how IP Address Conflict

This problem persist due to when two computers on a same LAN or the Internet have been assigned the same range and same class of IP address. IP Address conflicts between two computers normally render either one or both of them unusable for network operations.

Why and How IP Address Conflicts
Two computers can acquire conflicting IP addresses in any of several ways given below:-
1. A System Administrator assigns two computers on the LAN the same static IP ddress.
2. A system administrator assigns a computer a static IP address within the local network's DHCP range (dynamic IP range), and the same address is automatically assigned by the LAN DHCP server.
3. A malfunction in the network's DHCP server allows the same dynamic address to automatically be assigned to multiple computers.
4. Internet Service Provider (ISP) accidentally assigns two customers the same IP address (either statically or dynamically).
5. A mobile computer is put into standby / hibernate mode and then awakened later.

Recognizing IP Address Conflicts
On most Microsoft Windows computers, if you attempt to set a fixed (static) IP address that is already active on the local network, you will receive the following pop-up error message:
The static IP address that was just configured is already in use on the network. Please reconfigure a different IP address.
On newer Microsoft Windows computers having dynamic IP conflicts, you should receive a balloon error message in the Taskbar as soon as the operating system detects the issue:
There is an IP address conflict with another system on the network.
Sometimes, especially on older Windows computers, a message similar to the following may instead appear in a pop-up window:
The system has detected a conflict for IP address...
On Mac or Linux computers, a similar message will normally appear on screen.

Resolving IP Address Conflicts
Try the following remedies for IP conflicts:
1. For networks where IP addresses are fixed (statically assigned), ensure each local host is configured with a unique IP address.
2. If your computer has a dynamically assigned address, releasing and renewing its IP address can workaround IP address conflicts. See also - How to Release / Renew IP Addresses on Windows
3. If your home router is believed to have a faulty DHCP server causing IP conflicts on the home network, upgrading the router firmware may resolve this problem.

Source: - http://compnetworking.about.com/od/workingwithipaddresses/f/ip_conflict.htm