What is the scope of fiduciary duties in business transactions?
In business transactions, a fiduciary is a person or entity who is entrusted with the responsibility of managing the assets, money, and financial interests of another. Fiduciary duties are the responsibilities that a fiduciary has to act in the best interests of the party they are representing. In North Carolina, the scope of fiduciary duties includes loyalty, disclosure, prudence, care, and obedience. Loyalty requires the fiduciary to be independent and make decisions solely for the benefit of the party being represented. Disclosure demands that the fiduciary provides accurate information to the party in question as needed. Prudence requires the fiduciary to make decisions only when all the facts and options are known. Care requires the fiduciary to use the same degree of care as a reasonable person would in some similar financial circumstances. Finally, obedience requires the fiduciary to follow the instructions of the party being represented. In North Carolina, fiduciary duties must be followed to maintain integrity in business transactions. Fiduciaries must ensure that the best interests of the party being represented are put first. Failing to follow fiduciary duties can have serious consequences. A person or entity found to be acting in a manner inconsistent with fiduciary duties can be held liable for any financial damages resulting from the breach of duty.
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