Competent Law vs. Corporate Fraud: An Overview

I. Competent Law: The Foundation of Legitimate Governance

What is Competent Law?

Competent law is law created and enforced by competent authority—legitimate governance structures operating under natural law and common law, with full personal liability for their actions.

Characteristics of Competent Governance:

1. Unregistered and Unincorporated: Not a corporate entity; operates as a society or government of living men and women.

2. Fully Personally Liable: All members, officers, and agents are personally liable for their actions—no corporate veil to hide behind.

3. Lawful Authority: Derives authority from the consent of the governed and operates under natural law (God-given rights) and common law (law of the land).

4. Competent to Contract: Can enter into contracts on equal footing, with full accountability and transparency.

5. Self-Governing: Operates independently, without registration or permission from higher corporate authorities.

Examples:

• Unregistered Unincorporated Societies: Peace Maker Society, First Nations self-governing communities, private law trusts.

• Historical Governments: Original constitutional republics before incorporation (pre-1871 United States, pre-Confederation Canada).

II. Incompetent Corporations Posing as Government

The Corporate Takeover

Most modern "governments" are not legitimate governments—they are corporations registered as such and operating under corporate law (statutes, codes, regulations).

Evidence:

• United States: A corporation under 28 U.S.C. § 3002(15)(A).

• Canada: A corporation registered with the U.S. Securities and Exchange Commission (SEC).

• United Kingdom: The Crown is a corporation sole.

The Fraud: Corporations Posing as Government

These corporate entities pose as governments but operate under commercial law, not public law. They:

• Issue statutes and codes (corporate policy), not laws (common law).

• Require consent (explicit or implied) to have jurisdiction.

• Operate for profit, not for the public good.

• Use limited liability to shield agents from accountability.

Key Legal Doctrine: The Clearfield Doctrine

Clearfield Trust Co. v. United States, 318 U.S. 363 (1943)

The U.S. Supreme Court ruled:

"When the United States enters into commercial or contractual relations, it does not act as a sovereign government but as a private corporation. It is subject to the same rules of law as any other private entity."

Implications:

• When a government acts in a commercial capacity (issuing currency, collecting taxes, enforcing statutes), it is not acting as a sovereign.

• It is acting as a corporation and must follow commercial law.

• It has no special immunity and can be held liable like any other corporation.

Limitation of Powers: Corporations Act

Corporate law (such as the Corporations Act in various jurisdictions) explicitly limits the powers of corporations:

• Corporations can only do what their charter (articles of incorporation) allows.

• Corporations cannot exercise sovereign powers (such as creating law, enforcing justice, or governing people).

• Corporations operate under limited liability—meaning they are not fully accountable for their actions.

III. Limited Liability = Incompetence

What is Limited Liability?

Limited liability is a corporate protection that shields officers, directors, and shareholders from personal responsibility for the corporation's debts, obligations, and wrongful acts.

Why Limited Liability Proves Incompetence:

1. Lack of Accountability: If you are not willing to be fully liable for your actions, you are not competent to govern or contract.

2. Moral Hazard: Limited liability encourages reckless behavior because there are no personal consequences.

3. Fraudulent by Nature: A corporation that claims authority over living people but hides behind limited liability is operating in fraud.

Competent vs. Incompetent:

• Competent Authority: Fully personally liable for all actions—stands behind their word and deeds.

• Incompetent Authority: Hides behind corporate veil, limited liability, and immunity—cannot be held accountable.

Biblical and Natural Law Principle:

• "Let your yes be yes and your no be no" (Matthew 5:37).

• A competent man or woman stands fully liable for their word and actions.

IV. Willful Negligence = Fraud

Legal Principle: Willful Negligence Equals Fraud

Willful negligence (also called gross negligence or reckless disregard) occurs when an individual or entity:

• Knows or should know that their actions (or inactions) will cause harm.

• Proceeds anyway, with conscious disregard for the consequences.

Legal Maxim:

"Fraud vitiates everything it touches." (Nudd v. Burrows, 91 U.S. 426)

Key Point:

• Willful negligence is treated as fraud in law.

• Fraud removes all immunity, including:

  • Sovereign immunity

  • Qualified immunity

  • Corporate immunity

  • Limited liability

Consequences of Willful Negligence/Fraud

When an agent (government official, corporate officer, police officer, judge, etc.) acts with willful negligence, they:

1. Lose All Legal Immunity: No protection under sovereign, qualified, or corporate immunity.

2. Enter Full Personal Commercial Liability: Personally liable for all damages, debts, and obligations arising from their actions.

3. Enter Full Personal Criminal Liability: Can be prosecuted personally for fraud, theft, assault, kidnapping, or other crimes.

Case Law:

• Owen v. City of Independence, 445 U.S. 622 (1980): Qualified immunity does not protect officials who violate clearly established rights.

• Scheuer v. Rhodes, 416 U.S. 232 (1974): Immunity is lost when officials act in bad faith or with malicious intent.

V. Summary: Competent Law vs. Corporate Fraud

Competent Law (Lawful Government/Society)

Incompetent Corporations (Posing as Government)

Unregistered, unincorporated

Registered corporations (U.S.C. § 3002, SEC filings)

Fully personally liable

Limited liability (corporate veil)

Operates under natural law and common law

Operates under statutes, codes, and corporate policy

Derives authority from consent of the governed

Derives authority from corporate charter

Accountable, transparent, competent

Shielded, opaque, incompetent

Can lawfully govern and contract

Operates in fraud when posing as sovereign government

Copy table

VI. Practical Application

How to Challenge Incompetent Corporate "Government"

1. Demand Full Personal Liability: Require all agents (officers, judges, police) to act in their personal capacity, fully liable for their actions.

2. Invoke the Clearfield Doctrine: When a government acts commercially (taxes, fines, licenses), it is a private corporation subject to commercial law.

3. Challenge Jurisdiction: Corporations have no jurisdiction over living men and women operating in the private under natural law.

4. Expose Willful Negligence as Fraud: Document any willful negligence or reckless disregard—this removes all immunity and creates personal liability.

5. Operate in the Private: Use unregistered, unincorporated societies and private law trusts to remain outside corporate jurisdiction.

Sources:

• User Context summary

• Clearfield Trust Co. v. United States, 318 U.S. 363 (1943)

• 28 U.S.C. § 3002(15)(A)

• Owen v. City of Independence, 445 U.S. 622 (1980)

• Scheuer v. Rhodes, 416 U.S. 232 (1974)

• Corporations Act (various jurisdictions)

• Legal maxims and natural law principles

More Angles To Escaping Legal Debt Fraud 

What Makes a Contract Invalid? Key Factors & Legal Pitfalls

Understanding what makes a contract invalid can help you avoid costly legal disputes. Learn about void, voidable, and unenforceable contracts and how to protect your agreements.

Key Takeaways

• A contract must include an offer, acceptance, lawful consideration, and mutual agreement to be valid.

• A void contract is never legally enforceable, while a voidable contract can be challenged but remains valid unless annulled.

• Several factors can invalidate a contract, including fraud, undue influence, coercion, misrepresentation, and lack of capacity.

• Contracts may also become unenforceable if their terms are illegal, ambiguous, or impossible to fulfill.

• Additional conditions such as mistake, duress, and unconscionability can render a contract void or voidable.

• Proper contract execution, including clarity in terms and documentation, is crucial to preventing disputes.

• A contract checklist helps ensure that all legal requirements are met before signing.

• Understanding exceptions that void contracts can help avoid legal disputes and enforceability issues.

• Seeking legal counsel can clarify contract terms and avoid costly litigation.

Knowing what makes a contract invalid will help you avoid common mistakes when drafting an agreement. When presented with one in the future, you will be able to tell right away whether the contract is legal or not, thus sparing yourself from unintentional involvement in any illegal activity.

Essential Components to Include In a Contract

To make a contract valid and enforceable under the law, adhere to the following guidelines:

• Include in the contract the two main elements―an offer and an acceptance.

• Make sure the contract's subject matter is legal.

• Make sure that both parties enter the contract willingly, are over the age of consent, and have the mental capacity to satisfy the terms of the agreement.

• Include a clearly defined consideration, which could take the form of money, interest, a right, or benefit.

• Make sure to execute the contract in the appropriate form, either written or verbal. Note that contracts dealing with significant considerations, real estate, or debts, as well as contracts that cannot be fulfilled for a while, must be in written form.

Common Factors That Invalidate a Contract

Certain circumstances can render a contract invalid, making it unenforceable by law. Here are the most common factors that can invalidate a contract:

1. Lack of Capacity – If one party is a minor, mentally incapacitated, or under the influence at the time of signing, the contract may be invalid.

2. Illegality – Contracts involving illegal activities, such as fraud, bribery, or an agreement that violates public policy, are void.

3. Misrepresentation or Fraud – If one party deliberately provides false information or conceals crucial facts, the contract may be deemed invalid.

4. Duress or Coercion – When a party is forced into an agreement under threats or undue pressure, the contract lacks genuine consent.

5. Unconscionability – A contract may be invalid if it contains grossly unfair terms that heavily favor one party over the other.

6. Mistakes – A significant mutual mistake regarding contract terms, subject matter, or obligations can void an agreement.

7. Failure to Meet Formal Requirements – Certain contracts, such as those for real estate transactions or long-term agreements, must be in writing to be enforceable.

Difference Between “Void” and “Voidable” Contracts

A void contract is not valid and, thus, is not enforceable under the law. None of the parties are bound by its terms. The following circumstances can void a contract:

• The contract's terms are illegal or violate public policy.

• At the time of signing the contract, a party was not of sound mind.

• A party was not of the age of consent.

• It is impossible to satisfy the terms of the contract.

• The contract violates a party's rights.

A voidable contract, on the other hand, is a valid agreement that sometimes could be enforced if both parties agree to proceed with it. The following scenarios can deem a contract voidable:

• A party was forced or threatened to enter the agreement.

• Undue influence was exercised over a party.

• A party had no mental competence to sign the agreement.

• The contract was breached.

• Both parties made mistakes.

• The contract was fraudulent.

• The information and facts were misrepresented.

How Ambiguity Affects Contract Validity

A contract must have clear and specific terms for enforcement. Ambiguous or vague language can lead to disputes and may result in a contract being declared void or unenforceable. Courts may refuse to enforce a contract if:

• Key terms are missing or undefined.

• The contract contains contradictory clauses.

• The obligations of one or both parties are unclear.

To avoid ambiguity, contracts should be carefully drafted with precise language, including well-defined terms, obligations, and dispute resolution mechanisms.

Advice for Executing a Contract Correctly

• Read through the entire document.

• Make sure the terms of the contract are clear and specific.

• Make sure to understand exactly what you are agreeing to and clarify anything that seems vague.

• Put it in written form to protect yourself in case of any disputes in the future.

• Be aware of the acceptance details.

• Confirm the identity of the other party.

The Role of Consideration in Contract Validity

Consideration—the value exchanged between parties—is a fundamental contract requirement. A contract may be invalid if:

• There is no exchange of value (e.g., a one-sided promise with no obligation in return).

• The consideration is illegal or violates public policy.

• It is based on a past event rather than a present or future agreement.

Each party must receive some benefit or incur a legal detriment for the contract to be valid.

Mistakes That Make a Contract Void

• Unilateral mistake.

• Mutual mistake.

• Mistake as to identity.

• Lack of capacity.

• Allocation of risk.

• Defective contracts.

• Failure to understand.

• Mistake relating to documents.

• Noncontractual subject matter.

• Failure to reach an agreement.

• Failure to negotiate.

The Impact of Contractual Mistakes

Mistakes in contract drafting or execution can affect validity. Common mistakes that may render a contract void include:

1. Mutual Mistake – If both parties are mistaken about a fundamental contract term, the agreement may be unenforceable.

2. Unilateral Mistake – If only one party is mistaken, the contract might still be valid unless the error was significant and the other party took advantage of it.

3. Errors in Written Contracts – Typos, miscalculations, or misinterpretations of legal terms can lead to contract disputes.

4. Misunderstanding of Intent – If both parties have different understandings of the contract's purpose, it may be deemed invalid.

Avoiding these mistakes requires clear communication, precise drafting, and legal review before execution.

Mistakes Made When Negotiating Contracts

• Bypassing the planning stage.

• Being a passive participant.

• Relying on a generic template.

• Combining multiple contracts.

• Misunderstanding of services and products.

• Relying on unclear breach of contract terms.

• Omitting conflict resolution procedures.

• Excluding detailed payment terms.

• Accepting the partner's explanation.

• Starting before the execution.

A Checklist for Creating a Successful Contract

1. Offer and acceptance.

2. Intention to create legal relation.

3. Lawful consideration.

4. Capacity of parties.

5. Free consent.

6. Lawful object.

7. Writing and registration.

8. Certainty.

9. Possibility of performance.

10. Not expressly declared void.

Exceptions That Can Void a Contract

• A future modification of the contract.

• The existence of a similar agreement, not contradicting or changing the main contract.

• A condition that had to happen before contract's fulfillment was due.

• The contract formation defects.

• The parties' intentions about unclear terms in the contract.

• The consideration's problems.

• A previous valid agreement that is incorrectly reflected in the contract.

Unenforceable Contracts

The following reasons could make a valid contract impossible to enforce:

• Lack of capacity.

• Duress, or coercion, into a contract.

• Undue influence.

• Misrepresentation during the negotiation process.

• Nondisclosure of important facts.

• Unconscionability (when something about the agreement is shockingly unfair).

• Public policy violation (for example, when an employee is forced to sign a contract that prevents them from joining a union or going on a medical leave, or when a landlord makes a resident sign a contract to forbid companion animals for medical purposes).

• A mistake made by either or both parties.

• Impossibility of fulfillment of the contract's terms.

Situations Where Contracts Become Unenforceable

Even a valid contract may become unenforceable under certain circumstances, including:

1. Statute of Limitations – If too much time passes after a breach, the right to legal enforcement may expire.

2. Breach of Contract – If one party fails to fulfill its obligations, the contract may be voided or altered.

3. Public Policy Conflicts – Contracts that contradict established laws or ethical standards may not be upheld in court.

4. Lack of Good Faith – If a party engages in deceptive practices or acts dishonestly, a court may refuse to enforce the contract.

To prevent these issues, contracts should be regularly reviewed and updated to comply with legal standards.

Frequently Asked Questions (FAQs)

1. What is the difference between a void and a voidable contract? A void contract is never legally enforceable, while a voidable contract is valid unless one party takes legal action to rescind it due to defects like misrepresentation or coercion.

2. Can a verbal agreement be legally binding? Yes, verbal agreements can be legally binding if they meet contract formation requirements. However, some contracts, such as those involving real estate, must be in writing.

3. What happens if a contract is signed under duress? A contract signed under duress (coercion or threats) is voidable. The affected party can seek legal relief to invalidate the agreement.

4. How can I ensure my contract is legally enforceable? Ensure the contract includes clear terms, mutual consent, lawful consideration, and complies with all legal formalities. Consulting an attorney is advisable for complex agreements.

5. What makes a contract illegal? A contract is illegal if it involves criminal activity, violates public policy, or contains terms that are unfairly restrictive or deceptive.

If you need more information about what makes a contract invalid, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

ACADEMICS & GANGSTERS! FULL SONG Click Here!
https://open.spotify.com/track/6vE6CHckTADKZKdMHcaJ1g

25‑Question Test

1. What is competent law as defined in the overview?
a) Any law passed by a registered government
b) Law created and enforced by competent authority under natural and common law, with full personal liability
c) Any statute or regulation published in a legal code
d) Law created only by international organizations

2. Which of the following is a key characteristic of competent governance?
a) Registered as a corporation with limited liability
b) Operates under statutes and codes
c) Unregistered, unincorporated, and personally liable
d) Immune from all lawsuits

3. From where does competent lawful authority derive its legitimacy?
a) Corporate charter
b) International treaties
c) Consent of the governed and natural/common law
d) Stock exchange listings

4. Which of the following is given as an example of a competent law structure?
a) A federal corporation registered with the SEC
b) Peace Maker Society or unregistered unincorporated societies
c) A publicly traded multinational company
d) A political party

5. According to the text, most modern “governments” operate as:
a) Pure common law courts
b) Religious institutions
c) Corporations under corporate law (statutes, codes, regulations)
d) Volunteer associations with no authority

6. Under the Clearfield Doctrine, when the United States enters commercial relations, it acts as:
a) A sovereign immune government
b) A religious authority
c) A private corporation subject to the same rules as any private entity
d) An international tribunal

7. What is limited liability?
a) Unlimited personal responsibility for all actions
b) A protection that shields officers/shareholders from personal responsibility for corporate debts and wrongful acts
c) A type of insurance for natural persons only
d) A criminal penalty

8. Why does the text say limited liability proves incompetence to govern or contract?
a) It is illegal in all jurisdictions
b) It shows unwillingness to be fully liable, encourages reckless behavior, and hides behind a corporate veil
c) It is too expensive to maintain
d) It only applies to small companies

9. In the competent vs incompetent comparison, competent authority is described as:
a) Shielded and opaque
b) Fully personally liable and accountable
c) Protected by sovereign immunity
d) Dependent on registration

10. What is willful negligence (gross negligence) in this context?
a) A minor mistake with no consequences
b) Acting without any knowledge of potential harm
c) Knowing or should‑knowing actions will cause harm and proceeding anyway
d) A purely civil issue with no liability

11. The legal maxim “Fraud vitiates everything it touches” implies what about acts of fraud?
a) They can be excused if done by government
b) They only affect financial contracts
c) They destroy the validity of whatever they are involved in
d) They are minor procedural issues

12. According to the overview, when an agent acts with willful negligence or fraud, what happens to their immunity?
a) It increases
b) It is unaffected
c) All immunity (sovereign, qualified, corporate) is lost
d) Only corporate immunity is lost

13. What is one practical strategy suggested to challenge incompetent corporate “government”?
a) Ignore all notices from government
b) Demand full personal liability from agents acting against you
c) Never respond to any legal documents
d) Only use social media campaigns

14. Operating in unregistered, unincorporated societies and private law trusts is recommended in the text primarily to:
a) Obtain government grants
b) Remain outside corporate jurisdiction and operate under natural law
c) Avoid all responsibilities
d) Increase corporate credit ratings

15. Which of the following is required for a valid contract according to the contract‑validity section?
a) Offer, acceptance, lawful consideration, mutual agreement
b) Notarization, witnesses, and a seal
c) Registration with a government agency
d) A corporate lawyer’s signature

16. A contract involving illegal activities (e.g., fraud, bribery) is generally:
a) Valid but voidable
b) Void and unenforceable
c) Enforceable if both parties agree
d) Enforceable only outside the country

17. Which factor can make a contract voidable rather than automatically void?
a) The subject matter is illegal
b) The contract is impossible to perform
c) A party was forced or threatened (duress)
d) One party was under the age of consent at signing

18. How does lack of capacity affect a contract?
a) It always makes it fully enforceable
b) It can render the contract invalid or voidable if a party is a minor, incapacitated, or under the influence
c) It has no legal effect
d) It only affects oral contracts

19. What is the main problem with ambiguous or vague contract terms?
a) They make the contract more flexible
b) Courts always rewrite them
c) They can lead to disputes and may cause the contract to be void or unenforceable
d) They are preferred in international law

20. Which of the following is an example of misrepresentation or fraud in contract formation?
a) A typo in a name
b) Deliberately providing false information or concealing crucial facts
c) Negotiating a lower price
d) Asking for more time to decide

21. A void contract is best described as:
a) Valid unless challenged
b) Never legally enforceable and binding on no one
c) Always enforceable if in writing
d) Enforceable only if notarized

22. A voidable contract is:
a) Never valid under any circumstances
b) Valid unless and until a party rescinds it due to defects like misrepresentation or coercion
c) Only valid if both parties are minors
d) Automatically criminal

23. Why is consideration essential to contract validity?
a) It shows who is richer
b) It distinguishes a binding contract from a mere gift by requiring an exchange of value
c) It is only needed in real estate deals
d) It replaces the need for offer and acceptance

24. Which of the following can make a contract unenforceable even if it was initially valid?
a) Clear terms and good faith
b) Statute of limitations expiring or conflicts with public policy
c) Having both parties sign
d) Being written in plain language

25. What is one key piece of advice for executing a contract correctly to avoid invalidity?
a) Never read the document to save time
b) Combine multiple unrelated agreements into one
c) Read the entire document, ensure terms are clear, understand what you’re agreeing to, and clarify anything vague
d) Sign first, negotiate later

Answer Key

1. b) Law created and enforced by competent authority under natural and common law, with full personal liability

2. c) Unregistered, unincorporated, and personally liable

3. c) Consent of the governed and natural/common law

4. b) Peace Maker Society or unregistered unincorporated societies

5. c) Corporations under corporate law (statutes, codes, regulations)

6. c) A private corporation subject to the same rules as any private entity

7. b) A protection that shields officers/shareholders from personal responsibility for corporate debts and wrongful acts

8. b) It shows unwillingness to be fully liable, encourages reckless behavior, and hides behind a corporate veil

9. b) Fully personally liable and accountable

10. c) Knowing or should‑knowing actions will cause harm and proceeding anyway

11. c) They destroy the validity of whatever they are involved in

12. c) All immunity (sovereign, qualified, corporate) is lost

13. b) Demand full personal liability from agents acting against you

14. b) Remain outside corporate jurisdiction and operate under natural law

15. a) Offer, acceptance, lawful consideration, mutual agreement

16. b) Void and unenforceable

17. c) A party was forced or threatened (duress)

18. b) It can render the contract invalid or voidable if a party is a minor, incapacitated, or under the influence

19. c) They can lead to disputes and may cause the contract to be void or unenforceable

20. b) Deliberately providing false information or concealing crucial facts

21. b) Never legally enforceable and binding on no one

22. b) Valid unless and until a party rescinds it due to defects like misrepresentation or coercion

23. b) It distinguishes a binding contract from a mere gift by requiring an exchange of value

24. b) Statute of limitations expiring or conflicts with public policy

25. c) Read the entire document, ensure terms are clear, understand what you’re agreeing to, and clarify anything vague