THEORETICAL APPROACHES TO UNDERSTANDING THE NATURE OF FIDUCIARY RELATIONS

Abstract

The problem with fiduciary legal relations is that it is a complex legal construct with respect to which there are still no unified approaches to its understanding. In common law countries, several areas of application for fiduciary relationships have historically developed, such as trust law, corporate law, agency relationships, relationships between doctor and patient, lawyer and client, guardian and ward, etc. These areas of application of fiduciary relations are so diverse that legal scholars continue to work on finding common features that would unite them and develop a unified theory of fiduciary law. The relevance of studying this legal phenomenon is practical in the context of the recodification of Ukraine's civil legislation and the normative regulation of fiduciary responsibility. The purpose of this research is to study the legal nature of fiduciary relations through the analysis of the theories of their origin. Both theories based on one or several characteristics of fiduciary relations (property theory, trust theory, inequality theory, and others) and comprehensive theories of the emergence of fiduciary relations, such as the theory of powers and discretion, economic theory, have been analyzed. The research concludes that the purpose of fiduciary relationships is the delegation of beneficiary’s part of his / her / its legal capacity in favor of the fiduciary, resulting in the latter acquiring rights regarding the delegated powers. The use of delegated rights contrary to the purpose of the established legal relationship constitutes an abuse of right. Fiduciary duties are intended to prevent the fiduciary from abusing the rights transferred to him, and in the case of the breach, it becomes the basis for compensation of damages. From the perspective of economic theory, fiduciary duties reduce transaction costs, and this man explain the diversity of societal relationships in which fiduciary legal relations function.