Chapter 5

Question 1

Define fiduciary duty.

Answer 1

• a duty imposed on a person who stands in a special relation of trust and loyalty to another

Question 2

Define third-party liability.

Answer 2

• liability to some other person who stands outside a contractual relationship

Question 3

Define duty to account.

Answer 3

• the duty of a person who commits a breach of trust to hand over any profits derived from the breach

Question 4

Define deceit.

Answer 4

• an intentional tort imposing liability when damage is caused by a false statement made with the intention of misleading another person.

Question 5

Define disclaimer.

Answer 5

• an express statement to the effect that the person making it takes no responsibility for its accuracy.

Question 6

What are the 3 characteristics of fiduciary relationships?

Answer 6

1) fiduciary has undertaken to act in the best interest of the beneficiary
2) beneficiary is vulnerable to or at the mercy of fiduciarys control or discretion
3) a legal or practical interest of the beneficiary could be harmed by the fiduciarys exercise of discretion or control

Question 7

What are the 6 factors applicable to assessment of the fiduciary nature?

Answer 7

1) vulnerability
2) client relationship
3) trust
4) reliance
5) discretion
6) standards expressed in a professional code of conduct

Question 8

What are the elements of deceit?

Answer 8

1) false representation made by defendant
2) some level of knowledge of the falsehood of rep. on part of the defendant
3) false rep. caused plaintiff to act
4) plaintiffs actions resulted in a loss