Legal Definitions - accounting for profits

Definition: Accounting for profits is a legal action taken against a person who has breached their fiduciary duty to recover any profits they have gained from that breach. It is a remedy based on avoiding unjust enrichment.

For example, if a financial advisor invests their client's money in a company they know will fail, and then profits from that failure, the client can take legal action to recover those profits.

Another example would be if a trustee of a trust uses the trust's assets for their own personal gain, the beneficiaries of the trust can take legal action to recover any profits gained from that breach of fiduciary duty.

These examples illustrate how accounting for profits is a way to hold those in positions of trust accountable for their actions and prevent them from profiting from their wrongdoing.