Can a lawyer advise a client on the consequences of breaching a contract and prepare documents to carry out the breach?

Plain-English summary

The inquiry arose from a residential mortgage with a due-on-sale clause: the borrower's lawyer had drafted a contract of sale that the parties agreed not to give to the institutional mortgagee, and had advised the client to circumvent the due-on-sale clause, stating he would keep advising clients to do so. The question was whether a lawyer may advise a client of the consequences of breaching a contract and assist the client who, fully informed, elects to breach.

The committee concluded that a lawyer may advise a client of the consequences of breach where full disclosure of the legal ramifications is made, and may prepare documents implementing the client's election if, after competent advice, the client decides he cannot or will not comply. The committee expressly predicated its answer on the assumption that the breach of the due-on-sale clause is not a crime; the answer would differ if it were. Reviewing Rules 7-101 and 7-102, the committee read the terms "unlawful," "illegal," "fraudulent," and "fraud" to relate generally to conduct that is criminal and sanctioned by law, and held that a non-criminal breach of contract does not reach those prohibitions.

The committee drew a clear limit. It would be improper for a lawyer to knowingly aid a client to enter a contract while aware of the client's plan to breach a material provision at the time of execution and then assist in carrying out that scheme; such conduct would amount to fraud at the inception, and a lawyer may not participate in it.

Currency note

This opinion was issued in 1981, under the former Illinois Code of Professional Responsibility and before Illinois adopted the 2010 Rules of Professional Conduct. The ISBA Board of Governors affirmed the opinion in July 2010 as generally consistent with the 2010 Rule (Rule 1.2), while cautioning that the specific standards referenced may differ from the 2010 Rules. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule or requirement mentioned here.

Common questions

Q: Can a lawyer help a client breach a contract?

A: The opinion concluded a lawyer may advise on the consequences of a non-criminal breach and prepare documents to carry out the client's informed decision to breach, so long as the lawyer is not party to a scheme to breach planned at the contract's inception.

Q: Does counseling a contract breach count as assisting illegal or fraudulent conduct?

A: Per the opinion, the prohibitions on assisting illegal or fraudulent conduct in Rules 7-101 and 7-102 relate generally to criminal conduct; a breach of contract that is not a crime does not trigger them.

Q: Where is the ethical line?

A: The committee held it is improper to help a client enter a contract while knowing the client intends to breach a material term from the outset and then assist that scheme, because that amounts to fraud at the inception.

Background and rules framework

The opinion applied Illinois Code of Professional Responsibility Rules 7-101 (seeking the client's lawful objectives) and 7-102 (not counseling or assisting illegal or fraudulent conduct). The Board's 2010 affirmation maps the analysis to current Illinois Rule of Professional Conduct 1.2 (scope of representation; the limit on assisting client crime or fraud in 1.2(d)), corresponding to ABA Model Rule 1.2.

Citations and references

Rules of Professional Conduct:

• Illinois Code Rules 7-101, 7-102 (applied in the opinion)
• Illinois RPC 1.2 (2010 equivalent per the Board's affirmation)
• MR 1.2 (scope of representation; the bar on assisting client crime or fraud)

See also

• ISBA Ethics Op. 20-05: Duties When a Lawyer Learns of Client Fraud
• ISBA Ethics Op. 93-19: Negotiating Strategy and Adverse Post-Trial Suggestions
• ISBA Ethics Op. 849: Preparing Pleadings for a Pro Se Litigant

Source

• Landing page: https://www.isba.org/ethics/opinions/728