1.1.3.2.2.5. Fiduciary Responsibility: Right to Compete and Duty to Disclose
A fiduciary duty is a legal obligation of one party to act in the best interest of another. Officers of a corporation have a fiduciary duty to the business. An attorney has a fiduciary duty to a client. General partners have a fiduciary duty to the partnership. The fiduciary duties of general partners to a limited partnership and to each other are often complicated by their having a contractual right to compete.
The partnership agreement should specify to what extent the general partners can engage in outside activities and compete with the partnership’s business. A real estate limited partnership (RELP), for example, may have a real estate developer among its general partners whose own business may naturally compete with the partnership by bidding on the same properties or building adjacent to one another. The partn
