Sally is a director of sp and, we assume, a director of mp as well. This means that she is in a conflict of interest position regarding any contract between the two corporations. Mp has entered into a contract with sp to purchase the snap seals. Sally should notify each corporation in writing of her conflict and refrain from voting to approve the contract. Frank, as a non-conflicted director, can then determine if it is in sp"s interest to enter into the contract. Sally, as (we assume) the only shareholder of mp can approve the contract on behalf of mp. Sally did not report the conflict and did not refrain from voting. As well, the actual contract is unfair to sp. Mp benefits to the amount of for each seal, and sp is selling the seals to other parties for . This means sally has breached her fiduciary duty to sp to get a fair contract.