Question:

Fiduciary relationship is relationship based on

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Think of “fiduciary” as loyalty plus confidence: contracts may set terms, but fiduciary law adds the higher duties of trust, loyalty, and conflict-avoidance.
Updated On: Aug 12, 2025
  • Contract
  • trust
  • blood relationship
  • money
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The Correct Option is B

Solution and Explanation

A fiduciary relationship exists where one party places confidence in another who is bound to act in the former’s best interests with utmost good faith and loyalty.
Core examples include trustee–beneficiary, lawyer–client, director–company, agent–principal, and guardian–ward, all of which hinge on trust and confidence rather than mere commercial exchange.
While a fiduciary duty can arise from a contract, the essence of fiduciary obligation surpasses contractual terms and rests on duties of loyalty, care, and avoidance of conflict of interest.
Option (a), “Contract,” is incomplete because contracts can be purely commercial without imposing fiduciary standards; thus contract alone does not define fiduciary nature.
Option (c), “blood relationship,” may produce moral duties but does not automatically create legal fiduciary obligations unless roles like guardianship are formally recognized.
Option (d), “money,” refers to consideration or finance but says nothing about loyalty or best-interest duties, so it cannot be the legal foundation of fiduciary status.
Therefore, the defining basis is option (b), “trust,” capturing the legal expectation of utmost good faith and loyalty owed by the fiduciary to the beneficiary.
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