This is something that exists in many business relationships but often people require clarification as to what it entails as it is important.
A fiduciary relationship is a legal or ethical relationship of confidence or trust between two or more parties. A fiduciary duty is the highest standard of care at either equity or law and therefore must be adhered to.
Where does it arise? Let us look at some examples: we as solicitors (and other professional advisers) owe a fiduciary duty to our clients. Doctors owe a duty to their patients, a liquidator to a company. In a partnership business partners owe a fiduciary duty to their fellow partners, agents owe a fiduciary duty to the principal on whose behalf they act and trustees owe a duty to the beneficiaries.
What does it mean in practice? take for example a principal and agent. The agent acting under a fiduciary relationship here must not act on such a way that he puts his personal interests before the duty that he owes to the principal, and he must not profit from his position as a fiduciary, unless the principal consents.