The Fiduciary Duty of Care

Abstract

Fiduciary duties of care are at once familiar and strange. They partake of many of the characteristics of duties of care in other domains of private law, particularly tort law. But they also bear the distinctive marks of the fiduciary context. This chapter identifies two ways in which fiduciary duties of care tend to be distinct from tort duties of care. First, with some important exceptions, they are less demanding and less vigorously enforced. Second, breaches of the fiduciary duty of care can give rise to liability even if no injury results to the beneficiary. These distinctive features, I argue, reflect judicial efforts to harmonize the fiduciary’s duty of care with her duty of loyalty. As such, they are defensible, even if not in all respects justified.

Keywords: Beneficiary, Business Judgment Rule, Canterbury v. Spence, Disclaimers, Duties of Noninjury, Duty of Care, Duty of Loyalty, Fiduciary, Informed Consent, Objective Standard, Standard of Care, Trustee, Underenforcement, Waiver