Conflict of Interest

A conflict of interest is a situation in which a person has an interest that interferes with that person's ability to act in the interest of another when that person has an obligation to act in that other person's interest. This definition contains several crucial elements.

First, there must be an obligation to act in the interest of another. This kind of obligation is characteristic of fiduciaries, agents, and professionals (who are commonly agents and sometimes fiduciaries), all of whom are in positions of trust. A physician or an attorney, for example, like a trustee of a fund or a real estate agent, agrees, usually for a fee, to exercise specialized knowledge and skills for the benefit of another. As a result, there is an obligation, ...