Towards a Unifying Theory of Fiduciary Relationships: Between Ethics and Law

Katsuhito Iwai

Economic Review, 2016, vol. 67, issue 2, 107-124

Abstract: This article presents a unified theory of fiduciary relationships on the basis of the fundamental legal axiom that one may not make a contract with oneself. It characterizes fiduciary law as a law that imposes on whoever places oneself as a fiduciary to another the duty of loyalty -- the duty to act solely for the other's interests -- as a legal duty enforced by courts. It then shows how fiduciary law practically solves its apparent mix-up between ethics and law by placing the entire burden of disproof on the accused fiduciary, and justifies its disgorgement remedy by the open-ended nature of the duty of loyalty. The article also argues that the primary role of fiduciary law is not to replace but to complement ethics with law.

JEL-codes: A12 D6 D82 K1 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:hit:ecorev:v:67:y:2016:i:2:p:107-124

DOI: 10.15057/27905

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