united-states contract-law oregon
Is a contract agreed to in an illegal way binding?
<p>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?</p>

<p>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.</p>
<p>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 <em>formation</em> 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</p>
<p><a href="http://www.arrl.org/files/file/Regulatory/March%208,%202018.pdf" rel="nofollow noreferrer">§97.113</a> of the FCC rules states the prohibited transmissions, the two relevant clauses being that the prohibited list includes</p>
<blockquote>
<p>(2) Communications for hire or for material compensation, direct or
indirect, paid or promised, except as otherwise provided in these
rules;</p>
<p>(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…</p>
</blockquote>
<p>(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 <a href="http://www.arrl.org/files/media/News/ARRL%20appropriate%20use%20guidelines.pdf" rel="nofollow noreferrer">this analysis</a>.</p>
<p>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 <em>first</em> 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.</p>
