Some commentators view fiduciary duties through a contractual framework.\u00a0 Judge Frank Easterbrook and Professor Fischel state, \u201cThe fiduciary principle is fundamentally a standard term in the contract.\u00a0 Fiduciary duties are not special duties; they have no moral footing; they are the same sort of obligations, derived and enforced in the same way, as other contractual undertakings.\u201d<\/p>\n
In their view fiduciary law parallels contract law, because the objective is to \u201cpromote the parties\u2019 own perception of their joint welfare.\u201d<\/p>\n
Profession Scott Fitzgibbon, in his article, \u201cFiduciary Relationships Are Not Contracts,\u201d 82 Marq. Law Rev.<\/em> 2 (Winter 1999), criticizes this analysis.\u00a0 The law of fiduciary duties is all about \u201cgap filling,\u201d meaning that courts are setting forth the terms that were not expressly defined by the parties.\u00a0 Professor Fitzgibbon then cites from a decision written by Judge Posner as follows:<\/p>\n \u201cThe common law imposes a fiduciary duty when the disparity between the parties relevant to the performance of an undertaking is so vast that it is a reasonable inference is that had the parties in advance negotiated expressly over the issue they would have agreed that the agent owed the principal the high duty that we have described, because otherwise the principal would be placing himself at the agent\u2019s mercy.\u201d\u00a0 Burdett v. Miller<\/em>, 957 F.2d 1375, 1381 (7th Cir. 1992).<\/p>\n Yet, the traditional contractual analysis does not explain how courts assess fiduciary obligations.\u00a0 Professor Fitzgibbon explains that, in a contractual gap-filling situation, \u201cCourts usually fill gaps by looking hard at the facts of the transaction before them rather than proceeding \u2018generically.\u2019\u201d<\/p>\n Thus, when confronted with missing terms in a contractual setting, the court proceeds narrowly, based on the precise facts of the case.\u00a0 Yet fiduciary duties are applied using a broad brush, which reflects a critical difference between a contractual approach and the fiduciary law approach when it comes to gap filling \u2013 \u201cFiduciary law usually takes a generic approach insisting that all trustees are subject to a standard panoply of duties.\u201d<\/p>\n This is a major distinction \u2013 contracts are interpreted narrowly, fiduciary obligations are applied broadly.\u00a0 They can\u2019t come from the same root stock, and certainly are not treated the same by courts.<\/p>\n","protected":false},"excerpt":{"rendered":" Some commentators view fiduciary duties through a contractual framework.\u00a0 Judge Frank Easterbrook and Professor Fischel state, \u201cThe fiduciary principle is fundamentally a standard term in the contract.\u00a0 Fiduciary duties are not special duties; they have no moral footing; they are the same sort of obligations, derived and enforced in the same way, as other contractual […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-43","post","type-post","status-publish","format-standard","hentry","category-law-reviews"],"_links":{"self":[{"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/posts\/43"}],"collection":[{"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=43"}],"version-history":[{"count":0,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/posts\/43\/revisions"}],"wp:attachment":[{"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=43"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=43"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=43"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}