Waiver of conflicts: Overview, definition, and example
What is a waiver of conflicts?
A waiver of conflicts is a legal agreement where one party agrees to give up or "waive" its right to raise certain conflicts of interest in a situation where they might arise, usually between legal representatives or business partners. This often occurs in legal or business agreements where an individual or organization acknowledges that a potential conflict exists but agrees that it will not interfere with the relationship or transaction.
Why is a waiver of conflicts important?
A waiver of conflicts is important because it helps clear the path for individuals or companies to continue their relationships or agreements despite potential conflicts. For example, in law, a law firm might represent two clients with interests that may be at odds, but the clients could agree to waive the conflict and allow the firm to proceed. This waiver ensures that the parties involved do not disrupt the ongoing business or legal relationship over conflicts that may arise.
Understanding waiver of conflicts through an example
Imagine that a law firm is representing two companies in separate matters, but both companies are competitors in the same industry. There could be a conflict of interest because the firm’s work for one company may influence its work for the other. To resolve this, the companies may agree to a waiver of conflicts, meaning they allow the law firm to represent them both, knowing that potential conflicts could arise. By waiving their rights to challenge the firm’s involvement, they ensure the continuation of the legal relationship.
In another example, a partner in a business might have a potential conflict of interest due to their involvement in a competing business. However, if the other partners agree to a waiver of conflicts, they can proceed with the partnership, accepting the potential conflict but deciding that it won't interfere with the business's operations or success.
An example of a waiver of conflicts clause
Here’s how a waiver of conflicts clause might appear in a contract:
“The Parties acknowledge that a potential conflict of interest may arise from [Insert Situation], but agree to waive any objection to the continuation of this agreement or relationship based on such conflicts.”
Conclusion
A waiver of conflicts allows parties to proceed with relationships, contracts, or transactions even when conflicts of interest exist. It ensures that such conflicts will not derail business or legal matters, fostering smoother operations and continued collaboration. In many cases, it is a practical tool to manage and resolve conflicts while maintaining relationships.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.