Final answer:
The legal issue with the 'Breach-of-Compact' theory was the absence of explicit constitutional provisions for state secession or nullification of federal laws, rooted in a states' rights perspective that lacked unanimous support.
Step-by-step explanation:
The legal problem with the South's reliance on the 'Breach-of-Compact' theory lies in the fact that the Constitution does not explicitly address the concept of the union as a compact between states from which states can unilaterally withdraw. This theory was grounded in a states' rights interpretation as per the arguments of John Calhoun, which held that states could nullify federal laws they found objectionable and, by extension, secede from the union if disagreements were not resolved.
However, explicit textual provision for such actions was absent in the Constitution, and the interpretations of social contract theory opened the door to opposing viewpoints, such as those that emphasized the principles of the American Revolution and National Unity expressed by figures like President Andrew Jackson.