Conflict Of Interest Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Conflict Of Interest, written in plain English, along with examples of how it is used.
What is Conflict Of Interest?
It refers to the situation where a person who has been entrusted certain duties or who has been a holding a postion of trust in an organisation, is having a conflicting effects on his/her duties and his/her personal gain. For eg. A consumer comes to lawyer to file a case against an appliance manufacturing company of which the lawyer os a mahority of shareholder. It becomes a conflict of interest for the lawyer between his duties and his persoanl gain.
History and Meaning of Conflict Of Interest
A conflict of interest occurs when an individual or organization is involved in multiple interests or roles that could clash with each other. This means that the individual's decision-making ability is potentially compromised by their conflicting interests. Conflicts of interest can arise in many situations, including employment, relationships, and financial investments.
The term "conflict of interest" has been in use since the early 1900s, and it is an important concept in both business and politics. Conflicts of interest can range from minor issues, such as an employee receiving a gift from a customer, to major ethical concerns, such as a public official using their position to benefit themselves or their family.
Examples of Conflict Of Interest
- A doctor who is also a shareholder in a pharmaceutical company prescribing medications from that company to their patients.
- A judge ruling on a case involving a company that has made a significant contribution to their campaign.
- A financial advisor recommending investments in a company in which they have a personal stake that could benefit from the investment.
- A journalist writing a story about a company owned by their close friend without disclosing their relationship.
- A university researcher accepting funding from a company while conducting research that could benefit that company.
Legal Terms Similar to Conflict Of Interest
- Self-dealing: This term refers to a situation where an individual in a position of trust uses their position for personal gain.
- Fiduciary duty: This term refers to a legal obligation that requires an individual in a position of trust to act in the best interest of the other party or parties.
- Insider trading: This term refers to the illegal practice of buying or selling securities based on non-public information that can affect the stock's value.