Define: Personal Interest
Personal Interest, as used in a contract, describes any financial benefit or detriment that a member, employee, or director, or their immediate family, could gain from a decision, transaction, or relationship connected to the organization. Contracts flag this term to trigger disclosure duties, recusal requirements, or approval processes designed to prevent private gain from improperly influencing organizational decisions.
Legal accuracy standard set & glossary spot-checked by Imad Mohammed Nazar , Skadden-trained M&A lawyer, Legal Engineer at GenieAI
What Personal Interest Means in a Contract
Personal Interest refers to a situation where an individual connected to an organization, typically a member, director, or employee, stands to gain or lose financially because of a decision, contract, or transaction that the organization is considering. The financial dimension is central: the term is not about general opinions or preferences, but about money, property, equity, commissions, or other tangible advantages that could flow to the individual or to someone closely tied to them.
Contracts and internal policies use this term to identify moments where an individual's judgment might be compromised because they, or their immediate family, have something to gain or lose. Once a Personal Interest is identified, the agreement typically requires that it be disclosed, and often that the interested person step back from voting, negotiating, or approving the matter in question.
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