It is fiduciary and consensual relationship between two "persons" that allows one to act on behalf of another and an agent to enter into legal relationships on behalf of the principal.
What does fiduciary (trust) relationship mean?
- A relationship in which one party places special trust, confidence, and reliance in and is affected by another party who has a fiduciary duty to act in that party's interest. Also known as relationship of trust.
- That is, one person (agent) agrees to do something for another party (principal) under the other party's control, and the other party (principal) agrees to that consent.
- Examples of trust relationships: Spouse to another spouse, employee to employer, doctor for patients.
What does fiduciary (trust) in ethics mean?
- A duty of loyalty is a legal obligation to act only in the best interest of the other party. "Fiduciary" means a trust and a fiduciary duty bears a legal obligation to maintain that trust.
- A fiduciary relationship occurs when a contract is formed, when a final written agreement defines a fiduciary relationship between two parties, or when a relationship is implied by law and the actions of two parties.
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