Contract Glossary
Conflict of Interest
Definition
A situation where someone's personal interests or other obligations could interfere with their ability to act in your best interest. In contracts, a conflict of interest clause requires parties to disclose any relationships, financial interests, or competing obligations that could compromise the deal.
In Practice
You hire a consultant to evaluate three software vendors — and it turns out she owns stock in one of them. That's a conflict of interest. Without a disclosure clause, you might never know. Conflict of interest provisions require parties to disclose these situations and either resolve them or recuse themselves.
Common in these contract types
Related terms
Frequently asked questions about conflict of interest
Any situation where a party's personal, financial, or professional interests could influence their judgment or performance under the contract. Common examples: a consultant recommending a vendor they have a financial relationship with, an employee moonlighting for a competitor, or a board member voting on a deal that benefits their own company.
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Create your contractThis content is for informational purposes only and does not constitute legal advice. For contracts with significant financial or legal implications, review by a qualified attorney is recommended.