A 'fidiciary' relationship is one that the law recognises is, of necessity, based on trust. Not every relationship is of this type. For example, contracting parties are considered to deal at arm's length, each party looking after their own best interests. But in the case of an agent and their principal, or the director of a company and the company itself, the parties do not deal with each other at arm's length - they deal with each other on the basis of trust and this gives rise to various duties, such as the duty to act in accordance with good faith, and not to make secret profits.