
Contents
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I. Fiduciary Law Does Not Care About Loyalty I. Fiduciary Law Does Not Care About Loyalty
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II. Fiduciary Law Should not Care about Loyalty II. Fiduciary Law Should not Care about Loyalty
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III. A Legal Term of Art? III. A Legal Term of Art?
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IV. The No-Conflict Rule Imposes a Prophylactic Duty IV. The No-Conflict Rule Imposes a Prophylactic Duty
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V. The No-Profit Rule as Part of the No-Conflict Rule V. The No-Profit Rule as Part of the No-Conflict Rule
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VI. Disgorgement of Profits VI. Disgorgement of Profits
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A. Disgorgement as a deterrent A. Disgorgement as a deterrent
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B. The primary-right explanation of disgorgement B. The primary-right explanation of disgorgement
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C. Disgorgement as a remedy for breach of the no-conflict duty C. Disgorgement as a remedy for breach of the no-conflict duty
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VII. Fiduciary Law as Contract Law VII. Fiduciary Law as Contract Law
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VIII. Non-Contractual Fiduciaries VIII. Non-Contractual Fiduciaries
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IX. Conclusion IX. Conclusion
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9 The Deed, Not the Motive: Fiduciary Law Without Loyalty
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Published:November 2016
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Abstract
This chapter criticizes the conventional view that loyalty lies at the heart of fiduciary law. What matters in fiduciary relationships, I argue, is that fiduciaries fulfill their mandates (e.g. executing trusts, promoting the principal’s business, providing legal services). Whether that task is performed loyally is not, and should not be, the law’s concern. Indeed, in most fiduciary relationships the issue of loyalty cannot even arise because it is typically not possible for fiduciaries to act loyally—or disloyally—even if they were inclined to do so. I further argue that the unimportance of loyalty in fiduciary relationships has four implications for the broader understanding of fiduciary law: (1) the no-conflict rule is a prophylactic duty; (2) the no-profit rule is part of the no-conflict rule; (3) disgorgement of profits is a remedy for breach of the no-conflict duty; and (4) fiduciary law is in most cases part of contract law, broadly understood.
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