I've Opposed the Flag because this is incorrect use of the Trust Flag system. Only the victim can create type 2 or 3 Flags.
In this case, the Flag is incorrect:
This user violated a written contract with me, resulting in damages.
Anyone else can only create a type 1 Flag.
See:
Just to confirm, you are not allowed to create a contract violation flag unless you were personally harmed, correct?
Correct.
It's kinda important to use the Flag system correctly, so it doesn't lose it's meaning (like what happened to negative feedback).
You can still create a type 1 Flag, or the victim can create a type 3 Flag.