Watering Down Fiduciary Duties

Abstract

This chapter describes the ways in which fiduciary duties can be watered down. The chapter criticizes these various ways including the rationales supporting them. Thus, fiduciary relationships are posited as contracts. Yet contracts entitle each party to pursue its own interests. Softening this difference, the fiduciary duty of acting in the sole interest of the beneficiaries is posited as a duty to act in the best interest of the beneficiaries. That allows the fiduciary to benefit from the relationships, so long as the beneficiaries’ best interests are also served, and so on. Introducing another discipline (eg, economics) may dilute the burdens of fiduciaries to their beneficiaries. The differences seem minute. The consequences may be catastrophic. This is the message of this chapter.

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