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Understanding business self-dealing

On Behalf of | Aug 9, 2021 | Business And Commercial Law |

In business, self-dealing occurs when a person who has a fiduciary duty acts in his or her own best interest instead of the best interest of the business. A fiduciary has ethical and legal responsibilities to the business.

Self-dealing is a breach of fiduciary duty, specifically the duty of loyalty. It is a conflict of interest, it can cause the fiduciary to lose his or her job and it may be against the law.


There are many types of people who have fiduciary responsibilities. These include trustees, attorneys, board members, corporate officers and financial advisors, among others.

Self-dealing may include actions like using company money as a personal loan or using insider information for stock market transactions. If a business partner took an opportunity for him or herself that was intended for all of the partners, that is an example of self-dealing.

It can also involve vendor relationships. If a company executive chooses a vendor in return for a personal favor, that is also self-dealing.


Businesses can sometimes resolve disputes internally. However, if they cannot, they may need the court to decide the outcome.

For the business to successfully prove self-dealing to the court it must demonstrate several elements. First, the business must show that a fiduciary relationship exists between the business and the person who the claim is filed against.

Then, the business must show that he or she breached their fiduciary duty and the breach caused the business financial damage. An experienced attorney can help businesses address their disputes and provide representation.