When someone you trust puts their interests ahead of yours in a business relationship, you may have grounds for a breach of fiduciary duty claim. These cases continue to rise in Texas courtrooms as business relationships grow increasingly complex.
Whether your company faces harm from a breach or you are an individual accused of violating such duties, understanding these common claims can help protect your interests.
Understanding fiduciary relationships
A fiduciary relationship exists when one party is trusted to act in another’s best interest. These connections are foundational to business operations but can lead to serious disputes when violated.
Texas courts regularly handle cases involving:
- Corporate officers and shareholders
- Business partners
- Trustees and beneficiaries
- Attorneys and clients
- Agents and principals
Before establishing any breach, you must prove that a fiduciary relationship existed and that specific duties were owed. Texas law recognizes both formal fiduciary relationships (established by law) and informal ones (based on special trust).
The top 5 breach claims in Texas courts
Based on recent court decisions, these breach claims appear most frequently in business litigation:
- Self-dealing: When fiduciaries use their position to benefit themselves at the company’s expense. This often involves undisclosed conflicts of interest or transactions primarily benefiting the fiduciary.
- Usurpation of business opportunities: Taking advantage of opportunities that should have been presented to the company. Texas courts look closely at whether the opportunity belonged to the business and if the fiduciary improperly diverted it.
- Misappropriation of confidential information: Using privileged information for personal gain or sharing it with competitors. This includes customer lists, trade secrets and proprietary business methods.
- Failure to disclose material information: Withholding vital facts that would influence business decisions. Texas courts have consistently ruled that transparency is fundamental to fiduciary relationships.
- Negligence in management: Failing to exercise reasonable care in business operations. This claim often arises when fiduciaries make reckless decisions or fail to oversee company affairs properly.
These breaches can result in significant financial damage to businesses and serious legal consequences for the accused fiduciary.
Protecting your rights in fiduciary disputes
Whether bringing a claim or defending against one, taking prompt action is essential in Texas fiduciary cases.
If you believe someone has breached their duty to you:
- Document all relevant communications and transactions
- Secure financial records showing potential damages
- Act quickly, as Texas has specific time limitations for these claims
- Consider whether mediation might resolve the dispute before litigation
If you’re accused of breaching your fiduciary duty:
- Review all contractual obligations and statutory requirements
- Gather evidence showing your actions were in good faith
- Determine if the business judgment rule might apply to your situation
- Assess whether proper disclosures were made
Texas courts weigh both the letter of agreements and the context of relationships when evaluating these business disputes. Knowledgeable legal guidance is essential for businesses and individuals to navigate these complex cases while complying with Texas state regulations and precedents.