Which statement correctly pairs the fiduciary duties with their typical breaches?

Which statement correctly pairs the fiduciary duties with their typical breaches?

• A. Duty of loyalty: prioritize principal's interests; breach example self-dealing. Duty of care: reasonable diligence; breach example ignoring material risks.
• B. Duty of loyalty: prioritize personal interests; Duty of care: maximize profits at all costs.
• C. Duty of loyalty: focus on personal gain; Duty of care: avoid any risk.
• D. Duty of loyalty: ignore conflicts; Duty of care: avoid all risk.

Answer: (A)

The central idea is how fiduciaries must balance two duties: loyalty to the principal and due care in decision-making. The duty of loyalty means putting the principal’s interests first and avoiding self-dealing, conflicts, or using the role for personal gain. A breach typically shows up when the fiduciary uses the position to benefit themselves at the principal’s expense. The duty of care requires acting with reasonable diligence and prudence; a breach occurs when the fiduciary neglects material risks or fails to take appropriate steps to inform themselves before acting. This pairing is correct because it matches each duty with a classic breach: loyalty linked to self-dealing, and care linked to ignoring material risks. The other options misstate the duties—for example, claiming loyalty should prioritize personal interests or that care aims to maximize profits at all costs or that one should avoid any risk at all times. Fiduciaries must avoid conflicts and exercise reasonable care, not pursue personal gain or perfect risk avoidance.

The central idea is how fiduciaries must balance two duties: loyalty to the principal and due care in decision-making. The duty of loyalty means putting the principal’s interests first and avoiding self-dealing, conflicts, or using the role for personal gain. A breach typically shows up when the fiduciary uses the position to benefit themselves at the principal’s expense. The duty of care requires acting with reasonable diligence and prudence; a breach occurs when the fiduciary neglects material risks or fails to take appropriate steps to inform themselves before acting.

This pairing is correct because it matches each duty with a classic breach: loyalty linked to self-dealing, and care linked to ignoring material risks. The other options misstate the duties—for example, claiming loyalty should prioritize personal interests or that care aims to maximize profits at all costs or that one should avoid any risk at all times. Fiduciaries must avoid conflicts and exercise reasonable care, not pursue personal gain or perfect risk avoidance.