Journal of Research and Development in Comparative Law

Journal of Research and Development in Comparative Law

A Review of the Theory of Fiduciary Duties and Comparative Study in Iranian Law

Document Type : scientific research paper

Authors
Asghar Zirak barougi 1
Mortaza Hajipour 2
Ahmad Javadzadeh 3
1 Assistant Professor in the Law Department of Azarbaijan Shahid Madani University Azerbaijan, Iran
2 Associate professor in the Law Department of azarbaijan Shahid Madani University Azerbaijan, Iran
3 Holder of LLM in private law, Shahid Madani University of Azerbaijan Azerbaijan, Iran
10.22034/law.2025.2052770.1607
Abstract
Fiduciary duties in common law serve as a legal framework governing relationships based on trust and reliance. These duties appear in three angles.First, they require fiduciaries observe high standards of due care. Second, they oblige fiduciary to prioritize benefits of beneficiary in the first place. Third, it requires fiduciary observe loyalty and truthfulness. Even though this theory has a history of ancient Rome law and divine religions, its date of recognition dates back at most to past three hundred years.This theory in common law, has been used repeatedly by judges and jurists but this concept has not been delineated and discussed as its importance.
Using descriptive-comparative manner, this research seeks to introduce the fundamental pillars of trust based relationship and while providing justifiable foundation of these duties, examine the nature of relationships and scope of fiduciaries’ duties. It can be said briefly that trust based relationship in a sense is a transfer of assets and delegation of authority on behalf of principal to fiduciary which probably harm the principal and its nature will be focused on inherent specifications of trust based relationship and their normative importance in legal background.The theory of fiduciary duties presents a framework for recognition and assessment of persons’ obligations in relationship based on trustworthy, relying upon trust, power and authority in legal relationship and provides a proper basis for development of trust-based rights in the Iranian legal system with standards such as test of obligation, power and authority. This theory is not explicitly mentioned in Iranian law and jurisprudence. However, its features can be seen in titles such as trust based contracts, observance of interest of principal, the duty of broker to inform in the event that he is a participant or beneficiary in the transaction.
Keywords
trusty, fiduciary relationships, fiduciary duties, undertaking test, &lsquo
power and discretion&rsquo
test
Subjects
Briks P., & Pretto A. (2002). Breach of Trust. Oxford: Hart Publishing.  
Bahrami, H. (2024). Reward Taken by a Trustee from a Third Party, With a Glance at English Law, Journal of Research and Development in Comparative Law, 7(24), 7-38. doi: 10.22034/law.2024.2036736.1424 (In Persian).
Bojnurdi, H. (1998). Al-qawaid al fiqhiyyah, Qom: Al-Hadi. (In Arabic)
Cornell Law Review. (2023). Fiduciary Duties of Trustees, Retrieved 18 Sep. 2024 from https://www.law.cornell.edu/wex/fiduciary_duties_of_trustees
Cornell Law Scool. (2022). Fiduciary Duty, Retrieved 16 Sep. 2024 from https://www.diligent.com/resources/blog/fiduciary-duties-of-board-members
Cooter, R., & Freedman, B. (1991). The Fiduciary Relationship: Its Economic Character and Legal Consequences, New York University Law Review, 1045-1076.
Conaglen, M. (2010). Fiduciary Loyalty: Protecting the Due Performance of Non-Fiduciary Duties, Oxford: Hart publishing.
Conaglen, M. (2017). Brickenden, In S. Degeling and J. NE. Varuhas, Equitable Compersation And Disgorgement Of Profit, (pp.111-141), Hart Publising.
Day, M. (2024). Fiduciary duty: Definitions, breaches, and prevention tips, Retrieved 16 Sep. 2024 from https://www.diligent.com/resources/blog/fiduciary-duties-of-board-members
Demott, Deborah. (2007). Disloyal Agents. Alabama Law Review, 58(5), 1049-1067.
Easterbrook, F., Fischel, D. (1989). The Corporate Contract. University of Chicago Law School,  89(7), 1416-1448.
Easterbrook, F., Fischel, D. (1993). Contract and Fiduciary Duty. The Journal of Law and Economics, 36 (1). 425-451. Doi: 10.1086/467282
Esmaeili, M., Karbalaee Pazoki, M. (2020), The Validation of Fiduciary Concept in Jurisprudence and Law of Iran, Bi-quarterly Journal of Legal Educations, No. 6 (10). 1-24. (In Persian)
Finn, P. (1977). Fiduciary Obligations, Sydney: The Law Book Company Ltd.
Finn, P. (1989). Fiduciaries and Trusts, Toronto:Carswell.
Flannigan, R. (2004). The Boundaries of Fiduciary Accountability, Canadian Bar Review, Vol. 83, pp. 35-90.
Frankel, T. (2002) Fiduciary Duties , In book: The New Palgrave Dictionary of Economics and the Law (pp.785-790) , DOI:10.1007/978-1-349-74173-1_148 , 785- 790.  (برداشته  شده از سایت: https://cyber.harvard.edu/trusting/unit5all.html )
Frankel, T. (2011). Fiduciary Law: New York, Oxford University Press.
Jafari –Langroudi, M J. (2007). Mabsoot: dictionary terms of law, Tehtan: Ganje Danesh Publications. (In Persian)
Harding, M. (2016). Fiduciary Understanding. In P. B. Miller and A. S. Gold (Ed.), Contract, Status, And Fiduciary Law (pp. 71-89), Oxford University Press.
Harding, M. (2017). Disgorgement of Profit and Fiduciary Loyalty. In S. Degeling and J. NE. Varuhas, Equitable Compersation And Disgorgement Of Profit, (pp.19-40), Hart Publising.
Horne. C. (2015). The Avalon Project, Documants in Law, History and Diplomacy. Retrieved 15 September 2024 from https://avalon.law.yale.edu/ancient/hammint.asp
Johnston, D. The Roman Law of Trusts. Oxford: Clarendon Press.
Katouzian, N. (2009). Introductory Course in Civil Law: Lessons from Certain Contracts Volume 2, Tehran: Ganje Danesh Publications. (In Persian)
Kosfeld, M., Heinrichs, M., Zak, P., & Fischabacher U. (2005). Oxytocin increases trust in humans. Nature, 435 (7042), 673–676. https://doi.org/10.1038/nature03701
Madoff, R. (1997). Unmasking undue Influence. Minnesota Law Review, 81(3). 571-630.
Masteri Farahani, R., Ghorbani, A., Rezaeenejad, I. (2024). Features of the Rule on the Prevention of Conflict of Interest in Iranian Criminal Law; With Emphasis on the Islamic Penal Cod of 2013 and by a Comparative Approach, journal of Research and Development in Comparative Law, 7(24), 170-203. (In Persian)
Miller, P. (2011). A Theory of Fiduciary Liability, McGill Law Journal, 56 (2), 236-288.
Miller, P. (2013). Justifying Fiduciary Duties, McGill Law Journal, 58(4), 969-1023.
Miller, P. (2014). ‘The Fiduciary Relationship’ in A Gold and P Miller (eds) Philosophical Foundations of Fiduciary Law, Oxford: Oxford University Press.
Mohaghegh damad, S M. (2021). Islamic Law, Shiites- Interpretation and Construction, Tehran:  Islamic Sciences Publishing Center. (In Persian)
Moore, Colin. (2016). Obligations in the Shade: the application of fiduciary directors’ duties to shadow directors, Legal Studies, 36(2), 326-353.
Niazi, A & Badini, H. (2013). Examining the Responsibility of Akhez Bil-Soum (Taking for Bargaining) With a Comparative Perspective, Comparative Law Researches, 17(3), 135-157. (In Persian)
Rebstein, L. (2011). Fencing Fiduciary Duties. Boston University Law Review. 91(3). 899-920.
Rotman, L. (2005).  Fiduciary Law. Toronto: Thomson Carswell.
Rotman, L. (2011). Fiduciray Law’s “Holy Grail”: Reconciling Theory and Practice in Fiduciary Jurisprudence, Boston University Law Review, Vol. 91. 921-971.
Rotman, L. (2017). Understanding Fiduciary Duties and Relationship Fiduciarity. McGill Law Journal, 62(4), 975-1042.
Safai, H., Qasemzadeh, M. (2009). Civil law persons and persons under legal incapacity, Tehran. Samt Publication. (In Persian).
Scholz, L. (2020). Fiduciary Boilerplate: Locating Fiduciary Relationships in Information Age Consumer Transactions, The Journal of Corporation Law, 46:1, 143-196.
Scott, A. (1949). The Fiduciary Principle, California Law Journal, 37(4), 539-555.
Sealy, L. (1963). Some Principles of Fiduciary Obligation. Cambridge Law Journal, 21 (1), 119-140.
Seipp, D. (2011).  Trust and Fiduciary Duty in the Early Common Law, Boston University Law Review, 91(3), 1011-1037.
Shepherd, J. (1981). The law of Fiduciaries. Toronto: Carswell.
Smith, G. (2002). The Critical Resource Theory of Fiduciary Duty, Vanderbilt Law Review, 55(-), 1399-1498.
Sitkoff, R. (2014). ‘An economic theory of fiduciary law’ in A Gold and P Miller (eds) Philosophical Foundations of Fiduciary Law, Oxford: Oxford University Press.
Usefzadeh, A., Rostami Asli, S., Saberi, M. (2019). Assignments of controlling shareholders in Managing business firms In Iranian and England law, Comarative Law Review, 10 (1), 363-386. (In Persian)
Velasco, J. (2010). How Many Fiduciary Duties Are There in Corporate Law? Southern California Law review, 83(6), 1231-1318.
VerSteeg, R. (1999). Early Mesopotamian Commercial Law , University of Toledo Law Review, 30 (2), 183-214.
Vinter, E. (1955). A Treatise on the History and Law of Fiduciary Relationship and Resulting Trusts, 3rd ed. Cambridge: Heffer & Sons.
Weinrib, E. (1975). The Fiduciary Obligation. University of Toronto Law Journal, 25(1), 1-22.