By Kiran Kaur
Legal loopholes can lead the way for some extremely bizarre outcomes – situations which are often unpredictable until they happen! Here is a list of 5 outrageous examples, ranging all the way from the absolute absurd to the downright hilarious.
5. Never make a false promise!
The case of Leonard v Pepsico, Inc [1] is an American contracts law case which highlighted the importance for corporations to be wary of the things promised within their promotional material. In this case, PepsiCo had begun a promotional program in which a jet aircraft, valued at $37.4 million,- could be purchased by consumers for 7,000,000 pepsi points – a loyalty program designed to boost Pepsi sales. However, one man, John Leonard, found a loophole within the contract, in which he was able to purchase Pepsi points for 10c a point. Through this loophole, Leonard delivered a check to Pepsi for $700,000 attempting to purchase the jet. Although the Court would side with PepsiCo, stating no reasonable person could believe that a $37.4 million jet would go for $700,000, this case highlights the airtight ways corporations must create promotional materials.
4. Watch out for typos!
Moving now to Hungary, this case shows the importance of triple checking every single piece of writing for any typos [2]. In 2021, the Hungarian Government passed an anti-LGBTQ+ piece of legislation that aimed at “hiding” Queer literature within public bookshops. The intent of the legislation was that all books with a gay character must be wrapped in foil and sold separately from other books. However due to a missing comma, the law was interpreted as if the books were sold separately from other books, THEN they should be wrapped. This comma saved a Hungarian bookshop - Lira Ltd - from paying a 31,000 euro fine for selling Heartstopper without covering it. The entire meaning of the law was changed by just a single comma!
3. Toys ≠ Dolls
In 2003, Marvel Comics subsidiary Toy Biz utilised the finicky definition of what distinguishes a doll or toy in order to reduce the tariff rate placed upon their action figures [3]. Because tariff duties were higher on dolls than toys, Toy Biz argued that their action figures – which consisted of the X-Men and Fantastic Four – were nonhuman creatures and therefore did not fit the definition fordolls. The tariff rate was halved from 12% to 6.8%, emphasising how definitions can create loopholes for corporations.
2. Legal tax evasion??
The ‘Double Irish with a Dutch Sandwich’ is not a weird combination in some wacky European pub, but rather a way in which corporations and extremely rich individuals are able to avoid taxes [4]. Within this scheme, the profits of a corporation or individual are first sent through one Irish company, and then to a Dutch company, before finally ending up again with a second Irish company with headquarters in a tax haven. This is all possible due to a loophole in Irish laws in which companies can transfer their profits tax-free to offshore shore companies. This loophole highlights the absurd means corporations or individuals will go to to avoid taxes on growing profits.
1. Expensive houses? Not for this man!
Kenneth Robinson found a loophole within the US legal system in order to acquire a $330,000 house for a mere $16 [5]. The law of ‘adverse possession’ – also known as squatter’s rights – is a legal principle in common law under which a person who does not hold legal rights to a piece of property is able to gain ownership based on continuous occupation of the property. There is no need for permission from the owner through this law. Robinson utilised this loophole upon finding an abandoned house in Texas, setting up shop and filing the paperwork stating that he owned the property, all of which cost him $16. What a cool and unique way to beat the housing crisis!
Legal loopholes can be anywhere in our everyday life; you just have to be on the lookout (and perhaps rereading every little legal document) to find them!
Endnotes
Leonard v Pepsico, Inc 22 Ill.210 F.3d 88 (2d Cir. 2000).
news24. (2024, February 9). Hungarian bookstore evades R630 000 fine due to missing comma in LGBTQ law. Retrieved from News24 website: https://www.news24.com/news24/world/news/hungarian-bookstore-evades-r630-000-fine-due-to-missing-comma-in-lgbtq-law-20240209
Yglesias, M. (2011, December 29). How Trade Policy Cost The X-Men Their Humanity. Retrieved April 22, 2024, from Slate Magazine website: https://slate.com/business/2011/12/are-mutants-human.html
Double Irish With a Dutch Sandwich: Definition and How It’s Used. (2024). Retrieved April 22, 2024, from Investopedia website: https://www.investopedia.com/terms/d/double-irish-with-a-dutch-sandwich.asp#:~:text=Key%20Takeaways-,The%20double%20Irish%20with%20a%20Dutch%20sandwich%20is%20a%20tax,headquartered%20in%20a%20tax%20haven.
Sanburn, J. (2024). Man Gets $330,000 Home for $16 | TIME.com. Retrieved April 22, 2024, from TIME.com website: https://business.time.com/2011/07/18/man-gets-330000-home-for-16/
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