Also known as: related person · related parties
Written by attorneys · grounded in primary & secondary sources — see below
2 senses
An individual connected to a lawyer or client by blood, marriage, or a close familial relationship. The connection determines whether a lawyer may prepare an instrument conveying a substantial gift from the client to the lawyer or that individual.
A person bearing a specified relationship to a director or officer that triggers conflict-of-interest rules for corporate transactions and business opportunities. The definition encompasses family members and certain business affiliates whose involvement creates a presumption of divided loyalty.
Each sense below has its own examples, sources, and questions.
An individual connected to a lawyer or client by blood, marriage, or a close familial relationship. The connection determines whether a lawyer may prepare an instrument conveying a substantial gift from the client to the lawyer or that individual.
Select any source to read its text and confirm it supports the definition.
A person bearing a specified relationship to a director or officer that triggers conflict-of-interest rules for corporate transactions and business opportunities. The definition encompasses family members and certain business affiliates whose involvement creates a presumption of divided loyalty.
Select any source to read its text and confirm it supports the definition.
Tammy represents Beth in a wetlands permitting matter. Beth decides to deed a $600,000 parcel to Tammy's first cousin Elle, who has volunteered on the land for years. Tammy drafts the deed. Because Elle shares no blood or marital tie with Beth and the volunteer history does not create a close familial relationship, the preparation violates the prohibition on instruments benefiting a lawyer's related person.
A non-relative qualifies only when the client maintains a close familial relationship with that individual. Volunteer work or professional collaboration, even over many years, does not satisfy the standard unless the bond involves the intimacy and interdependence typical of family ties.
Supporting sources
Director Rowan serves on the board of Rising Sun Electronics. The articles contain a provision eliminating the duty to offer certain business opportunities to the corporation. Rowan wishes to pursue an opportunity personally through a company owned by his spouse. The provision cannot apply to that pursuit because the spouse qualifies as a related person of the officer.
No. The articles may limit or eliminate the corporate opportunity duty for a director, but any application to an officer or a related person of that officer remains subject to the statutory restrictions on conflicting interest transactions.
Supporting sources