Duty To Exercise Reasonable Care, Skill, and Diligence

2017 ◽  
Author(s):  
Mark Arnold ◽  
Marcus Haywood
Keyword(s):  
Conflicts Of Interest ◽  
Fiduciary Duty ◽  
Reasonable Care ◽  
Duty Of Loyalty

The 2006 Act, s 175, quoted in paragraph 15.09 below, sets out the duty to avoid conflicts of interest. That duty is one of the paradigm manifestations of a director’s fiduciary duty of loyalty to the company. As Lord Upjohn said in Phipps v Boardman: ‘[T]he fundamental rule of equity [is] that a person in a fiduciary capacity must not make a profit out of his trust which is part of the wider rule that a trustee must not place himself in a position where his duty and his interest may conflict.’

16. Directors’ duties

2018 ◽  
Author(s):  
Derek French
Keyword(s):  
Conflicts Of Interest ◽  
Third Parties ◽  
Fiduciary Duty ◽  
Reasonable Care ◽  
Breach Of Duty ◽  
Secondary Liability

This chapter deals with the seven general duties of directors as spelled out in the Companies Act 2006: duty to act within powers; duty to promote the success of the company; duty to exercise independent judgement; duty to exercise reasonable care, skill and diligence; duty to avoid conflicts of interest; duty not to accept benefits from third parties; and duty to declare interest in proposed transaction or arrangement. After providing a background on the codification of directors’ general duties, the chapter turns to the fiduciary duty of directors, including shadow and de facto directors. It also examines statutory requirements involving property transactions; loans, quasi-loans and credit transactions; associated companies and persons ‘connected’ with a director; equitable remedies for breach of duty; the ways in which directors can be relieved of liability; and secondary liability with regards to property.

The Fiduciary Duty of Loyalty

2019 ◽  
pp. 383-403 ◽  
Author(s):  
Andrew S. Gold
Keyword(s):  
Conflicts Of Interest ◽  
Fiduciary Duty ◽  
Central Concept ◽  
Common View ◽  
The Core ◽  
The Common ◽  
Duty Of Loyalty ◽  
Fiduciary Relationships ◽  
Default Rules ◽  
Core Features

This chapter addresses the fiduciary duty of loyalty. Loyalty is a central concept in fiduciary law, even as scholars differ on whether we should reason from fiduciary relationships to loyalty obligations, or the other way around. Nonetheless, the common view across jurisdictions and across theories is that loyalty is vital to fiduciary relationships. This chapter first provides an overview of the core features of fiduciary loyalty, with particular emphasis on the no-conflict rules, which have two basic components: a rule against conflicts of interest and a rule against conflicts of duty. It then considers the no-profit rule and how it relates to the rules against conflicts of interest, along with duties of good faith and disclosure and the link between fiduciary loyalty and other obligations. It also discusses remedies that are generally associated with breach of loyalty, including the disgorgement remedy, as well as specific contexts that modify the effect or scope of fiduciary loyalty obligations (for example, contractual modifications of legal default rules or cases where there are multiple beneficiaries), and additional factors that affect application of the fiduciary duty of loyalty. The chapter concludes with an analysis of theories that explain fiduciary loyalty as a category.

16. Directors’ duties

2017 ◽  
Author(s):  
Derek French
Keyword(s):  
Conflicts Of Interest ◽  
Third Parties ◽  
Fiduciary Duty ◽  
Reasonable Care ◽  
Breach Of Duty ◽  
Secondary Liability

This chapter deals with the seven general duties of directors as spelled out in the Companies Act 2006: duty to act within powers; duty to promote the success of the company; duty to exercise independent judgement; duty to exercise reasonable care, skill and diligence; duty to avoid conflicts of interest; duty not to accept benefits from third parties; and duty to declare interest in proposed transaction or arrangement. After providing a background on the codification of directors’ general duties, the chapter turns to the fiduciary duty of directors, including shadow and de facto directors. It also examines statutory requirements involving property transactions; loans, quasi-loans and credit transactions; associated companies and persons ‘connected’ with a director; equitable remedies for breach of duty; the ways in which directors can be relieved of liability; and secondary liability with regards to property.

16. Directors’ duties

2019 ◽  
pp. 458-518
Author(s):  
Derek French
Keyword(s):  
Conflicts Of Interest ◽  
Third Parties ◽  
Fiduciary Duty ◽  
Reasonable Care ◽  
Breach Of Duty ◽  
Secondary Liability

This chapter deals with the seven general duties of directors as spelled out in the Companies Act 2006: duty to act within powers; duty to promote the success of the company; duty to exercise independent judgement; duty to exercise reasonable care, skill and diligence; duty to avoid conflicts of interest; duty not to accept benefits from third parties; and duty to declare interest in proposed transaction or arrangement. After providing a background on the codification of directors’ general duties, the chapter turns to the fiduciary duty of directors, including shadow and de facto directors. It also examines statutory requirements involving property transactions; loans, quasi-loans and credit transactions; associated companies and persons ‘connected’ with a director; equitable remedies for breach of duty; the ways in which directors can be relieved of liability; and secondary liability with regard to property.

16. Directors’ duties

2021 ◽  
pp. 454-514
Author(s):  
Derek French
Keyword(s):  
Conflicts Of Interest ◽  
Third Parties ◽  
Fiduciary Duty ◽  
Reasonable Care ◽  
Breach Of Duty ◽  
Secondary Liability

This chapter deals with the seven general duties of directors as spelled out in the Companies Act 2006: duty to act within powers; duty to promote the success of the company; duty to exercise independent judgement; duty to exercise reasonable care, skill and diligence; duty to avoid conflicts of interest; duty not to accept benefits from third parties; and duty to declare interest in proposed transaction or arrangement. After providing a background on the codification of directors’ general duties, the chapter turns to the fiduciary duty of directors, including shadow and de facto directors. It also examines statutory requirements involving property transactions; loans, quasi-loans and credit transactions; associated companies and persons ‘connected’ with a director; equitable remedies for breach of duty; the ways in which directors can be relieved of liability; and secondary liability with regard to property.

16. Directors’ duties

2016 ◽  
Author(s):  
Derek French ◽  
Stephen W. Mayson ◽  
Christopher L. Ryan
Keyword(s):  
Conflicts Of Interest ◽  
Third Parties ◽  
Fiduciary Duty ◽  
Reasonable Care ◽  
Breach Of Duty ◽  
Secondary Liability

This chapter deals with the seven general duties of directors as spelled out in the Companies Act 2006: duty to act within powers; duty to promote the success of the company; duty to exercise independent judgement; duty to exercise reasonable care, skill, and diligence; duty to avoid conflicts of interest; duty not to accept benefits from third parties; and duty to declare interest in proposed transaction or arrangement. After providing a background on the codification of directors’ general duties, the chapter turns to the fiduciary duty of directors, including shadow and de facto directors. It also examines statutory requirements involving property transactions; loans, quasi-loans, and credit transactions; associated companies and persons ‘connected’ with a director; equitable remedies for breach of duty; the ways in which directors can be relieved of liability; and secondary liability with regards to property.

Fiduciary Law, Good Faith, and Publicness

2019 ◽  
pp. 762-779
Author(s):  
Hillary A. Sale
Keyword(s):  
Case Law ◽  
Corporate Law ◽  
Good Faith ◽  
Fiduciary Duty ◽  
Red Flags ◽  
Corporate Development ◽  
Duty Of Loyalty ◽  
Trust Law

This chapter uses corporate law as a case study to evaluate the content of the fiduciary duty of good faith. Tracing its development from Van Gorkom through to the present, the chapter shows how good faith, though part of the duty of loyalty, has become a gap filler, policing the space between generally exculpated breaches of care and the more obvious breaches of loyalty. This chapter also surveys good faith case law to show the most common “red flags” for which corporate officers and directors should be monitoring. An analysis of two of the most recent good faith cases—City of Birmingham and In re Wells Fargo—show how the theory of publicness can be used to predict future good faith developments. Finally, the chapter ends by showing that the duty of good faith’s expansion into trust law parallels its corporate development by emphasizing its gap-filler function.

10. The fiduciary duty

2018 ◽  
Author(s):  
Gary Watt
Keyword(s):  
Conflicts Of Interest ◽  
Third Parties ◽  
Good Faith ◽  
Fiduciary Duty ◽  
Fiduciary Duties ◽  
Trust Property ◽  
Fiduciary Relationships ◽  
Strict Rule

The fiduciary duty is the defining duty of trusteeship and consists of several overlapping obligations intended to promote loyalty or faithfulness. As part of his fiduciary duty, the trustee should avoid conflict with the interests of the trust and not to make an unauthorised unauthorized profit from the trust property, or from his position of trust. The fiduciary duty may also apply to a person who is not a trustee, in which case he is said to be a fiduciary. This chapter examines the principal obligations of trusteeship and the implications of breach of those obligations for trustees, beneficiaries, and third parties. It first discusses the strict rule of exemplary fiduciary propriety before turning to the duty of good faith. The chapter also looks at fiduciary relationships and fiduciary duties, the fiduciary duty to avoid conflicts of interest, the fiduciary duty to account for unauthorised unauthorized profits, and trustee remuneration.

Shaping and Re-shaping the Duty of Loyalty in Japanese Law

2019 ◽  
Vol 14 (S1) ◽  
pp. S119-S146
Author(s):  
Eriko TAOKA
Keyword(s):  
Fiduciary Duty ◽  
Duty Of Care ◽  
Fundamental Nature ◽  
Duty Of Loyalty ◽  
Japanese Law ◽  
The Relationship ◽  
Conceptual Relationship ◽  
Corporate Trust

AbstractThe duty of loyalty has been notoriously vague since its introduction into Japanese law. The vagueness of the duty becomes particularly problematic because although the duty overlaps with the duty of care, a breach of each of the duties is subject to different remedial rules. By focusing primarily on duties owed by a trustee and agent, this article attempts to re-define the duty of loyalty and clarify the conceptual relationship between the duties of loyalty and care in Japanese law. The article first explains the current complexity in the scope and nature of the duty of loyalty, and the relationship between the duties of loyalty and care in corporate, trust, and agency laws in Japan. Second, borrowing ideas from Lionel Smith's account of the fundamental nature of the fiduciary duty, this article attempts to re-shape the concept of the duty of loyalty while properly differentiating it from the duty of care in Japanese law.

6. The Implied Terms of the Personal Employment Contract

2018 ◽  
Author(s):  
David Cabrelli
Keyword(s):  
Final Section ◽  
Well Being ◽  
Mutual Trust ◽  
Employment Contract ◽  
Reasonable Care ◽  
Duty Of Loyalty

This chapter first discusses the role played by implied terms of the employment contract. It then turns to the implied terms which impose obligations on the employer. These include the duty to provide work, pay wages, exercise reasonable care for the physical and psychiatric well-being of the employee; the implied term of mutual trust and confidence; and the discretionary benefit implied term and anti-avoidance implied term. The final section covers the implied terms imposing duties on employees. These include the duty to work and obey instructions and orders; the duty to adapt, exercise care, and co-operate; the duty of mutual trust and confidence; and the duty of loyalty, fidelity, and confidence.

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