Suppose I, an amateur radio operator, want to buy a car from another amateur radio operator. I send him a contract over ham radio, and he agrees to it. We have violated amateur radio regulations by using it for commercial purposes, but does this nullify the contract?
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Can you expound on what you mean by sending a contract over the radio? Was it digitally transmitted in a format that was, or could be, printed and signed? Was the contract verbal? Was the car advertised via amateur radio? If not, how did you become aware the car was for sale? Did you know the seller ahead of time?– Michael HallJul 17, 2022 at 14:12
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@MichaelHall yes, let's say it was sent by radiofax. The signers knew each other previously and the buyer knew the car was for sale, they just signed the contract over radio.– SomeoneJul 17, 2022 at 15:09
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1What about a contract printed on paper that I have stolen? Apart from the problem that the shop I stole from could demand that I return all copies of those contracts printed on stolen paper back to them...– gnasher729Jul 17, 2022 at 16:19
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@gnasher, could the thief counter-sue for the rights to the created content on the paper?– Michael HallJul 17, 2022 at 16:28
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2@JonCuster there's a specific exemption for selling ham radio equipment.– SomeoneJul 18, 2022 at 14:12
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3 Answers
Contract law involves a number of parts, the most relevant here being the formation of a contract, and the enforcement of its terms. There are various rules about formation, such as that you cannot hold a gun to a person’s head to force them to say yes (the courts would then say there was no contract), and then under other conditions a term in a contract might be illegal, for instance the courts will not order a person to commit a crime as one of the conditions of a contract.
In the scenario that you propose, no term of the contract involves an illegal action, the only presumed illegality is in the circumstances surrounding formation of the contract. Duress is illegal, because there is no voluntary mutual assent. That’s not the case here. So there is no established legal impediment to finding that a contract was formed. There are ample opportunities to test the theory that an element of illegality in the formation of a contract makes the contract void, for example if a physical instrument used in creating or transmitting the contract was used illegally (the paper was stolen, the paper was used without permission of the owner); the assent was made while trespassing; the contract language infringes copyright. Given the court’s very strong commitment to recognizing and enforcing contracts, it is highly unlikely that the courts would reject a contract over a technicality of this type
§97.113 of the FCC rules states the prohibited transmissions, the two relevant clauses being that the prohibited list includes
(2) Communications for hire or for material compensation, direct or indirect, paid or promised, except as otherwise provided in these rules;
(3) Communications in which the station licensee or control operator has a pecuniary interest, including communications on behalf of an employer, with the following exceptions…
(2) is not clearly applicable, since the communication is not for material compensation (e.g. A is not paying B to make a transmission). (3) is more likely applicable, since the parties each have a pecuniary interest in the communication. The exceptions involve being compensated for making a communication, or one can on an irregular basis offer amateur radio apparatus for sale or trade. Since the FCC regulations only provide bare languages and no explanatory texts, and they decline to provide any examples (this seems to be a policy thing), and there is substantial unclarity as to what the restrictions mean, see this analysis.
A finding of letter-of-the-law violation in this case cannot be made by the court in which breech of contract would be litigated. Instead, the FCC would have to first make a finding of law-breaking, then a party would have to prove in a separate cause of action that because of illegality in the circumstances surrounding formation of the contract, there never was an agreement.
answered Jul 17, 2022 at 16:11
As to being "illegal", (which is a strong word most often associated with criminal activity) if the FCC determined your data burst violated the terms and conditions of your radio station license agreement they might revoke your license, but they have no jurisdiction over car sales.
Now to the question of "binding" or not, there is no automatic voiding of the contract due to the medium used to communicate. (handshake, verbal, email, etc.) If they decide to go through with the sale nobody can stop them.
However, if either James or John wanted to get out of the agreement, and the other wanted to enforce it, one could challenge the other. The plaintiff may choose to make "commercial use" of amateur radio a pillar of their case that the contract is invalid, but it would be up to a judge to decide if the method of transmission of an intent to buy was germane.
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USC 47§97.113 (a) No amateur station shall transmit:... (3) Communications in which the station licensee or control operator has a pecuniary interest, including communications on behalf of an employer, with the following exceptions: [exceptions that don't apply]– SomeoneJul 17, 2022 at 16:03
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1This answer essentially just restates the question. What is the point?– bdb484Jul 17, 2022 at 18:16
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You're saying the answer can only come from a judge. Your unstated premise is that the judge's decision will be based on the law. So the question is whether the law says OP's contract is void, and your answer is that it depends on whether the law says OP's contract is void.– bdb484Jul 18, 2022 at 0:38
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@bdb484, Do you have the same critique of the final paragraph of user6726’s answer? Because it essentially says the same thing, and because specific laws can't cover every case, and eventually if it's litigated a Judge will decide. But if it isn't litigated it is binding, right? Jul 18, 2022 at 2:16
We have violated amateur radio regulations by using it for commercial purposes, but does this nullify the contract?
Most likely it does, since the use you describe hinders at least one fundamental purpose of an amateur radio service:
Recognition and enhancement of the value of the amateur service to the public as a voluntary noncommercial communication service, particularly with respect to providing emergency communications.
The purpose of this contract seemingly fails to outweigh public policy or public interest in enforcing the prohibition. See Restatement (Second) of Contracts at §181.
Furthermore, the existence of legislation in this regard is indicative of the strength of that policy. See Restatement at §178(3)(b). Other criteria listed therein go in the same direction and are self-explanatory.
Is a contract agreed to in an illegal way binding?
It depends on the specific circumstances, including each party's mens rea, during the formation of the contract. The aforementioned sections of the Restatement ought to determine the validity.
There are other obvious conditions that render a contract null and void, such as where it is entered under duress or coercion. However, that goes beyond the scope of your question.
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This answer seems to run contrary to general principles of contract law. Citations to relevant law would improve this answer.– bdb484Jul 17, 2022 at 18:14
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@bdb484 "This answer seems to run contrary to general principles of contract law." You're going to have to explain how Restatement at §§ 178, 181 depart from the principles of contract law in this context. Kiely v. Rayton Co., 105 F.3d 734, 736 (1997) is clear that "an agreement to achieve mutual benefit from the parties' cooperative violation of the law [...], even if explicitly agreed to by both parties, is void and unenforceable as against public policy". The radio operators' unawareness of the prohibition seems unlikely. Jul 17, 2022 at 19:51
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1Everything you're citing deals with contracts formed to engage in unlawful conduct. None of it addresses contracts negotiated through unlawful conduct, which is what OP is asking about. Imagine giving a phone scammer $10,000 to resolve your tax debts. Can a court void the contract and let him keep your money if it finds you should have known the phone call was illegal because you signed yourself up for the Do Not Call list?– bdb484Jul 17, 2022 at 21:16
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@bdb484 "None of it addresses contracts negotiated through unlawful conduct, which is what OP is asking about." Operating a ham radio without the requisite license for commercial purposes constitutes unlawful conduct, and Restatement at §181 addresses that scenario. "if it finds you should have known the phone call was illegal because you signed yourself up for the Do Not Call list?" That is a poor analogy and takes things out of the OP's context, in part because your scenario might or might not entail a claim of unjust enrichment. But feel free to post your own, separate question. Jul 17, 2022 at 23:47
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2I accept that the conduct in question is illegal. The problem is that you're conflating illegality in the formation of the contract with illegality in the performance of the contract. OP is asking about the former; your answer answer only addresses the latter.– bdb484Jul 18, 2022 at 0:27