Understanding What a Fiduciary Duty Is in An Oklahoma Business Relationship

When two or more people enter into a business relationship in Oklahoma, certain legal duties arise between them, such as the fiduciary duty. While the term may sound complex, a fiduciary duty simply refers to the legal obligation to act in another person’s best interest in certain business contexts. Understanding fiduciary duties in Oklahoma business relationships is critical—especially when conflicts, mismanagement, or potential lawsuits arise.

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What Is a Fiduciary Duty?

A fiduciary duty is the highest standard of care imposed by law and exists when one party (the fiduciary) is entrusted to act in the best interest of another (the beneficiary or principal). In a business context, this duty arises when one party places trust, confidence, and reliance in another to manage their business affairs or property.

Fiduciary duties often exist between:

• Business partners
• Members and managers of an LLC
• Corporate officers and shareholders
• Company directors and the corporation itself

In Oklahoma, breaching a fiduciary duty can result in serious legal consequences—including damages, injunctions, or even removal from a leadership position.

Types of Fiduciary Duties in Oklahoma Business Law

Oklahoma courts recognize several key fiduciary duties, such as:

1. Duty of Loyalty

This means the fiduciary must act in good faith and avoid self-dealing, conflicts of interest, and taking personal advantage of business opportunities that should belong to the company.

2. Duty of Care

Fiduciaries must act prudently and make informed decisions on behalf of the business. This includes staying reasonably informed, exercising due diligence, and avoiding negligent behavior.

3. Duty of Good Faith and Fair Dealing

In many cases, Oklahoma law also requires fiduciaries to act honestly and fairly in their business dealings, avoiding deceptive or manipulative behavior.

Common Situations Where Fiduciary Duties Arise

Fiduciary duties commonly arise in these Oklahoma business settings:

• Partnerships: Partners owe each other loyalty and full disclosure. One partner cannot secretly compete with the partnership or divert opportunities.
• Limited Liability Companies (LLCs): Managers owe duties to the company and its members, unless expressly modified by the operating agreement.
• Corporations: Directors and officers owe fiduciary duties to the corporation and its shareholders. For example, a director may not approve a transaction that benefits them personally at the company’s expense.

What Happens If a Fiduciary Duty Is Breached?

A breach of fiduciary duty occurs when someone with a fiduciary obligation acts in their own interest, misuses funds, hides material information, or otherwise harms the party they owe the duty to.

Legal remedies in Oklahoma may include:

• Monetary damages for losses caused by the breach
• Disgorgement of profits wrongfully gained
• Injunctions to prevent further harm
• Removal of the fiduciary from their position

If fraud or bad faith is involved, punitive damages may also be awarded.

Tulsa Business Litigation Attorneys

We help business owners, partners, and stakeholders understand and enforce fiduciary duties in a wide range of business relationships. Whether you’re drafting agreements, managing risk, or pursuing a breach of duty claim, call our Tulsa business attorney at Kania Law Office today at 918.943.2233, or if you would like to ask a free online business law question, follow this link.