It is impossible for a Baskerville to have an 'illegal' contract, as Pandora had popularised. Perhaps Misfortunate Children and being a Baskerville are not always mutually inclusive.

[he's never brought it up with oswald, or lacie; perhaps he should have asked Levi.]

Xerxes had already been taken into Baskerville custody, back home. It's only a matter of time before he is executed for being what he is, either way.