Duty of Loyalty

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Duty of Loyalty is a term used in corporate law to describe a fiduciary's loyalty to a corporation.

Section 8.60 of Model Business Corporation Act states there is a conflict of interest when the director knows that at the time of a commitment that he or a related person is 1) a party to the transaction or 2) has a beneficial financial interest in the transaction that the interest.

[edit] Conditions of self-dealing transaction

A key player and the corporation are on opposite sides of the transaction
The key player has helped influence the corporation's decisions to enter the transaction
The key player's personal financial interest are at least potentially in conflict with the financial interests of the corporation.

Definition: General duty imposed on a person with power