The act of drastically exploiting a not-explicitly-forbidden part of a generally well-worded contract; grossly violating the spirit of the law but not the letter. Also, the act of having anal sex and still calling yourself a virgin.
Dick Cheney did some serious loopholing with that whole "it's ok to torture enemy combattants because they're neither soldiers nor civillians" thing.
"I know i'm trying to be celibate, but no one said anything about handjobs...i guess i did a lot of loopholing this weekend."
"I hear Catholic girls do some major loopholing."