Demons like to make deals for souls. But by doing so they impose certain costs on people not directly involved. These are demon externalities.
Here's a quick, but important lesson in contract law. Keep your contracts. Otherwise, there may be some unintended costs for everyone around you. This is especially the case in Demon Law.
What we have here is a simple transaction between a demon, Virilian, and a mother of a preteen participating in Bibb Country, Georgia Annual Miss Buttermilk Pageant. The terms of the pact are simple: Virilian promises victory to the daughter in exchange for the mother's soul. The catch (as demons always have one) is that Virilian actually made the same bargain with every contestant's mother. Obviously since not every girl can win, Virilian plan seems to be to breach contract with n-1 mothers, yet steal their souls anyway. He figures the worst that would happen is that he would incur a small fine.
I'm not expert in the legal system, but it seems that normally when there's a breach of contract, the victim takes the offender to court. It's a matter between two parties (or any other third parties that might have been direct beneficiaries or or payees in the contract). What Virilian did not anticipate, however, was that demon contract bylaws stipulate that any breach results in the opening of a wormhole and mass destruction on Earth. Or as Casey put it, "Magic's having a stroke."
He is a demon, but Virilian certainly did not intend for his thievery to bring out world destruction. Innocent people bearing the costs of one demon's negligence and several mothers' insecurities? That's externalities: demon-style.