Introduction

Are fiduciary obligations consensual or imposed? The question matters because to say that fiduciary obligations are consensual suggests that they must take second place to the parties' own wishes, as expressed in their contract or, in the absence of an explicit contract, in the terms of their underlying arrangement. On the other hand, to say that fiduciary obligations are imposed suggests that the parties' own wishes are not all that count and that, in an appropriate case, fiduciary law may override express or implied contractual terms in furtherance of other interests.

The view that fiduciary obligations are consensual is grounded in considerations of both economic efficiency and party autonomy because it treats the parties' own preferences as paramount and it respects their right to decide for themselves on the shape and content of their relationship. On the other hand, the view that fiduciary obligations are imposed is grounded in the idea either that there is a moral dimension to fiduciary relationships which contract law does not capture or that fiduciary law has a public interest component which may trump the interests of the parties themselves. Paul Finn is one of the leading exponents of the higher morality thesis. He argues that whereas contract law allows both parties to promote their own respective interests, fiduciary law requires the principal to subordinate her own interests to the interests of the beneficiary.