A conflict of interest arises when a professional's personal interest, or a duty to one party, could improperly influence, or appear to influence, the exercise of independent professional judgment owed to another. The NPPE distinguishes three types:
- Real (actual) conflict: a genuine clash exists now (e.g., specifying equipment from a company you secretly own).
- Apparent (perceived) conflict: a reasonable observer would perceive a conflict, even if your judgment is in fact unaffected.
- Potential conflict: circumstances that could become a real conflict in the future.
Crucially, apparent and potential conflicts must be managed just like real ones, because public trust depends on the appearance of integrity, not only its reality.
🧠 Memory hook: Disclose, then withdraw or obtain informed consent. The default cure for a conflict is prompt, full, written disclosure to all affected parties.
A professional must not accept compensation (fees, gifts, commissions) from more than one party on the same project without the full knowledge and consent of all parties. Gifts of more than nominal value that could influence judgment should be declined. Acting for two clients with opposing interests, or moving to "both sides" of a transaction, requires disclosure and often recusal.
Exam tip: The correct response to a conflict is rarely "ignore it because my judgment is sound." Even an apparent conflict requires disclosure. Silence plus self-assurance is the trap answer.