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Lecture

Chapter4ReadingNotes.doc

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Department
Business
Course
BU231
Professor
Daniel J Fife
Semester
Spring

Description
READING NOTESChapter 4Professional LiabilityPrimarily concerned with application of contract and fiduciary law to professionalsProfessional Liability The Legal DilemmaProfessionals are those with specialized knowledge and skills that clients rely onGreater exposure to liability for professional negligence has led to extensive use of liability insurance which consequently raises price as well as client expectations in a vicious cycleDuty of ProfessionalsContractual DutyoAgreement to provide professional services to a client contains a promise to perform those services with due care whether stated expressly or notoA breach of that promise is a breach of contractFiduciary DutyoIn addition to tort liability a principle of equity imposes a fiduciary duty of care where a person is in a special relationship of trust Professional must do everything they can for the clientWhy Professional has upper hand because client is dependent upon them for serviceEg TD vs Huntinvolving a nondiscretionary sale of assetsHunt argues that he did not tell the manager to sell BCEHunt won originally because of his old age and fiduciary dutyCase was appealed where the court ruled that Mr Hunt was not in a fiduciary relationship because he had good health and demonstrated previous financialbusiness intelligenceoTesting for imposing a fiduciary dutyFiduciary has scope for exercise of powerfall in your graspFiduciary can use that power to affect the beneficiarys legal or practical interestsable to affect themBeneficiary is peculiarly vulnerable to or at mercy of the fiduciaryoConflicts of interestSituation where a duty is owed to two or more clients who may have competing interestsRequires complete fidelity and loyalty to the other party of the relationship
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