Is violating a valid contract illegal?

[BaldiMac]

BaldiMac, you seem to still be confused.

...

You seem to really be struggling with understanding this and I don't know why you're so persistent in being wrong. Have you studied law? From what you've posted, you don't even seem to have a rudimentary knowledge of the law. Maybe there are some things you just need to accept that you are wrong about. Keep in mind that you are the only one who's been arguing your position, everyone else has been saying what I've been saying too. It seems everyone else has grown tired of trying to get through to you and, frankly, so have I. You can believe what you want to believe, but you will be wrong.

Maybe you can try responding directly to my points, rather than simply saying I'm wrong. I have no interest in posting personal information on this forum. I posted a response on Quora from a JD cum laude that agreed with my position. Somehow the forum consensus (which keeps arguing that if it's not criminal, it's not illegal) doesn't prove your point to me.

There are two ways laws are created - through statute and through common law. Statute is create through Parliament and common law created through courts and precedent.

I understand that. If fact, I pointed it out to you.

If something is 'against the law' it is not 'illegal' unless it is against what is written in statute. If its against the settled common law, it is not 'illegal' as it is not necessarily against what is written in a statute.

You just made up that definition to fit your point.

Here are actual definitions:

From Merriam-Webster: "not according to or authorized by law"
From Google: "Contrary to or forbidden by law"
From Dictionary.com: "forbidden by law or statute"

You'll notice something that all of these definitions have in common. None of them limit the term to statutory law.

In regards to copyright law, in Australia a breach of copyright is a civil matter and thus must be dealt with by the aggrieved individual. It is not illegal. We have an Act (The Australian Copyright Act 1968) that specifies the rights a copyright holder has, but it also specifies in s 115 that it is up to the copyright holder to bring an action. The only offences are contained in s 132AC relating to commercial scale infringement.

Again, why do you think breaches of civil law are not illegal, despite the fact that it "is against what is written in statute" as you defined the word?

 

[snberk103]

I'm not sure how copyright got brought into this... but I'm going to ignore it I think that area is something outside of contracts.

It is not 'illegal' to break a valid contract (with some exceptions for consumer protections) simply because the government does not care if you break a valid contract (except with the state of of course!). The state will not come after you for breaking a contract (unless your intent was fraud, or unless it can be tied to theft.)

There are not laws written that say "thou shalt not break a contract."

However... where contract law comes into play is that there are laws that allow the aggrieved party to sue for damages. In this case the laws are written allow an action if you are damaged. It is legal to pursue damages and a settlement in court, or to send in the repo people. But that is not quite the same as breaking the contract being illegal.

But of course my opinion is just that, and carries as much weight as anybody else's.

 

[LorenK]

The problem with the whole discussion is that it the answer depends on what you understand the word "illegal" to mean, as it has both a common meaning and a legal sense as well. The common meaning is generally focused on a violation of criminal law, so then the answer to the question would be no. On the other hand, there are a number of instances where the violation of a contract has been criminalized under the law, in which case the answer is yes.

As a lawyer, if I am talking to a client, I phrase my answer based on my client's question and the context in which it is raised, so my general answer would be no, violating your contract would not be illegal, but it would expose you to damages that result from the breach of the contract. I would not say it was illegal, unless the client provides me with special facts that would lead me to look at criminal statutes for which the failure to abide by the terms of the contract could result in criminal sanctions.

As to the question itself, it's a "gotcha" type question, because the mere fact of the asking suggests that there are facts that have not been disclosed. If a client is asking this question, then I am going to be asking the client what is the basis for the question, so the the answer is not going to be to this seemingly simple question, but rather to the more elaborate explanation of why the question in the first place.

 

[BaldiMac]

The problem with the whole discussion is that it the answer depends on what you understand the word "illegal" to mean, as it has both a common meaning and a legal sense as well. The common meaning is generally focused on a violation of criminal law, so then the answer to the question would be no. On the other hand, there are a number of instances where the violation of a contract has been criminalized under the law, in which case the answer is yes.

As a lawyer, if I am talking to a client, I phrase my answer based on my client's question and the context in which it is raised, so my general answer would be no, violating your contract would not be illegal, but it would expose you to damages that result from the breach of the contract. I would not say it was illegal, unless the client provides me with special facts that would lead me to look at criminal statutes for which the failure to abide by the terms of the contract could result in criminal sanctions.

As to the question itself, it's a "gotcha" type question, because the mere fact of the asking suggests that there are facts that have not been disclosed. If a client is asking this question, then I am going to be asking the client what is the basis for the question, so the the answer is not going to be to this seemingly simple question, but rather to the more elaborate explanation of why the question in the first place.

I provided three definitions from various dictionaries that clarified that illegal does not only refer to criminal, or even statutory, law. I also clarified in the OP that my question was not limited to criminal law.

 

[BaldiMac]

I'm not sure how copyright got brought into this... but I'm going to ignore it I think that area is something outside of contracts.

I brought up copyright infringement as a counter-example to the claim that the government prosecutes anything that is illegal.

It is not 'illegal' to break a valid contract (with some exceptions for consumer protections) simply because the government does not care if you break a valid contract (except with the state of of course!). The state will not come after you for breaking a contract (unless your intent was fraud, or unless it can be tied to theft.)

There are not laws written that say "thou shalt not break a contract."

However... where contract law comes into play is that there are laws that allow the aggrieved party to sue for damages. In this case the laws are written allow an action if you are damaged. It is legal to pursue damages and a settlement in court, or to send in the repo people. But that is not quite the same as breaking the contract being illegal.

But of course my opinion is just that, and carries as much weight as anybody else's.

That's a reasonable argument. My counter would be to go back to the copyright example. There are no laws that say "thou shalt not make a copy". There are simply laws that define the rights of the copyright holder and detail their ability to sue for damages should those rights be violated. Much like contract law.

 

[aicul]

Maybe if you explain "why you ask", the answers can be more focused

 

[BaldiMac]

Maybe if you explain "why you ask", the answers can be more focused

Just an intellectual exercise, I suppose. It started with the claim in this post in another thread.

https://forums.macrumors.com/showthread.php?p=15150183#post15150183

 

[snberk103]

I brought up copyright infringement as a counter-example to the claim that the government prosecutes anything that is illegal.

....

That's a reasonable argument. My counter would be to go back to the copyright example. There are no laws that say "thou shalt not make a copy". There are simply laws that define the rights of the copyright holder and detail their ability to sue for damages should those rights be violated. Much like contract law.

Linking the two doesn't necessarily mean that they are same thing. That's like looking at an onion and an apple, and saying that because they are both round, and one is fruit then the other one will make a good apple pie too.

One is an agreement between two people to get something done. Copyright infringement does not usually involve an agreement, it usually involves a theft.

Also, not all copyright infringement is 'illegal' (as in banned by statute). If I sell one-time usage rights for a photograph to a magazine, and they end up using it more than once, they have not done anything "illegal" (in the sense I've been arguing). They have, however, caused me 'damages' and I can sue for those damages - because they have broken the contract we had.

If someone is using my photograph without contacting me first, then there is no contract, and we are into something else - something I call theft, and about which the state has in fact written laws.

 

[BaldiMac]

Linking the two doesn't necessarily mean that they are same thing. That's like looking at an onion and an apple, and saying that because they are both round, and one is fruit then the other one will make a good apple pie too.

One is an agreement between two people to get something done. Copyright infringement does not usually involve an agreement, it usually involves a theft.

Also, not all copyright infringement is 'illegal' (as in banned by statute). If I sell one-time usage rights for a photograph to a magazine, and they end up using it more than once, they have not done anything "illegal" (in the sense I've been arguing). They have, however, caused me 'damages' and I can sue for those damages - because they have broken the contract we had.

If someone is using my photograph without contacting me first, then there is no contract, and we are into something else - something I call theft, and about which the state has in fact written laws.

While your last argument was very well considered, this one is all over the place. I'm not sure of the distinctions you are trying to make. Both or your examples involve infringing the rights of the copyright holder. Both examples violate the same law.

 

[snberk103]

While your last argument was very well considered, this one is all over the place. I'm not sure of the distinctions you are trying to make. Both or your examples involve infringing the rights of the copyright holder. Both examples violate the same law.

No... the 1st one violates a contract, and my remedy is to pursue the matter as I would any contract dispute. In the second example there is no contract, so I can't use the mechanisms in place to settle contract disputes. Depending on where and how the photograph is being used I would seek different remedies.

 

[BaldiMac]

No... the 1st one violates a contract, and my remedy is to pursue the matter as I would any contract dispute. In the second example there is no contract, so I can't use the mechanisms in place to settle contract disputes. Depending on where and how the photograph is being used I would seek different remedies.

In both cases, you would sue for copyright infringement. Both situations are exactly the same legally. In both situations the magazine/person are making one unauthorized copy of your photograph in violation of your rights as copyright holder.

(Of course, depending on the terms of your contract, you may have specified other rights or penalties in the agreement. But the only term you specified in your scenario was a limit of one copy.)

 

[snberk103]

In both cases, you would sue for copyright infringement. Both situations are exactly the same legally. In both situations the magazine/person are making one unauthorized copy of your photograph in violation of your rights as copyright holder.

(Of course, depending on the terms of your contract, you may have specified other rights or penalties in the agreement. But the only term you specified in your scenario was a limit of one copy.)

With respect, they are not the same thing. In the 1st case the magazine (for e.g.) will be arguing that they interpret the contract differently - that they do in fact have a right to use the image. The dispute is not whether they are stealing my photo - the dispute is whether or not they had already paid for that usage. It is a pure contract dispute. (There are exceptions of course, for example when the usage is a massive and blatant misuse, and where the intention had been to misuse the images. But the vast majority of cases it is simply a difference of opinion regarding what the contract says.)

In the 2nd case there is no contract, therefore the intent was always to misuse the images, and that is theft and resolved differently.

 

[BaldiMac]

With respect, they are not the same thing. In the 1st case the magazine (for e.g.) will be arguing that they interpret the contract differently - that they do in fact have a right to use the image. The dispute is not whether they are stealing my photo - the dispute is whether or not they had already paid for that usage. It is a pure contract dispute. (There are exceptions of course, for example when the usage is a massive and blatant misuse, and where the intention had been to misuse the images. But the vast majority of cases it is simply a difference of opinion regarding what the contract says.)

In the 2nd case there is no contract, therefore the intent was always to misuse the images, and that is theft and resolved differently.

You didn't specify that the contract was poorly worded. You said it entitled them to one use.

Regardless, an unclear license may be a defense against copyright infringement, but you would still sue them for copyright infringement. (Unless you are going to make up other terms to the contract as well.) Just like you would sue a company for copyright infringement for violating your SLA if we were talking about software.

Both cases are examples of copyright infringement. And both are examples of theft, in the sense that the company is interfering with your property rights.

 

[claygreenberg]

Again, illegal does not equal criminal! Illegal is not defined by jail time. Most common traffic offenses are illegal and yet are only punishable by a fine.

You even acknowledge that contracts can be "legally binding" -- as in bound by law. But you don't seem to acknowledge the law that binds them actually exists.

As far as your copyright claim, I don't know how much more clear it could be that your position is wrong. Just using the limited definition that you chose, copyright infringement is obviously "forbidden by law or statute." Do you need a link to the law?





Again, I am not claiming that it is criminal. It is not. Only that it is illegal.

A private contract between two parties is not governed by statutory law. The term illegal, while not limited to violations of the criminal code, is limited to statutory or regulatory violations. Yes, there is a body of "contract law," but it not statutory. Rather, it is part of the common law (judge-made law, shaped by judicial decisions over time). It is definitely not "illegal" to breach a private contract. When people say that a valid contract is "legally binding," they mean that it creates a "cause of action" in the event of a breach of its terms. This means that you are allowed to sue someone in a civil court if you suffer demonstrable economic damages as a a result of a breach a contract.

Some of our nation's most esteemed judges have written judicial opinions in which they reason that the party in breach of a contract was practicing proper economic efficiency in deciding to breach it. Look up judge Richard Posner, US Court of Appeals. He's just one of many.

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Linking the two doesn't necessarily mean that they are same thing. That's like looking at an onion and an apple, and saying that because they are both round, and one is fruit then the other one will make a good apple pie too.

One is an agreement between two people to get something done. Copyright infringement does not usually involve an agreement, it usually involves a theft.

Also, not all copyright infringement is 'illegal' (as in banned by statute). If I sell one-time usage rights for a photograph to a magazine, and they end up using it more than once, they have not done anything "illegal" (in the sense I've been arguing). They have, however, caused me 'damages' and I can sue for those damages - because they have broken the contract we had.

If someone is using my photograph without contacting me first, then there is no contract, and we are into something else - something I call theft, and about which the state has in fact written laws.

It's advisable not to make comparisons between intellectual property law and contract law. They are different bodies of law entirely.

 

[BaldiMac]

The term illegal, while not limited to violations of the criminal code, is limited to statutory or regulatory violations.

According to whom? I posted three definitions from common sources that make no such distinction.

 

[claygreenberg]

According to whom? I posted three definitions from common sources that make no such distinction.

According to a law student (me) who has studied contracts. by the way, look at the comment appended to the JD quote you provided. It gets to the issue that we all seem to be missing.

You are correct that the term "illegal" is not limited in application to criminal violations, but . . .

The definitions you cited are fine, but provide only a circular argument. In other words, you can't say that something is "contrary to law" unless you know that it is, indeed, contrary to law. The fact is that breach of contract does not comport with any of your definitions. It is not contrary to law. It is contrary to the contract itself. Many contracts are actually against the law or otherwise invalid, and parties dont know so until the court is called upon to enforce it. Now, in some cases, the action that gives rise to the breach may also be contrary to law, but those are separate issues.

Let's look at the the definition of Breach of Contract in Black's Law Dictionary:

breach of contract. (17c) Violation of a contractual obligation by failing to perform one's own promise, by repudiating it, or by interfering with another party's performance.

And now the definition of Efficient Breach of Contract:


efficient breach. (1977) An intentional breach of contract and payment of damages by a party who would incur greater economic loss by performing under the contract. See EFFICIENT-BREACH THEORY.

The idea of efficient breach of contract is often endorsed by the court system. Since contract law falls under common law (judge-made law), this very fact should be enough to convince you that breach of contract is not illegal. It is merely a violation of the contract.

 

[BaldiMac]

According to a law student (me) who has studied contracts. by the way, look at the comment appended to the JD quote you provided. It gets to the issue that we all seem to be missing.

You are correct that the term "illegal" is not limited in application to criminal violations, but . . .

And yet your first response on this topic was to argue that it's not illegal because you are not found "guilty" and it's not a crime.

The definitions you cited are fine, but provide only a circular argument. In other words, you can't say that something is "contrary to law" unless you know that it is, indeed, contrary to law. The fact is that breach of contract does not comport with any of your definitions. It is not contrary to law. It is contrary to the contract itself.

It is also contrary to the rights and duties defined through common law (and statutes in certain areas) regarding contractual obligations.

Many contracts are actually against the law or otherwise invalid, and parties dont know so until the court is called upon to enforce it. Now, in some cases, the action that gives rise to the breach may also be contrary to law, but those are separate issues.

Which is why I specified a valid (legally-binding) contract.

Let's look at the the definition of Breach of Contract in Black's Law Dictionary:

breach of contract. (17c) Violation of a contractual obligation by failing to perform one's own promise, by repudiating it, or by interfering with another party's performance.

And now the definition of Efficient Breach of Contract:

efficient breach. (1977) An intentional breach of contract and payment of damages by a party who would incur greater economic loss by performing under the contract. See EFFICIENT-BREACH THEORY.

The idea of efficient breach of contract is often endorsed by the court system. Since contract law falls under common law (judge-made law), this very fact should be enough to convince you that breach of contract is not illegal. It is merely a violation of the contract.

I would agree that it isn't illegal in certain circumstances under judicial oversight, but you can say that about a lot of other things that would otherwise be illegal.

 

[claygreenberg]

And yet your first response on this topic was to argue that it's not illegal because you are not found "guilty" and it's not a crime.



It is also contrary to the rights and duties defined through common law (and statutes in certain areas) regarding contractual obligations.



Which is why I specified a valid (legally-binding) contract.



I would agree that it isn't illegal in certain circumstances under judicial oversight, but you can say that about a lot of other things that would otherwise be illegal.

The problem is that, in many cases, parties to a contract are unaware that the contract is invalid until it is brought before a court to enforce or for declaratory judgment. In fact, it could just as well be "illegal" to perform a contract in some cases. Since contracts generally are not ratified by a court at the time they are entered into, the validity cannot be determined until it is challenged or otherwise brought to court. An action cannot be illegal unless a reasonable person of sound mind under the same circumstances would know it were illegal prior to the action. This is not and cannot be the case with a private contract.

 

[BaldiMac]

The problem is that, in many cases, parties to a contract are unaware that the contract is invalid until it is brought before a court to enforce or for declaratory judgment. In fact, it could just as well be "illegal" to perform a contract in some cases. Since contracts generally are not ratified by a court at the time they are entered into, the validity cannot be determined until it is challenged or otherwise brought to court. An action cannot be illegal unless a reasonable person of sound mind under the same circumstances would know it were illegal prior to the action. This is not and cannot be the case with a private contract.

Again, this is why I specified a valid (legally-binding) contract in posing the question.

 

[claygreenberg]

Again, this is why I specified a valid (legally-binding) contract in posing the question.

Again, this is why you are missing my point. The validity of a contract cannot be determined with legal finality (i.e. by the court system) until well after it is formed. Therefore, breach of contract is not illegal. In fact, under some contracts, breach may be required by law. In addition, efficient breach of contract is often permitted by the courts on grounds of economic efficiency.

A contract does not create law and it does not supersede law.

 

[BaldiMac]

Again, this is why you are missing my point. The validity of a contract cannot be determined with legal finality (i.e. by the court system) until well after it is formed. Therefore, breach of contract is not illegal. In fact, under some contracts, breach may be required by law. In addition, efficient breach of contract is often permitted by the courts on grounds of economic efficiency.

How could I be missing the point when I was the one that posed the question? I'm not claiming that violating an invalid or otherwise non-legally-binding contract is illegal.

A contract does not create law and it does not supersede law.

Sure, but the binding nature of the contract is governed by law.

 

[claygreenberg]

How could I be missing the point when I was the one that posed the question? I'm not claiming that violating an invalid or otherwise non-legally-binding contract is illegal.

Because the validity of a contract is usually not determined unless/until it is breached or otherwise disputed in court. It is often impossible to know whether a contract is valid when forming it. The law doesn't work the way you presume in your answers. People are not expected to predict whether or not something is illegal when, in fact, no one will know until a jury (or judge in bench trial) makes a finding.

Sure, but the binding nature of the contract is governed by law.

No, the binding nature is governed by the contract.

 

[BaldiMac]

Because the validity of a contract is usually not determined unless/until it is breached or otherwise disputed in court. It is often impossible to know whether a contract is valid when forming it. The law doesn't work the way you presume in your answers. People are not expected to predict whether or not something is illegal when, in fact, no one will know until a jury (or judge in bench trial) makes a finding.

Again, this theoretical concern is unrelated to the question that I posed. I specified that the contract is valid.

No, the binding nature is governed by the contract.

That's just silly. Without contract law, there is nothing to bind a contract outside of the integrity of the adherents. I don't understand how you can acknowledge the term "legally-binding" without the understanding that such contracts are bound by law.

 

[snberk103]

...
That's just silly. Without contract law, there is nothing to bind a contract outside of the integrity of the adherents. I don't understand how you can acknowledge the term "legally-binding" without the understanding that such contracts are bound by law.

Let me ask you this. In your understanding... Lets say we are neighbours. You and I shake hands on deal where you lend me your lawn mower today, and in exchange you can borrow my ladder next week. I cut my lawn today with your lawn mower, and then I change my mind and don't let you use my ladder. Have I done anything illegal?

 

[BaldiMac]

Let me ask you this. In your understanding... Lets say we are neighbours. You and I shake hands on deal where you lend me your lawn mower today, and in exchange you can borrow my ladder next week. I cut my lawn today with your lawn mower, and then I change my mind and don't let you use my ladder. Have I done anything illegal?

I doubt such an arrangement would be considered legally-binding.