The interests of both parties in a transaction are in conflict. A lawyer cannot represent both parties. A lawyer serves his/her client and protects his/her client’s interests. If there is a conflict of interest, a lawyer cannot protect both parties’ interests. What is a conflict of interest? It is where you win and I lose, or your gain and my loss. For example, in a purchase transaction, the seller wants the selling price as high as possible, but the buyer wants the selling prices as low as possible; the seller wants the representations in the contract as little as possible, but the buyer would like the seller to make more representations. Therefore, the interests of the seller and the buyer are in conflict. If they retain the same lawyer, it will be easy to have problems. The conflict of interest will be more complicated if there are multiple parties in a transaction. For example, a company is negotiating with its lender to enforce the mortgage. My client is the guarantor. The interests of the borrower and the lender are in conflict (the lender would like to have the loan paid back as much as possible; but the borrower wants the payback as little as possible). If the borrower’s lawyer think that interests of the borrower and the guarantor are in conflict. It may not be correct. The interests of borrower and the guarantor are the same regarding the pay-off of the mortgage (they both would like to pay as little as possible). There is therefore no conflict of interest at this point. If the guarantor requires the borrower to compensate the paid-off amount, there will be a conflict of interest between them at that time.