25 Common Legal Mistakes Americans Make

Many Americans unknowingly break laws daily, risking fines, lawsuits, or even jail time. From verbal rental agreements to ignoring data privacy laws, these mistakes can have severe repercussions. Below, we detail each mistake, its legal source, and practical steps to stay compliant.

Disclaimer: Consult a licensed attorney for specific advice, as laws vary by jurisdiction.

1. Verbal Rental Agreements

Mistake: Relying on verbal promises from landlords or tenants without a written lease.
Legal Source: Most states enforce verbal agreements under common law contract principles, but they are difficult to prove without written evidence (e.g., Restatement (Second) of Contracts § 110). Statutes of Frauds in many states (e.g., Cal. Civ. Code § 1624) require written leases for terms exceeding one year.
Impact: Lack of proof can lead to disputes over terms, resulting in eviction or lost deposits.
How to Avoid: Always execute a written lease detailing all terms, signed by both parties. Retain copies and document communications.

2. Sharing Streaming Passwords

Mistake: Sharing streaming service passwords with others outside your household.
Legal Source: The Computer Fraud and Abuse Act (CFAA), 18 U.S.C. § 1030, prohibits unauthorized access to protected systems. Tennessee’s 2011 law (Tenn. Code Ann. § 39-14-602) criminalized password sharing for entertainment services, though enforcement varies.
Impact: Potential civil lawsuits from providers or, in extreme cases, criminal charges.
How to Avoid: Use family plans or individual accounts. Avoid sharing credentials with non-household members.

3. Posting Photos Without Consent

Mistake: Sharing identifiable photos online without the subject’s permission.
Legal Source: Right of publicity laws in 15+ states, such as Illinois’ Right of Publicity Act (765 ILCS 1075) and Texas’ Property Code § 26.011, prohibit commercial use of someone’s likeness without consent. Violations can incur damages (e.g., $1,000+ per use).
Impact: Lawsuits for invasion of privacy or misappropriation.
How to Avoid: Obtain written model releases for identifiable photos, especially for commercial use. Blur faces in public shots or confirm public domain status.

4. Ignoring Boilerplate Contracts

Mistake: Signing contracts without reading fine print, such as arbitration or auto-renewal clauses.
Legal Source: The Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq., enforces arbitration clauses, limiting court access. Unconscionable clauses may be voided under state laws (e.g., Cal. Civ. Code § 1670.5), but most boilerplate terms are binding.
Impact: Loss of legal rights, unexpected renewals, or forced arbitration.
How to Avoid: Read all contract terms, especially arbitration, liability, and renewal clauses. Negotiate or consult an attorney before signing.

5. Using Unlicensed Music

Mistake: Using copyrighted music in videos or podcasts without permission.
Legal Source: The Copyright Act of 1976, 17 U.S.C. § 106, grants exclusive rights to music owners. Violations can incur statutory damages up to $150,000 per work (17 U.S.C. § 504).
Impact: Copyright strikes, content removal, or costly lawsuits.
How to Avoid: Use royalty-free music from platforms like Epidemic Sound or obtain licenses from rights holders. Verify fair use exemptions with an attorney.

6. DIY Legal Documents

Mistake: Using online templates for wills or contracts without legal review.
Legal Source: State-specific laws govern document validity (e.g., Cal. Prob. Code § 6110 for wills requires specific formalities). Errors can render documents void, as seen in Estate of Shellenbarger (2008).
Impact: Invalid documents lead to disputes, costly litigation, or unintended outcomes.
How to Avoid: Hire an attorney to draft or review documents, ensuring compliance with state laws. Notarize where required.

7. Ignoring ADA Compliance

Mistake: Failing to make businesses, websites, or rentals accessible to people with disabilities.
Legal Source: The Americans with Disabilities Act (ADA), 42 U.S.C. § 12101 et seq., mandates accessibility for public accommodations. Title III violations can incur fines up to $75,000 for first offenses (28 C.F.R. § 36.504).
Impact: Lawsuits, fines, and reputational damage.
How to Avoid: Audit physical spaces and websites for ADA compliance (e.g., ramps, screen-reader compatibility). Use tools like WAVE and consult accessibility experts.

8. Illegal Dumpster Diving

Mistake: Taking items from private dumpsters without permission.
Legal Source: Trespassing laws in 30+ states (e.g., Cal. Penal Code § 602) prohibit unauthorized entry onto private property, including dumpsters. California v. Greenwood (1988) allows public dumpster searches but not private ones.
Impact: Fines up to $1,000 or criminal charges.
How to Avoid: Seek permission from property owners or use legal recycling programs like Freecycle.

9. Not Reporting Cash Income

Mistake: Failing to report cash payments for services or side hustles.
Legal Source: The Internal Revenue Code, 26 U.S.C. § 61, requires reporting all income. Non-compliance triggers penalties of 20% plus interest (26 U.S.C. § 6662). The IRS monitors transactions over $600 via third-party apps (26 U.S.C. § 6050W).
Impact: Audits, penalties, or jail time for tax evasion.
How to Avoid: Report all income on tax returns, including cash and app-based payments. Use accounting software to track earnings.

10. Public Wi-Fi for Banking

Mistake: Accessing financial accounts on unsecured public Wi-Fi.
Legal Source: While not illegal, this risks violations of data protection laws if personal data is compromised (e.g., Cal. Civ. Code § 1798.81.5 requires businesses to secure data). The CFAA (18 U.S.C. § 1030) may apply if hackers exploit vulnerabilities.
Impact: Financial theft or liability for data breaches.
How to Avoid: Use a virtual private network (VPN) or cellular data for sensitive transactions. Enable two-factor authentication.

11. Skipping Workers’ Compensation

Mistake: Not providing workers’ comp insurance for employees.
Legal Source: Workers’ compensation laws in 48 states (e.g., Cal. Lab. Code § 3700) mandate coverage for businesses with one or more employees. Penalties include fines and personal liability for medical costs.
Impact: Lawsuits, fines, or business closure.
How to Avoid: Purchase workers’ comp insurance through state-approved providers. Verify coverage requirements with your state’s labor department.

12. Illegal Garage Sales

Mistake: Hosting unpermitted garage sales.
Legal Source: Municipal ordinances (e.g., Los Angeles Municipal Code § 12.22) limit sales to 2–3 per year and require permits. Violations can incur fines up to $500.
Impact: Fines or confiscated goods.
How to Avoid: Check city hall for permit requirements and sale limits. Display permits during sales.

13. Illegal Car Modifications

Mistake: Modifying vehicles with unapproved parts like dark tints or loud exhausts.
Legal Source: State vehicle codes (e.g., Cal. Veh. Code § 27156 for exhausts, § 26708 for tints) prohibit modifications failing safety or emissions standards. Fines can reach $5,000, and insurance may be voided.
Impact: Fines, impoundment, or denied coverage.
How to Avoid: Review state vehicle codes and obtain approval from the Department of Motor Vehicles (DMV) for modifications.

14. Recording Without Consent

Mistake: Secretly recording conversations in two-party consent states.
Legal Source: Two-party consent laws in 11 states, including California (Cal. Penal Code § 632) and Florida (Fla. Stat. § 934.03), prohibit recording without all parties’ consent. Violations are felonies with fines or jail time.
Impact: Inadmissible evidence and criminal charges.
How to Avoid: Announce recordings or obtain written consent. Verify state laws before recording.

15. Ignoring ADA Website Compliance

Mistake: Operating websites inaccessible to disabled users.
Legal Source: ADA Title III (42 U.S.C. § 12182) applies to websites as public accommodations, per Robles v. Domino’s Pizza (2019). Non-compliance risks fines up to $75,000 (28 C.F.R. § 36.504).
Impact: Lawsuits and penalties.
How to Avoid: Ensure websites meet WCAG 2.1 AA standards using tools like Siteimprove. Consult accessibility experts.

16. Unpaid Internships

Mistake: Offering unpaid internships that violate labor laws.
Legal Source: The Fair Labor Standards Act (FLSA), 29 U.S.C. § 206, requires minimum wage unless internships meet the “primary beneficiary” test (29 C.F.R. § 785.20). Violations incur back pay (e.g., Glatt v. Fox Searchlight Pictures, 2015).
Impact: Fines or back wages up to $10,000 per intern.
How to Avoid: Pay minimum wage or structure internships to benefit interns primarily. Consult the Department of Labor (DOL).

17. Illegal Home Businesses

Mistake: Operating businesses from home without permits.
Legal Source: Local zoning laws (e.g., Cal. Gov. Code § 65850) restrict commercial activities in residential areas. Violations can incur fines up to $10,000 or eviction.
Impact: Fines, closure, or lease termination.
How to Avoid: Obtain home occupation permits and verify zoning compliance with city planning offices.

18. Forgetting Copyright Attribution

Mistake: Using images or content without proper credit.
Legal Source: The Copyright Act, 17 U.S.C. § 1202, protects attribution rights. Violations under the Digital Millennium Copyright Act (DMCA) can incur damages up to $30,000 per work (17 U.S.C. § 1203).
Impact: Takedown notices or lawsuits.
How to Avoid: Use Creative Commons or public domain media with proper attribution. Verify licenses via Wikimedia Commons.

19. No LLC for Side Hustles

Mistake: Running side hustles without forming an LLC.
Legal Source: State LLC laws (e.g., Cal. Corp. Code § 17701.01) separate personal and business liabilities. Without an LLC, personal assets are at risk in lawsuits (Pierce v. Lyman, 1991).
Impact: Loss of personal assets like homes or savings.
How to Avoid: Form an LLC for $50–$500 through state filing offices. Maintain separate business accounts.

20. Illegal Airbnb Rentals

Mistake: Hosting Airbnb rentals without permits.
Legal Source: Municipal ordinances (e.g., San Francisco Admin. Code § 41A) require short-term rental permits. Violations can incur fines up to $7,500 per violation.
Impact: Fines, eviction, or listing bans.
How to Avoid: Check local zoning laws and obtain required permits. Register with city rental programs.

21. Using Fake Reviews

Mistake: Posting or soliciting fake reviews for products or services.
Legal Source: The Federal Trade Commission Act, 15 U.S.C. § 45, prohibits deceptive practices. FTC guidelines (16 C.F.R. § 255.5) require disclosure of incentivized reviews, with fines up to $50,000 per violation.
Impact: Fines or reputational damage.
How to Avoid: Encourage honest reviews and disclose incentives. Monitor compliance with FTC guidelines.

22. Skipping Permits for Renovations

Mistake: Performing home renovations without permits.
Legal Source: Local building codes (e.g., Cal. Health & Safety Code § 17920) require permits for structural, electrical, or plumbing work. Violations can incur fines up to $20,000 or forced demolition.
Impact: Fines, rework, or reduced property value.
How to Avoid: Obtain permits from local building departments. Consult inspectors for requirements.

23. Ignoring Data Privacy Laws

Mistake: Collecting personal data without proper disclosures.
Legal Source: The California Consumer Privacy Act (CCPA), Cal. Civ. Code § 1798.100, and GDPR (EU) require transparent data practices. Violations can incur fines up to $7,500 per violation or $100,000 for breaches.
Impact: Lawsuits or regulatory penalties.
How to Avoid: Implement privacy policies, cookie banners, and data security measures. Use compliance tools like Termly.

24. Illegal Job Interview Questions

Mistake: Asking about age, religion, or family plans during interviews.
Legal Source: Title VII of the Civil Rights Act, 42 U.S.C. § 2000e, and the Age Discrimination in Employment Act, 29 U.S.C. § 621, prohibit discriminatory questions. EEOC violations can incur damages up to $300,000 (42 U.S.C. § 1981a).
Impact: Discrimination lawsuits or penalties.
How to Avoid: Train HR staff on permissible questions (e.g., skills-based). Use EEOC-compliant interview guides.

25. Not Trademarking Brands

Mistake: Failing to register brand names or logos with the USPTO.
Legal Source: The Lanham Act, 15 U.S.C. § 1051 et seq., grants federal trademark protection. Without registration, common law rights are limited, and rebranding costs can exceed $100,000 (Polaroid Corp. v. Polarad Elecs. Corp., 1961).
Impact: Loss of brand identity or costly rebranding.
How to Avoid: Register trademarks with the USPTO for $250–$350 per class. Conduct trademark searches to avoid conflicts.

Conclusion

These 25 legal mistakes, from verbal leases to unpermitted renovations, highlight how everyday actions can lead to significant consequences. By understanding the cited laws—ranging from the Sherman Act to the ADA—and taking proactive steps like consulting attorneys, obtaining permits, and registering trademarks, you can avoid fines, lawsuits, and stress. Stay informed, comply with local regulations, and protect your personal and business interests in 2025.

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References

1. Restatement (Second) of Contracts § 110 (1981).
2. Cal. Civ. Code § 1624 (2025).
3. Computer Fraud and Abuse Act, 18 U.S.C. § 1030 (2025).
4. Tenn. Code Ann. § 39-14-602 (2025).
5. Illinois Right of Publicity Act, 765 ILCS 1075 (2025).
6. Tex. Prop. Code § 26.011 (2025).
7. Federal Arbitration Act, 9 U.S.C. § 1 et seq. (2025).
8. Cal. Civ. Code § 1670.5 (2025).
9. Copyright Act of 1976, 17 U.S.C. §§ 106, 504 (2025).
10. Cal. Prob. Code § 6110 (2025).
11. Estate of Shellenbarger, 169 Cal. App. 4th 894 (2008).
12. Americans with Disabilities Act, 42 U.S.C. § 12101 et seq. (2025).
13. 28 C.F.R. § 36.504 (2025).
14. Cal. Penal Code § 602 (2025).
15. California v. Greenwood, 486 U.S. 35 (1988).
16. Internal Revenue Code, 26 U.S.C. §§ 61, 6662, 6050W (2025).
17. Cal. Civ. Code § 1798.81.5 (2025).
18. Cal. Lab. Code § 3700 (2025).
19. Los Angeles Municipal Code § 12.22 (2025).
20. Cal. Veh. Code §§ 27156, 26708 (2025).
21. Cal. Penal Code § 632 (2025).
22. Fla. Stat. § 934.03 (2025).
23. Robles v. Domino’s Pizza, 913 F.3d 898 (9th Cir. 2019).
24. Fair Labor Standards Act, 29 U.S.C. § 206 (2025).
25. 29 C.F.R. § 785.20 (2025).
26. Glatt v. Fox Searchlight Pictures, 811 F.3d 528 (2d Cir. 2015).
27. Cal. Gov. Code § 65850 (2025).
28. Copyright Act, 17 U.S.C. §§ 1202, 1203 (2025).
29. Cal. Corp. Code § 17701.01 (2025).
30. Pierce v. Lyman, 1 Cal. App. 4th 1093 (1991).
31. San Francisco Admin. Code § 41A (2025).
32. Federal Trade Commission Act, 15 U.S.C. § 45 (2025).
33. 16 C.F.R. § 255.5 (2025).
34. Cal. Health & Safety Code § 17920 (2025).
35. Cal. Civ. Code § 1798.100 (2025).
36. Title VII of the Civil Rights Act, 42 U.S.C. § 2000e (2025).
37. Age Discrimination in Employment Act, 29 U.S.C. § 621 (2025).
38. 42 U.S.C. § 1981a (2025).
39. Lanham Act, 15 U.S.C. § 1051 et seq. (2025).
40. Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492 (2d Cir. 1961).

Disclaimer: The content on this page is for general information only and should not be considered legal advice. We work hard to provide accurate and up-to-date details, but we can't guarantee the completeness or accuracy of the information. Laws and rules change often, and interpretations may vary. For specific advice, always consult a qualified legal expert. We are not liable for any actions you take based on this information. If you spot any errors or outdated content, please contact us, and we’ll update it as soon as possible.