Can We Be Obliged to Be Selfless?

A. Gold and P. Miller, eds., Philosophical Foundations of Fiduciary Law, Oxford University Press, 2014

20 Pages Posted: 26 Sep 2013 Last revised: 13 Dec 2013

See all articles by Lionel Smith

Lionel Smith

Downing Professor of the Laws of England; University of Oxford - Faculty of Law

Date Written: September 24, 2013

Abstract

It is generally agreed that fiduciary law is concerned with obligations that relate in some way to loyalty. The usual understanding is that there is something called a duty of loyalty. This paper explores the question whether there is a legal obligation of loyalty; and if so, what does it require? My argument is that the duty of loyalty is not a duty in the strict sense, that corresponds to a claim-right held by another person. Instead, the law incorporates a requirement of loyalty into the way in which the fiduciary exercises her discretionary powers. If they are exercised disloyally, the exercise can be set aside retroactively. This understanding helps us to make sense of the structure of fiduciary law, including the relationships between and among the requirement of loyalty, the no-conflict rules, and the no-profit rule.

Keywords: fiduciary, loyalty, conflicts

JEL Classification: K1

Suggested Citation

Smith, Lionel, Can We Be Obliged to Be Selfless? (September 24, 2013). A. Gold and P. Miller, eds., Philosophical Foundations of Fiduciary Law, Oxford University Press, 2014, Available at SSRN: https://ssrn.com/abstract=2330551

Lionel Smith (Contact Author)

Downing Professor of the Laws of England ( email )

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HOME PAGE: http://www.law.cam.ac.uk/people/academic/d-smith/83102

University of Oxford - Faculty of Law ( email )

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