Business partners have duties to other partners within the partnership. This may seem obvious, but the scope of these duties has been developed over many years in California. In general, the fiduciary duties that one partner owes to another partner are best described as the duty of loyalty and care.
Duty of Loyalty
A partners duty of loyalty involves many things. It includes, but is not limited to the following duties:
- The duty to account to the partnership
- The duty to act as a trustee for any partnership property, profit or other benefit of the partnership
- The duty to refrain from maintaining an interest adverse to the partnership
- The duty to not compete with the partnership
Duty of Care
A partner’s duty of care is different from the duty of loyalty. The duty of care is more broad in that it limits a partner from engaging in grossly negligent or reckless conduct, intentional misconduct and knowingly violating the law.
Many partnership disputes come down to issues involving one partner claiming the other partner breached its fiduciary duty to the other partner. That said a breach of a fiduciary duty is a rather broad concept and typically we try to narrow down the breach to a subset of duty of loyalty or the duty of care.
To inquire about a free consultation on your partnership dispute, contact us at Schorr Law, APC. During our initial half hour we can brainstorm with you about possible fiduciary duty breaches and begin to identify whether you have an actionable claim.