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duty of loyalty

The duty of loyalty also focuses on conflicts of interest where the fiduciary's (or those associated with her) personal interests may be advanced over the corporate interests.

In duty of loyalty cases involving conflicts of interest, there is more judicial involvement and scrutiny than in duty of care or good faith cases. The difference is justified because, in a duty of care case, the courts want to protect business decisions that are intended to enhance corporate gain, while in a duty of loyalty involving a conflict of interest case the directors may be motivated by personal gain.

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