“A fiduciary relationship exists whenever one party trusts and relies upon another party.”
—Texas Court of Appeals

Here’s what we cover:

A fiduciary is a person who has a relationship with another based generally on trust and confidence. Escrow agents, trust­ees, attorneys and partners are all examples of fiduciaries. (A fiduciary may also be a company, such as a title company, bank or trust company.)

A fiduciary owes a special duty to the other person in the relationship. This is called a “fiduciary duty.” If a fiduciary breaches this duty, the injured person may sue the fiduciary for breach of fiduciary duty. 

Escrow Agents

An escrow agent is usually employed by the buyer and seller in a real estate transaction, to handle the escrow pending the close of the transaction. An escrow agent is often a title company.

An escrow agent owes a fiduciary duty to the parties in a transaction. This duty requires the escrow agent to conduct the transaction with scrupulous care, honesty and diligence. It also requires the escrow agent to disclose information known to the agent that presented evidence of fraud.


A trustee may be appointed by the court, or may be named in a trust agreement. A trustee may be an individual, or a bank or trust company. A trustee administers the property of others.

A trustee owes a fiduciary duty to the parties to a trust agreement, and to the beneficiaries of the trust being adminis­tered by the trustee. This duty requires the trustee to act as a reasonable person and, in appropriate cases, to use its special skills and expertise in dealing with the property of others.


Attorneys owe a fiduciary duty to their clients. This duty requires attorneys to represent clients with strictest loyalty and to act with the highest and utmost good faith.


A partnership is a legal entity consisting of two or more partners. Partners owe a fiduciary duty to one another. This duty requires partners to deal in utmost good faith with one another and to fully disclose to one another all material facts relating to partnership affairs within their knowledge. In the case of a limited partnership, the general partner owes this duty to the limited partners.

Before a person can be found liable for breach of fiduciary duty, it must be shown that his breach of duty was a cause of the other person’s damages. A breach of duty is a cause of damages if it helps produce the damages and if the damages would not have occurred without the breach.

A breach of fiduciary duty is a tort. A fiduciary who is found liable for breach of fiduciary duty will be required to pay for all damages that occurred as a result of the breach. In a trial, the amount of damages will be determined by the judge or a jury.

The time limit to file a lawsuit for breach of fiduciary duty is two years from when the cause of action accrues.

The above article is an excerpt from Arizona Laws 101: A Handbook for Non-Lawyers, 2nd Edition (Fenestra Books, 2012), by Donald A. Loose, republished with the author’s permission. 

Disclaimer: Laws change constantly. Specific legal advice should be obtained regarding any legal matter. The information contained on this website does not constitute legal advice and no attorney-client relationship is created. 

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