We last left off at my interpretation of the legality's that are on-going at eBay. Today I am going to tell you how eBay has screwed themselves. In a recent message, put out by eBay in regards to the issues with the U.S. Postal service and how the sellers were going to get through this with eBay's help (although a tad bit late for me and I am sure the same has happened to several other sellers), eBay said, and I quote, "we are partners". eBay's exact words, eBay and the sellers, meaning eBay and I are, or were, partners.
In business there are rules which every state has when it comes to partnerships, whether or not there is a formal partnership agreement between the two, a legal document, or written on a napkin, a partnership must follow, "Fiduciary Duty", as defined:
"An individual in whom another has placed the utmost trust and confidence to manage and protect property or money .The relationship where in one person has an obligation to act for another's benefit."
A fiduciary relationship encompasses the idea of faith and confidence, and is generally established only when the confidence given by one person is actually accepted by the other person.
Mere respect for another individual's judgment, or general trust in his or her character, is ordinarily insufficient for the creation of a fiduciary relationship. The duties of a fiduciary include loyalty and reasonable care of the assets within custody. All of the fiduciary's actions are performed for the advantage of the beneficiary.
The courts stringently examine transactions between people involved in fiduciary relationships toward one another. Particular scrutiny is placed upon any transaction by which a dominant individual obtains any advantage or profit at the expense of the party under his or her influence. Such transaction, in which Undue Influence of the fiduciary can be established, is void.
1)n. from the Latin Fiduccia, meaning "trust, " a person (or a business like a bank or stock brokerage ) who has the power and obligation to act for another (often called t he beneficiary) under circumstances which require total trust, good faith and honesty .The most common is a trustee of a trust, but fiduciaries can include business advisers, attorneys, guardians, administrators of estates, real estate agents, bankers, stockbrokers, title companies, or any one who under takes, is someone who places complete confidence and trust in that person or company.
Characteristically, the fiduciary has greater knowledge and expertise about the matters being handled. A fiduciary is held to a standard of conduct and trust above that of a stranger or of a casual business person. He/she/it must avoid "self-dealing" or "conflicts of interests" in which the potential benefit to the fiduciary is in conflict with what is best for the person who trusts him/her/it.
For example, a stockbroker must consider the best investment for the client, and not buy or sell on the basis of what brings him/her the highest commission. While a fiduciary and the beneficiary may join together in a business venture or a purchase of property, the best interest of the beneficiary must be primary, and absolute candor is required of the fiduciary. 2) adj. defining a situation or relationship in which a person is acting for another. (See: trust, fiduciary relationship)
In operating either a general or limited partnership, partners must be able to trust and rely upon those partners managing the partnership to promote the best interests and success of the partnership. Thus, having a management role is key to the finding of owing a fiduciary duty in a partnership. Typically, the general partners in a general partnership, or limited partnership, participate in the daily operation and supervision of the business. Because of their role in managing the partnership, general partners are usually viewed as having fiduciary duties in both a general partnership and limited partnership.
Fiduciary Duty of Good Faith and Fair Dealing
Under this duty, partners must act with honesty and show good faith and fairness to each other in their partnership interactions. This continuing duty arises starting with the formation of the partnership. It continues through the partnership's ongoing daily operations and ultimately through the partnership's sale or dissolution. This obligation underlies the performance of all the other fiduciary duties in a partnership.
Fiduciary Duty of Loyalty
The duty of loyalty requires relevant partners to place the success and interests of their partnership above their own personal or other business interests. Impacted partners should avoid any conflicts of interest between their partnership duties and their other personal and business activities. As part of the duty of loyalty, one must properly hold partnership property in trust for the benefit of the partners and not use it for one’s own personal advantage. For example, a general partnership may own an office building, but a general partner should not dispose of that partnership asset for his or her individual economic gain to the detriment of the partnership. In some instances, you may be allowed to obtain an individual benefit from partnership assets after full disclosure to and prior approval from the other partners.
Fiduciary Duty of Care
Under the duty of care, partners are expected to act in a reasonably prudent manner in managing and directing the partnership. For example, a general partnership is expected to keep complete and accurate business records for the business. Therefore, a reasonably prudent business person would implement appropriate audit controls and procedures to ensure proper accounting and preservation of partnership funds and assets. Under the business judgment rule, a partner is normally not held liable for business decisions made in good faith and with reasonable care that turn out to be erroneous. Fiduciary Duty of Disclosure
Partners involved in managing partnership affairs are expected to comply with a duty of disclosure or candor. In order to make informed decisions, participating partners should make full disclosures about reasonably known risks and potential benefits of a particular action. These disclosures relate to all partnership activities, including partnership assets, operations, finances, debt, and contracts. Candor is particularly important in instances involving the sale of the business or potential conflicts of interests in business dealings. As part of their duty of disclosure, relevant partners should disclose any conflict of interest they may have relative to any partnership dealings or decisions.
Now that we have defined fiduciary duty among "partners", and thanks to NOLO, let's review. Did eBay operate in good faith and fair dealing with me? Well, considering they would not allow me to message or call them, and they refunded my monies without the return of my product, or looking at the evidence, or facts, involved, the answer would be, "NO".
Did eBay show loyalty to me? NO. eBay did not place the success and interests of my business above their own personal or business interests. As written by, "NOLO", impacted partners should avoid any conflicts of interest between their partnership duties and their own personal business activities. eBay failed to properly hold property in trust for the benefit of the partner (me), and not use it for it's own personal advantage. eBay is refunding monies (like taking from my PayPal without my consent) before property is returned to the seller and verified as intact; this violates the duty of loyalty.
Did eBay show the duty of care to me? NO. eBay's carefree way of refunding monies, without making sure item's were returned, was reckless and careless, considering only one of fourteen item's sent out made it back to me.
Did eBay fulfill their duty of disclosure to me? Again, NO. In order to make informed decisions participating partners should make full disclosures about reasonably known risks & potential benefits of a particular action. These disclosures relate to all partnership activities, including partnership assets, operations, finance, debt, and contracts. But eBay refunds my money, without making sure property has been returned, that the property is not damaged and is the actual property sent out, or if the property was returned at all, and allows NO communication with them.
What Is a Breach of Fiduciary Duty?
A breach of fiduciary duty happens if a fiduciary behaves in a manner that contradicts their duty, and there are serious legal implications. It is also easier to prove a breach of fiduciary duty as there is no need to prove fraudulent or criminal intent.
What Construes as a Breach of Fiduciary Duty?
Knowing how to identify a breach of fiduciary duty allows a person to react quickly and prevent any further damage. It is legally permitted for the wronged individual to sue for and receive damages as well as any profits made by the fiduciary in breach of their fiduciary duty. Breaches of fiduciary duty can have significant consequences not only for the fiduciary's finances, but also on their reputation.
Ways to breach fiduciary duty:
If a fiduciary relationship existed at time of dispute
Breadth of relationship and fiduciary duties
If any duties were breached within context of the relationship
Additionally, a breach of fiduciary duty can be any behavior that is not in the best interest of the client; any action that solely benefits the fiduciary; or any failure on part of the fiduciary to be completely transparent with important information.
If there is no statute that defines the fiduciary relationship, then a contract can define the scope of the relationship, and their respective fiduciary duties. If you believe there may have been a breach of fiduciary duty, then contact an attorney who can assist you to legally resolve the breach.
Winning a Breach of Fiduciary Duty Complaint
In order to win a breach of fiduciary duty complaint, an individual needs to ensure they have received damages due to the breach, and be able to prove the breach.
To win a breach of fiduciary duty complaint, the plaintiff: must prove that the fiduciary (defendant) had duties such as acting in good faith, must be transparent with pertinent information, and be loyal to the plaintiff.
The plaintiff must prove that the defendant failed their duty by: withholding pertinent information, misappropriating funds, abusing their position of influence, failing in their responsibilities, or misrepresenting the statement of fact.
The breach is only actionable if there is proof that the plaintiff suffered damages as a result of the breach.
Being diligent in keeping an ordered record of communication and of all relevant documentation will assist you in proving the breach of fiduciary complaint.
In regard to companies – keep a record (Board Resolutions) of important decisions made by the board of directors or shareholders on behalf of the company.
By ensuring a basic understanding of your fiduciary duty and what behavior is expected of you, you will be able to prevent any breaches of your duty. Remember to avoid transactions that would be in breach of your duty, such as transactions that benefit you personally.
When eBay used the word "partner" they opened a door which I will walk through. I will not stand back and be wronged by a corporation that thinks they are untouchable and beyond the laws. I am setting fourth to protect us from companies and people that pull this crap.
Partnerships are formed everyday without written partnership agreements and there are those that think because of this that there is nothing binding them to operate in an above board manner; this is where they are wrong.
Do You Need a Written Partnership Agreement in Texas?
Normally, Texas law doesn’t require general (or “at-will”) partnerships to create a written partnership agreement. However, it’s always best to draft one so that when the entity breaks apart (or any partner leaves), you’ll know exactly how to pay off all partnership debts and distribute the remaining assets among everyone.
When general partnerships don’t have an agreement, then Texas law expects the partners to govern their “wind-up” activities in keeping with our state’s default partnership laws.
BUSINESS ORGANIZATIONS CODE TITLE 4. PARTNERSHIPS CHAPTER 152. GENERAL PARTNERSHIPS SUBCHAPTER A. GENERAL PROVISIONS
Sec. 152.204. GENERAL STANDARDS OF PARTNER'S CONDUCT. (a) A partner owes to the partnership, the other partners, and a transferee of a deceased partner's partnership interest as designated in Section 152.406(a)(2): (1) a duty of loyalty; and (2) a duty of care. (b) A partner shall discharge the partner's duties to the partnership and the other partners under this code or under the partnership agreement and exercise any rights and powers in the conduct or winding up of the partnership business: (1) in good faith; and (2) in a manner the partner reasonably believes to be in the best interest of the partnership. (c) A partner does not violate a duty or obligation under this chapter or under the partnership agreement merely because the partner's conduct furthers the partner's own interest. (d) A partner, in the partner's capacity as partner, is not a trustee and is not held to the standards of a trustee. Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006. Amended by: Acts 2005, 79th Leg., Ch. 64 (H.B. 1319), Sec. 77, eff. January 1, 2006. Sec. 152.205. PARTNER'S DUTY OF LOYALTY. A partner's duty of loyalty includes: (1) accounting to and holding for the partnership property, profit, or benefit derived by the partner: (A) in the conduct and winding up of the partnership business; or (B) from use by the partner of partnership property; (2) refraining from dealing with the partnership on behalf of a person who has an interest adverse to the partnership; and (3) refraining from competing or dealing with the partnership in a manner adverse to the partnership.
Sec. 152.206. PARTNER'S DUTY OF CARE. (a) A partner's duty of care to the partnership and the other partners is to act in the conduct and winding up of the partnership business with the care an ordinarily prudent person would exercise in similar circumstances. (b) An error in judgment does not by itself constitute a breach of the duty of care. (c) A partner is presumed to satisfy the duty of care if the partner acts on an informed basis and in compliance with Section 152.204(b). Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Here are some item's found on the web regarding eBay and partners:
The above is off the first search page alone, so there are a lot of listings about eBay and partnerships. On my next blog we will take a look at eBay and their legal history.