Fiduciary Duties

Question 1

Duty of loyalty

Answer 1

Each partner owes a fiduciary duty of loyalty to the partnership an other partners which requires that each partner:

(1) account for all profits, any property, or other benefits derived by the partner in connection with the partnership;
(2) act in good faith and fairly toward the other partners;
(3) not deal with the partnership as one with an adverse interest

and

(4) refrain from:
- competing with the partnership within the scope of the business (even during dissolution); and
- usurping a business opportunity that belongs to the partnership

Question 2

Duty of care

Answer 2

Each partner owes a fiduciary duty of care to the partnership and other partners, which requires that each partner REFRAIN from engaging in:

(1) grossly negligent or reckless conduct;
(2) intentional misconduct; or
(3) unlawful conduct

Question 3

what is the effect of a partner breaching the duty of care or loyalty?

Answer 3

if a partner breaches the duty of care or loyalty, he may be held PERSONALLY LIABLE for damages

Question 4

duty of obedience

Answer 4

the duty of obedience requires the partner to:

(1) obey all reasonable directions of the partnership; and
(2) not act outside his authority

Question 5

Partner’s duty re: information to partnership

Answer 5

the partner has a duty to provide complete and accurate information concerning the partnership