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.
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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.