Remedies (Breaches of fiduciary duty - FS Flashcards
(10 cards)
What is the general remedy when a fiduciary makes a profit through a breach of duty?
The fiduciary is liable to pay back all profits made from the breach to the trust.
What is a rescission in the context of fiduciary breaches?
Rescission is a remedy that cancels the transaction and restores the parties to their original positions, where possible.
When is rescission not available as a remedy for breach of fiduciary duty?
Rescission is not available if the transaction involved an innocent third party or if the parties cannot be restored to their original positions.
What is a personal claim in breach of fiduciary duty?
A personal claim seeks to compel the fiduciary to pay the full value of the unauthorized profit to the trust from their personal funds.
Does a personal claim consider any profit lost by the trust due to the breach?
No, a personal claim focuses only on recovering the unauthorized profit, not any lost potential profit.
Can a personal claim be made even if the breach results in a gain to the trust?
Yes, the beneficiaries can still pursue a personal remedy even if the breach benefited the trust.
What is a proprietary claim in the context of fiduciary remedies?
A proprietary claim aims to recover specific property acquired through the breach, rather than its monetary equivalent.
Why might a beneficiary prefer a proprietary claim over a personal one?
Because it allows the beneficiary to benefit from any increase in the value of the property acquired through the breach.
What is the difference between a personal and proprietary claim in fiduciary breaches?
A personal claim seeks money equivalent to the profit, while a proprietary claim seeks the actual property acquired through the breach.
What is the underlying goal of remedies for breach of fiduciary duty?
To restore the trust to the position it would have been in but for the breach, and to prevent fiduciaries from profiting from disloyal conduct.
