When should an IllegalArgumentException be thrown?

I'm worried that this is a runtime exception so it should probably be used sparingly.
Standard use case:

void setPercentage(int pct) {
    if( pct < 0 || pct > 100) {
         throw new IllegalArgumentException("bad percent");
     }
}

But that seems like it would force the following design:

public void computeScore() throws MyPackageException {
      try {
          setPercentage(userInputPercent);
      }
      catch(IllegalArgumentException exc){
           throw new MyPackageException(exc);
      }
 }

To get it back to being a checked exception.

Okay, but let's go with that. If you give bad input, you get a runtime error. So firstly that's actually a fairly difficult policy to implement uniformly, because you could have to do the very opposite conversion:

public void scanEmail(String emailStr, InputStream mime) {
    try {
        EmailAddress parsedAddress = EmailUtil.parse(emailStr);
    }
    catch(ParseException exc){
        throw new IllegalArgumentException("bad email", exc);
    }
}

And worse - while checking 0 <= pct && pct <= 100 the client code could be expected to do statically, this is not so for more advanced data such as an email address, or worse, something that has to be checked against a database, therefore in general client code cannot pre-validate.

So basically what I'm saying is I don't see a meaningful consistent policy for the use of IllegalArgumentException. It seems it should not be used and we should stick to our own checked exceptions. What is a good use case to throw this?

The API doc for IllegalArgumentException:

Thrown to indicate that a method has been passed an illegal or inappropriate argument.

From looking at how it is used in the JDK libraries, I would say:

• It seems like a defensive measure to complain about obviously bad input before the input can get into the works and cause something to fail halfway through with a nonsensical error message.

• It's used for cases where it would be too annoying to throw a checked exception (although it makes an appearance in the java.lang.reflect code, where concern about ridiculous levels of checked-exception-throwing is not otherwise apparent).

I would use IllegalArgumentException to do last ditch defensive argument checking for common utilities (trying to stay consistent with the JDK usage). Or where the expectation is that a bad argument is a programmer error, similar to an NullPointerException. I wouldn't use it to implement validation in business code. I certainly wouldn't use it for the email example.

When talking about "bad input", you should consider where the input is coming from.

Is the input entered by a user or another external system you don't control, you should expect the input to be invalid, and always validate it. It's perfectly ok to throw a checked exception in this case. Your application should 'recover' from this exception by providing an error message to the user.

If the input originates from your own system, e.g. your database, or some other parts of your application, you should be able to rely on it to be valid (it should have been validated before it got there). In this case it's perfectly ok to throw an unchecked exception like an IllegalArgumentException, which should not be caught (in general you should never catch unchecked exceptions). It is a programmer's error that the invalid value got there in the first place ;) You need to fix it.

Throwing runtime exceptions "sparingly" isn't really a good policy -- Effective Java recommends that you use checked exceptions when the caller can reasonably be expected to recover. (Programmer error is a specific example: if a particular case indicates programmer error, then you should throw an unchecked exception; you want the programmer to have a stack trace of where the logic problem occurred, not to try to handle it yourself.)

If there's no hope of recovery, then feel free to use unchecked exceptions; there's no point in catching them, so that's perfectly fine.

It's not 100% clear from your example which case this example is in your code, though.

As specified in oracle official tutorial , it states that:

If a client can reasonably be expected to recover from an exception, make it a checked exception. If a client cannot do anything to recover from the exception, make it an unchecked exception.

If I have an Application interacting with database using JDBC , And I have a method that takes the argument as the int item and double price. The price for corresponding item is read from database table. I simply multiply the total number of item purchased with the price value and return the result. Although I am always sure at my end(Application end) that price field value in the table could never be negative .But what if the price value comes out negative? It shows that there is a serious issue with the database side. Perhaps wrong price entry by the operator. This is the kind of issue that the other part of application calling that method can't anticipate and can't recover from it. It is a BUG in your database. So , and IllegalArguementException() should be thrown in this case which would state that the price can't be negative.
I hope that I have expressed my point clearly..