Jigsaw piece puzzle

Conflict of Interest (COI): Definition, Example and Related Terms

What is a Conflict of Interest (COI) ?

A 'COI' or Conflict of Interest, is a situation where someone has multiple interests, which could be financial or other types, that could potentially interfere with their ability to make fair decisions. This is especially important in contract law, as a COI can be a valid reason to cancel or 'void' a contract.

Here's an interesting fact: a COI doesn't always mean someone has done something wrong. It's more about the potential for unfairness. For example, if a person is in a position where they could potentially favor one party over another because of a personal relationship, that's a COI. It's about ensuring fairness and trust in all decisions.


  • Scenario Description
    Company Merger If a CEO of a company is also a major shareholder in a company they are planning to merge with, this could be seen as a COI, as they may not negotiate the best terms for their original company.
    Product Endorsement A famous athlete endorsing a sports drink while also owning a stake in the company that makes it could be a COI, as they might not be recommending the drink just because it's the best.