your best course of action.