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Breach of Fiduciary Duty in Texas Overview

Ethical and legal responsibilities are the cornerstones of fiduciary duty. Texas judicial systems place severe responsibility on those with the title of fiduciary. If someone has or may allege that you have breached a fiduciary duty, you need a lawyer. There are attorneys who can help you understand all that may encompass the landscape of breach of fiduciary duty. Texas lawyers in this field stand ready to defend you if needed. When Is There a Fiduciary Duty? Texas finds a fiduciary duty for a person or organization that acts on behalf of another person. A fiduciary duty requires you to put your clients’ interests ahead of your own. There are several types of fiduciary relationships. For instance, common professional relationships are: Promoters and stock subscribers, Lawyers and clients, Investment corporations and investors, Insurance companies/agents and policyholders, Trustees and beneficiaries, Corporate board members and shareholders; and Executors and beneficiaries. There are various complexities to the services and responsibilities of each type of fiduciary duty. Every fiduciary must know and follow the expectation specific to them.  General Fiduciary Duties The law expects every fiduciary to protect their client’s best interests and consistently show a high level of ethics when making decisions on their behalf. Various Texas laws address fiduciary responsibilities. Again and again, they bind a fiduciary legally to act in the other’s best interests and follow specific rules concerning their relationship. Examples of Breach of Fiduciary Duty  Texas law allows for a wide breadth of situations to encompass a breach of fiduciary duty. It seeks to protect all manner of individuals to whom a fiduciary duty is owed. Here are two examples of conditions where a breach of fiduciary duty in Texas could exist. A Corporate Officer  Corporate officers and directors owe clear fiduciary duties to the corporation for which they work. As a result, they are bound to an honest relationship with the corporation, including being fully transparent regarding competing interests. For example, consider a situation where: A corporate officer uses their influence or power to hire contractors to work on projects for the corporation; and The corporate officer does not inform the company that the contractors they hire are tied to a company owned by their spouse’s family.  This could be a breach of fiduciary duty. It would be irrelevant whether the contractors were competent. The primary issues are that the corporate officer was not transparent and that their decision as a fiduciary was not without clear potential legal, ethical, and financial conflicts. An Executor of an Estate The office of executor is complicated and vital. An executor is tasked with many responsibilities, including: Finding and organizing documents, Taking inventory,  Identifying and notifying beneficiaries, and Managing assets. It is carrying out the last item on the above list—managing assets—which most often will lead to a claim of breach of fiduciary duty. Texas law requires executors to make sure that the assets of the estate stay secure and properly maintained. If an executor uses an estate’s income for personal use or ignores an estate’s business and allows it to deteriorate or close while taking no action, they may have violated their fiduciary duty. Many things can go wrong in estate administration, and executors who misstep may get involved in a dispute over fiduciary duty in Texas. Exact Legal Standards for Fiduciary Cases  Fiduciary duty is more than a moral, social, or personal relationship of trust. Legally, the elements of a breach-of-fiduciary-duty claim must show: The existence of a fiduciary relationship between the plaintiff and defendant;  The defendant’s breach of the fiduciary duties arising from that relationship; and  Injury to the plaintiff, or benefit to the defendant, resulting from that breach. Courts lean toward protecting those whom the fiduciary is expected to serve and can be stern toward those with the duty. Defenses to Breach of Duty in Texas You will need a lawyer skilled in fiduciary cases to analyze your situation and prepare the best defense. It is not enough to say that a breach of fiduciary duty was not intentional or that you did not understand the fiduciary duty. Texas also does not provide a loophole for powerful  professionals such as attorneys or investment bankers to avoid responsibility. However, do not lose hope if you are facing a breach of duty allegation. There are strong winning defenses, including that: You did not breach your duty; Your fiduciary duty ended; The allegation was not about fiduciary duty, but a personal grudge/issue; or  The alleged breach did not result in injury to the plaintiff or benefit to you. Whether someone has unjustly accused you of breach of fiduciary duty or you are concerned that you may have breached a duty, you need legal help. Take no action without first consulting a trusted, experienced lawyer who will start by working with you to determine what success for your case looks like and develop a plan to get you there.  The Hunnicutt Law Group: We Never Lose Sight of What It Means to Be the Client Lawyer Steve Hunnicutt founded and still leads the top-rated Hunnicutt Law Group. Mr. Hunnicutt has practiced law for 30 years. Prior to starting his firm, he served as in-house counsel for a Fortune 500 company and worked for a large law firm. The Hunnicutt Law Group will never lose sight of your best interests. We will offer you the representation that you deserve.  At The Hunnicutt Law Group, you benefit from a highly knowledgeable attorney’s experience. You will receive an in-depth look at the intricacies of your unique matter without the high fees of big downtown firms. Call us today at 214-361-6740 or contact us online or by email to arrange a time to meet in person or via video conference. 

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Understand the Statute of Limitations for Breach of Contract in Texas

When you are counting on someone to do something they are legally obligated to do and they fail to execute, you may have a claim for breach of contract. There are consequences when someone does not uphold their end of the bargain. But the window of opportunity for relief is limited. The Texas statute of limitations for breach of contract extends for four years past the date of the breach.  What Are Statutes of Limitations? A statute of limitations is a fixed period during which a legal proceeding can be brought. These usually start on the date that the event in question occurred. The purpose of the statute of limitations in Texas for breach of contract is to make sure that the case is still relevant. Evidence can be lost, and witnesses become difficult to locate as time passes. That is why it is important to bring your cause of action within the four-year Texas statute of limitations for contract disputes.  Exceptions to Texas Statute of Limitations for Breach of Contract In most cases, if you do not file your claim in court before the statute of limitations expires, your claim will be barred. However, there are two primary exceptions to the breach of contract statute of limitations in Texas. Fraudulent Concealment This type of defense applies to the statute of limitations for a Texas contract when the defendant has concealed information about the breach in such a way that you could not have known it had occurred. The statute of limitations for breach of contract will not begin until this information was discovered or reasonably should have been discovered.  Discovery Rule This rule is similar to fraudulent concealment and pertains to situations where the plaintiff was unaware the breach had occurred or that they had sustained an injury because of the breach of contract. Under these circumstances, the statute of limitations in Texas for breach of contract will not begin until the breach, or injury caused by the breach, is discovered.  When Can You Claim Breach of Contract in Texas? To prevail on  a valid claim for breach of contract in Texas, you must first prove that there was a valid contract. Once this fact has been proven, you can claim that the obligations stated in the contract were not met.  Proving a Valid Contract A legally binding contract in Texas must satisfy several conditions: An offer was made; Offer terms were accepted; Written or verbal communication existed to demonstrate consent to the terms; The contract was intended to be mutual and binding to both parties; and There was consideration on both sides of the contract. Consideration is a legal term that means that both parties were benefiting from the contract. These requirements for a valid contract apply to both written and verbal contracts.  Verbal Contracts in Texas Verbal contracts are more difficult to prove, and the actions of both parties can play a big role in determining whether a contract existed. Some types of contracts fall under the statute of frauds, which is a law requiring certain agreements to be in writing, including: Contracts relating to real property; Contracts for the sale of goods for over $500; A will or trust; Marriage contracts (with the exception of common-law marriages); Sale of securities; Contracts that cannot be completed within one year; and Contracts to answer for the duty of another (guarantee/suretyship). It is always a better idea to put everything in writing when possible.  What Constitutes a Breach of Contract in Texas? Establishing that there was a valid contract is the first step of proving breach of contract. There is no breach without a valid contract. Additionally, the elements of a Texas breach of contract include: The plaintiff performed their end of the contract; The defendant breached the contract; and The breach caused damage to the non-breaching party.  If all these elements exist, you can bring a cause of action for breach of contract in Texas within the statute of limitations for breach of contract.  What Damages Are Available for Breach of Contract? The damage from a breach of contract is often financial. The non-breaching party is generally entitled to compensation, which should restore them to the position they would have been in had the contract been performed as planned.  The non-breaching party will be responsible for proving the extent of their damages due to the breach. Because important documents and conversations may be less accessible with time, it is important to start legal proceedings as soon as possible despite the four-year Texas statute of limitations for contract disputes. There are multiple types of damages available depending on the circumstances of your case.  General Damages Compensatory damages are a part of general damages and include the foreseeable losses suffered by the non-breaching party. Compensatory damages include things like reimbursement of costs for the breach and other basic financial losses. Special Damages Texas courts may grant special or consequential damages caused indirectly by the breach. Loss of profits would constitute special damages. These could be due to delays, tarnished business reputation, or loss of business opportunities  Equitable Relief In some cases, the Texas court may order non-monetary relief. Some examples include specific performance of the contract, which requires the breaching party to fulfill their obligations under the contract. A court-issued injunction, revision, or recession of the contract agreement are also available as equitable remedies.  Defenses to Breach of Contract There are several valid defenses to breach a contract that a court may honor: A mistake was made during contract formation; The contract was made under duress; The contract is unconscionable or grossly unfair; The contract is illegal—for example, it includes unlawful dealings, violates tax law, or requires the destruction of records; or It becomes impossible for one of the parties to fulfill their end of the bargain. The court will review the circumstances of each contract to determine if there is a valid defense.  Should You Hire a Contract Attorney? The first step toward protecting your best interest in your […]

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