Oral Contracts and Fiduciary Duty - New Case From The Seventh Cir

The Seventh Circuit gives us a pithy definition of fiduciary duty in INTERACTIVE INTELLIGENCE, INCORPORATED v. KEYCORP, KEYBANK NATIONAL ASSOCIATION

Our conclusion is buttressed by Wilson v. Lincoln Federal Savings Bank, 790 N.E.2d 1042, 1046 (Ind. Ct. App. 2003), where the court says that a “business or ‘arm’s length’ contractual relationship does not give rise to a fiduciary relationship. That is, the mere existence of a relationship between parties of bank and customer or depositor

It is true that a bank may owe a customer a fiduciary duty if a confidential relationship exists between them. Paulson v. Centier Bank, 704 N.E.2d 482 (Ind. Ct. App. 1998). But there is nothing confidential in the FX transaction. The uncontroverted evidence shows that Interactive’s employees knew that exchange rates were available on the Internet and in the Wall Street Journal. In fact, on occasion, Interactive employees asked KeyBank about the reasons for the difference between published rates and the rates the bank was using. This is simply not a situation in which the bank was acting as a fiduciary.

No fiduciary duty exists in an ordinary business transaction but only where the relationship includes the element of confidentiality.

People assume an oral contract is no contract and are shocked when I explain it can be a contract, that a contract is not the paper but the agreement. This paragraph reminds me that oral contracts cannot be vague even if oral:

The supposed oral contract is too vague to be enforceable. See Pepsi-Cola Gen. Bottlers, Inc. v. Woods, 440 N.E.2d 696 (Ind. Ct. App. 1982). An agreement to work out more definite terms at some future time is not enforceable. Wolvos v. Meyer, 668 N.E.2d 671 (Ind. 1996). That is all that See Pepsi-Cola Gen. Bottlers, Inc. v. Woods, 440 N.E.2d 696 (Ind. Ct. App. 1982). An agreement to work out more definite terms at some future time is not enforceable. Wolvos v. Meyer, 668 N.E.2d 671 (Ind. 1996).