Simple law question: why do loopholes exist?
Doesn't it defeat the purpose of a clean and proper legislation? In favor or against, what's the point of it then?
Andi WOW. Glad you guys won the case.
- AndiGravityLv 72 months agoFavorite Answer
Two main reasons.
First, the lawmakers want them to exist, for their own purposes. Maybe it benefits them. Maybe it benefits a particularly influential portion of their constituency, which benefits them. Maybe they just don't like a particular idea on general principle, but know the law's going to pass regardless of their objection, and being able to write in language which creates a loophole about whatever it is they don't like is the only option they're really left with.
Second, lawmakers can't think of everything. I can give you a fantastic example of that, which I personally went through.
My parents divorced when I was fifteen months old (I'm currently forty-six, so that was in 1975). When they did, rather than my mother and father splitting custody of my older brother and me, my mother and paternal grandparents split custody of us, and our father came to visit us during the time we lived with our grandparents. He wasn't around very much, to be honest.
Anyway, my grandfather had a massive heart attack in 1979, which his doctors didn't think he would survive, but he pulled through and lived another ten years.
Flash forward to 2011, and my grandmother finally dies. The instant she does, my father whips out a contract he claimed my grandparents signed in 1979, placing their entire estate into a constructive trust for his sole benefit. I knew from personal conversations with them they never had any such intentions, because they made it clear they planned on leaving the lion's share of their considerable estate to my brother and me (I know that sounds wrong, but it really is "my brother and me"). Plus, my grandmother left behind a will doing exactly that.
My father, however, contended the contract voided the will, so he petitioned to have my brother and me disinherited from our grandparents' estate, and himself re-designated as their sole heir.
It got better, though, because my father also claimed that since the contract had the effect of placing our grandparents' estate into a trust for his sole benefit, he wasn't just entitled to their estate as of the time they died, but to their entire estate at the moment they signed the contract, and while it was true he had dumped us on them in 1975, he did not give them permission to deplete their estate, and therefore his trust fund, on caring for the two of us after they signed the contract in 1979.
That made everything they spent on us from that moment forward technically property our grandparents stole from our father and illegally conveyed to my brother and me, which the law entitled him to recover from the two of us.
Or in other words, our father sued us for the cost of our childhoods, despite having contributed almost nothing to them.
As it turned out, there was a legal loophole which made him technically correct, because as it turned out, no legislature in the history of the United States had ever considered that a man might-- through a machination of the law to which his children were not a party, or even aware of the existence of-- transform everything he would normally be obligated to provide them into property they were stealing from him simply by passively receiving what they needed to survive from the adults caring for them.
Nobody, but NOBODY, in the history of this nation had apparently ever looked at the law as it stood and seriously thought "you know, I bet I could use that to stab my children in the back and not only take their entire inheritance away from them, but make them both write me fat checks for hundreds of thousands of dollars for money I never even spent on them to begin with!"
We were gobsmacked. Every attorney we talked to, none of whom had any idea how to even begin to approach the matter, were gobsmacked. The court was gobsmacked.
During the trial, as we were packing up at the end of the day after my father testified, the court reporter walked over to our side and said "I'm not supposed to say things like this, but your father is the worst human being I have ever seen."
Fortunately enough, we were able to win on two obscure legal points. We were able to convince the court the contract constituted a post-nuptial agreement since it changed the inheritance rights of each spouse, and Oklahoma law doesn't permit those. Second, we were able to convince the court that whatever else it was, the contract was a contract to devise a will, since the terms stipulated in the contract were that each of my grandparents would "leave any part of their estate not willed to the other" to my father. As it transpired, the way my father tricked our grandparents into signing the contract made my grandmother a bit too paranoid and she decided not to risk it, so instead of leaving each other their estates in a will, my grandmother had my grandfather combine his estate along with hers and placed everything in joint tenancy so no wills would be required.
That meant my grandfather never bothered drafting one because there was no point, which in turn meant the instant he died, he breached the terms of the contract, causing it to fail for want of consideration, leaving my grandmother free to void it at her discretion, which she did.
Still, we had to figure out how to navigate that situation from scratch, with no statutory or case law directly addressing the matter, because no one ever foresaw that loophole existing.
Humans aren't omniscient. No one can anticipate every circumstance, so they can't write laws which take every circumstance into account.
- SlickterpLv 72 months ago
Sometimes the loopholes aren't intentional.
- BruceLv 72 months ago
Loopholes are not intentional They exist because you can't write a law for every possible circumstance, or because something is overlooked. Eventually something happens that is challenged in court. Often times the court's ruling on the challenge is controversial or defies common sense.
For example, in my state someone got a speeding ticket in a school zone, the sign said "Speed limit 15 when children are present". An officer saw him zooming past a kid and gave him a ticket. He challenged the word "children" because it is plural, and there was only one child present. The judge bought it and dismissed the ticket. My state had to pass a law defining "children" as "one or more child"
- Anonymous2 months ago
Loopholes arise because law drafters cannot pre-empt every uninted consequence of complex laws or every precedent-setting interpretation of laws made by higher courts.
- How do you think about the answers? You can sign in to vote the answer.
- Michal SychraLv 72 months ago
I guess that they are caused by the customary law which still grows in extension.
- Lord BaconLv 72 months ago
Life is complicated. Laws cannot address every aspect of life. There will often be a circumstance the law makers did not envisage or that did not exist when the law was made. Sometimes, it is the interaction of laws that creates the 'loophole'. Legally, firms pay tax on their earnings in a territory yet Amazon pays virtually no tax on its UK earnings. This because other laws allow them to transfer charge notional (fictitious) amounts or to send their earnings to tax havens. What is the biggest cost of Big Mac? It is probably the charge for using the Big Mac name (paid to an offshore tax haven), not the meat or the bun or staff costs. It is loophole that the immoral, irresponsible businesses exploit.
- Godless GazooLv 72 months ago
So mostly that comes up in tax code. The point is to inspire some specific behavior. Then when it works people complain about them paying less.