After a few drinks, long-married couples might tell you that a successful marriage is a lot like a successful business partnership. Drunk or sober, and for better or for worse, it stands to reason that an unsuccessful business partnership is a lot like an unsuccessful marriage. Disagreements about money are inevitable, but it is the betrayal of trust that can tank business partnerships as surely as it destroys marriages. Unlike in marriage, the law outlines things that business partners should be able to trust each other not to do. Engaging in certain types of business relationships implies a promise to act in the other party’s best financial interests; this implicit promise is called fiduciary duty. Breach of fiduciary duty is not the same thing as breach of contract, even though they often overlap. It is possible for someone to breach their fiduciary duty even if they have followed the provisions of the contract to the letter. If you are involved in a business dispute because of a business partner’s breach of fiduciary duty, contact a Santa Fe breach of fiduciary duty lawyer.
Examples of Fiduciary Duty
Many types of professional relationships entail a fiduciary duty, and New Mexico case law has gone into many details about this. These are some examples of fiduciary duty you may encounter in the business world:
- The duty of business partners toward each other
- An attorney’s duty toward his or her clients
- In probate, a personal representative’s duty toward the estate
- A trustee’s duty toward the trust
- The duty of participants in a joint venture toward each other
- The duty of homeowner’s association board members toward the homeowners
- In a power of attorney relationship, the agent’s duty toward the principal
- A bank’s duty toward its account holders
What Should You Do if Your Business Partner Knowingly Caused You Financial Harm?
It is a breach of fiduciary duty if your business partner causes the business to suffer financial losses by knowingly and intentionally engaging in actions to which you did not consent. (It is not a breach of fiduciary duty if financial decisions that the partners made jointly lead to financial losses.) In this case, you can file a lawsuit against your business partner. The court may order your partner to compensate you for the financial losses he or she caused and also to pay additional damages.
Is Breach of Fiduciary Duty a Crime?
New Mexico does not categorize breach of fiduciary duty as a criminal offense, but some financial crimes amount to a breach of fiduciary duty writ large. For example, if your business partner is facing criminal charges for embezzlement, you probably have a strong case for breach of fiduciary duty in civil court, even if your partner does not get convicted of the embezzlement charges.
Contact Slate Stern About Business Disputes
Slate Stern is a business litigation lawyer who represents plaintiffs in breach of fiduciary duty cases. Contact Slate Stern in Santa Fe, New Mexico, or call (505)814-1517 to discuss your case.