Legal Definitions - in pari delicto doctrine

The in pari delicto doctrine is a legal principle which states that if two parties are equally at fault for an illegal or wrongful act, a court will generally not intervene to help one party recover damages or enforce an agreement against the other. In essence, the law will "leave them where it finds them," meaning neither party can use the legal system to profit from their shared wrongdoing.

Here are some examples illustrating the in pari delicto doctrine:

• Example 1: Illegal Contract for Services

  Imagine a situation where Sarah hires Mark to illegally hack into a competitor's computer system to steal trade secrets. Sarah agrees to pay Mark a substantial sum for this service. After Mark successfully performs the hack, Sarah refuses to pay him the agreed-upon amount. If Mark were to sue Sarah to recover the payment, a court would likely apply the in pari delicto doctrine. Both Sarah and Mark were equally involved in an illegal act, and the court would refuse to enforce their unlawful contract, leaving Mark unable to collect his fee.

• Example 2: Joint Participation in Fraud

  Consider two individuals, Lisa and Tom, who conspire to create a fake charity to solicit donations, intending to keep the money for themselves. They open a joint bank account, collect funds, and then have a dispute over how to divide the stolen money. If Lisa sues Tom, claiming he took more than his share, a court would likely invoke the in pari delicto doctrine. Both Lisa and Tom were equally culpable in the fraudulent scheme, and the court would not assist either party in resolving a dispute that arose directly from their shared illegal activity.

• Example 3: Unlawful Business Operation

  Suppose David and Emily decide to open a business selling counterfeit designer goods. They invest equally, set up a storefront, and begin selling the fake products. After a few months, their business relationship sours, and David accuses Emily of stealing inventory and profits. If David sues Emily to recover his losses, a court would likely apply the in pari delicto doctrine. Both David and Emily knowingly participated in an illegal business venture. Because they are equally at fault for the unlawful operation, the court would not provide a remedy for disputes arising from that shared wrongdoing.