4 ms·

Fixed the link above! Can I pester you with one more question? Is there anything in the law about good faith in contracts? Say, I sign a contract with a private

Fixed the link above! Can I pester you with one more question? Is there anything in the law about good faith in contracts? Say, I sign a contract with a private school for my son's education. (Note, this is a ridiculous scenario) that includes binding arbitration. If I find that a teacher has been sexually abusing him and the administration tried to cover it up, would I be restricted from a lawsuit and only allowed binding arbitration?

Lazare 10y ago
Talk to a lawyer in your local jurisdiction. :) But offhand: > Is there anything in the law about good faith in contracts? Not in the sense you mean, no. Generally speaking, if they sign it in bad faith (that is, with no intent to comply), and they do not comply, that would be fraud (ie, a crime). If they sign it in good faith (that is, with an intent to comply) but later do not comply, that's breach of contract (ie, a tort) but not fraud. In both cases the contract is broken, but only because they broke it. The intent to break it isn't really relevant to that. Generally speaking the solution for your question is "make sure the contract contains a clause that automatically terminate the contract on initiation of a criminal investigation for child abuse by the authorities" if you're worried about that. Edit: It's not directly relevant to your question, but I feel like I should link this article which is hilarious and disturbing, and goes into some details on the fraud/breach of contract distinction. https://www.bloomberg.com/view/articles/2016-05-23/countrywide-mortgage-hustle-turns-out-not-to-be-fraud https://www.bloomberg.com/view/articles/2016-05-23/countrywi...
- FullMtlAlcoholc 10y ago
  Aahh, ok. So say I sign a contract with a co-founder to develop an app. This co-founder is secretly part of my competition and he steals my source code for his company. That would be fraud?
  - tonybako 10y ago
    Not necessarily. Typically your contract will be with the company you co-founded. Your co-founder is entering your company into a contract with you by signing as an authorized officer on behalf of the company. If that contract assigns the IP to your company, your cofounder is stealing your company's IP. If the contract says the source code is your IP (and perhaps licenses its use to the company for some permitted purpose), then your co-founder is stealing from you. Now, if you can show the sole purpose of him forming the business with you was to steal your source code, then that's fraud.
- bjelkeman-again 10y ago
  Re the link. It seems a step here would be to implement an automatic question in the transaction. "Are the new mortgages Acceptable." Seems less burdensome to clarify the law, but that may be a naive view on my behalf.
- FullMtlAlcoholc 10y ago
  But why? If one can prove that a party premeditated and willfully went against the terms of the contract in order to deceive the other party and profited from this deceit while also breaking laws, what is the legal reasoning behind calling it a breach instead of fraud?
  - Lazare 10y ago
    Fraud is a crime; a general definition might be "deliberate deception to secure unfair or unlawful gain", but in simple terms it's lying. If you lie to someone for financial gain, it's a crime. But violating the terms of a contract is not a crime, at least in the general case. > But why? Because that's what the law says. :) > If one can prove that a party premeditated and willfully went against the terms of the contract in order to deceive the other party and profited from this deceit while also breaking laws Very, very simply: If you lied, it's fraud. If you didn't lie, then it's not fraud. It might well be some other crime, but it's not fraud, because fraud is a word that means lying. So you say: > went against the terms of the contract in order to deceive But it depends what you mean by that. If I meant to follow the contract when I sign it, but later change my mind, and you just assume I'm following it, you are deceived, but I didn't lie, and it's not fraud. If I didn't mean to follow it when I signed it then I'm lying and it's fraud. Similarly if I mean to follow it when I sign, later change my mind, and you then ask me "hey, are you following the contract?", and I say "yes" even though I'm not, then I'm lying, and it's fraud. The key element isn't whether or not you were deceived, or whether or not I actually followed the contract, but whether I lied, because that's what the crime is.
    - FullMtlAlcoholc 10y ago
      Man, and I thought programming had difficult edge cases :) From this post and the article you linked above, the takeaway I get is to ask everyday "Are you following the contract?" I understand the legal definition, but I gather that the layman will still think it's fraud. I guess a simple solution in that scenario would be to have a checkbox asking are you following the contract every time they login to the server. Thanks, I learned a lot from you! :D

Lazare 10y ago

Talk to a lawyer in your local jurisdiction. :) But offhand: > Is there anything in the law about good faith in contracts? Not in the sense you mean, no. Generally speaking, if they sign it in bad faith (that is, with no intent to comply), and they do not comply, that would be fraud (ie, a crime). If they sign it in good faith (that is, with an intent to comply) but later do not comply, that's breach of contract (ie, a tort) but not fraud. In both cases the contract is broken, but only because they broke it. The intent to break it isn't really relevant to that. Generally speaking the solution for your question is "make sure the contract contains a clause that automatically terminate the contract on initiation of a criminal investigation for child abuse by the authorities" if you're worried about that. Edit: It's not directly relevant to your question, but I feel like I should link this article which is hilarious and disturbing, and goes into some details on the fraud/breach of contract distinction. https://www.bloomberg.com/view/articles/2016-05-23/countrywide-mortgage-hustle-turns-out-not-to-be-fraud https://www.bloomberg.com/view/articles/2016-05-23/countrywi...

FullMtlAlcoholc 10y ago
Aahh, ok. So say I sign a contract with a co-founder to develop an app. This co-founder is secretly part of my competition and he steals my source code for his company. That would be fraud?
- tonybako 10y ago
  Not necessarily. Typically your contract will be with the company you co-founded. Your co-founder is entering your company into a contract with you by signing as an authorized officer on behalf of the company. If that contract assigns the IP to your company, your cofounder is stealing your company's IP. If the contract says the source code is your IP (and perhaps licenses its use to the company for some permitted purpose), then your co-founder is stealing from you. Now, if you can show the sole purpose of him forming the business with you was to steal your source code, then that's fraud.
bjelkeman-again 10y ago
Re the link. It seems a step here would be to implement an automatic question in the transaction. "Are the new mortgages Acceptable." Seems less burdensome to clarify the law, but that may be a naive view on my behalf.
FullMtlAlcoholc 10y ago
But why? If one can prove that a party premeditated and willfully went against the terms of the contract in order to deceive the other party and profited from this deceit while also breaking laws, what is the legal reasoning behind calling it a breach instead of fraud?
- Lazare 10y ago
  Fraud is a crime; a general definition might be "deliberate deception to secure unfair or unlawful gain", but in simple terms it's lying. If you lie to someone for financial gain, it's a crime. But violating the terms of a contract is not a crime, at least in the general case. > But why? Because that's what the law says. :) > If one can prove that a party premeditated and willfully went against the terms of the contract in order to deceive the other party and profited from this deceit while also breaking laws Very, very simply: If you lied, it's fraud. If you didn't lie, then it's not fraud. It might well be some other crime, but it's not fraud, because fraud is a word that means lying. So you say: > went against the terms of the contract in order to deceive But it depends what you mean by that. If I meant to follow the contract when I sign it, but later change my mind, and you just assume I'm following it, you are deceived, but I didn't lie, and it's not fraud. If I didn't mean to follow it when I signed it then I'm lying and it's fraud. Similarly if I mean to follow it when I sign, later change my mind, and you then ask me "hey, are you following the contract?", and I say "yes" even though I'm not, then I'm lying, and it's fraud. The key element isn't whether or not you were deceived, or whether or not I actually followed the contract, but whether I lied, because that's what the crime is.
  - FullMtlAlcoholc 10y ago
    Man, and I thought programming had difficult edge cases :) From this post and the article you linked above, the takeaway I get is to ask everyday "Are you following the contract?" I understand the legal definition, but I gather that the layman will still think it's fraud. I guess a simple solution in that scenario would be to have a checkbox asking are you following the contract every time they login to the server. Thanks, I learned a lot from you! :D