Consequences of the conflict of interest of the director as the agent and the juristic person as the principal
Abstract
The aim of this article is to critically analyse the consequences of the breach of the prohibition of the conflict of interest imposed on a representative of a juristic person by the New Civil Code and the Act on Business Corporations. The core of the question is, whether the general provisions on conflict of interest in the New Civil Code are applicable on the conflict of interest emerging between the representative of the juristic person resp. business corporation and the juristic person resp. business corporation itself.
In the praxis it is questionable, whether the existence of the conflict of interest is merely an internal issue of the juristic person without an impact on the outside relations or it may in certain cases cause invalidity of the legal transaction made by the representative on behalf of the juristic person.