I Overview

As is true in many jurisdictions in the United States, Illinois contract law is largely composed of two sources of law: common law – that is, judge-made precedent – and statutes concerning certain types of contracts, such as the Illinois Uniform Commercial Code, which governs the sale of goods. Although not as specialised as courts in Delaware or New York, Illinois courts consider a large number of commercial cases each year and have produced a significant body of relevant case law. In general, Illinois courts have recognised a long tradition of upholding the right of parties to enter freely into contracts, especially when a case involves sophisticated parties on both sides of the transaction. But they also recognise a number of common law doctrines designed to protect parties of unequal bargaining power, and readily enforce statutes governing particular types of contracts that modify or supplement background common law principles. The following chapter presents an overview of key concepts under Illinois contract law, starting with the basics of contract formation.2

II CONTRACT FORMATION

i Basic elements: offer, acceptance, and consideration

Illinois courts define a contract as 'an agreement between competent parties, upon a consideration sufficient in law, to do or not to do a particular thing'.3 To be a valid contract, there must be an 'offer, acceptance, and consideration; to be enforceable, the agreement must also be sufficiently definite so that its terms are reasonably certain and able to be determined'.4 The party seeking to enforce a contract has the burden of proving that the contract was legally formed.5

An offer must contain sufficiently detailed material terms so that 'the promises and performances to be rendered by each party are reasonably certain'.6 An acceptance occurs when the offeree communicates a 'meeting of the minds' or 'mutual assent'.7 Illinois courts follow the common law rule that 'it is not necessary that the parties share the same subjective understanding as to the terms of the contract'.8 A valid contract requires only an objective manifestation of mutual assent.9

The acceptance 'must comply strictly with' the terms of the offer; if not, it will be construed as a rejection and counteroffer.10 An acceptance is invalid if the parties have 'fail[ed] to agree upon an essential term of a contract,' because 'the mutual assent required to make a contract is lacking'.11 The test for determining whether a term is 'essential' or 'material' is whether 'under proper rules of construction and principles of equity', the court can 'ascertain what the parties have agreed to do' and find a 'basis for deciding whether the agreement has been [breached]'.12 The price and nature of an item to be delivered are common examples of essential terms.13

Illinois defines consideration as the 'bargained-for exchange of promises or performances … [which] may consist of a promise, an act or a forbearance'.14 Illinois courts generally will not inquire into the adequacy of the consideration, which is 'within the exclusive dominion of the parties where they contract freely and without fraud'15 unless the sufficiency is 'so grossly inadequate as to shock the conscience'16or the promise of one party is illusory—that is, when 'closer examination reveals that the promisor has not promised to do anything'.17 In Illinois, as in most jurisdictions, there is no valid contract if 'the alleged consideration for a promise has been conferred prior to the promise upon which [the] alleged agreement is based'.18 In other words, past consideration is no consideration at all.

ii Modifications

Illinois law generally supports the modification of contracts. 'Ordinarily, parties are as free to change a contract after making it as they were to make it in the first place' as long as the modification does not 'violate the law or public policy'.19 A modification is defined as 'a change in one or more aspects of [the contract] that introduces new elements into the details or cancels some [provisions] but leaves the general purpose and effect of the contract intact'.20 A modification is its own contract, and there must be a valid offer, acceptance, and consideration for it to be valid.21 In Illinois, 'the terms of a written contract can be modified by a subsequent oral agreement even though . . . the contract precludes oral modifications',22 but only if the parties agree that they actually intended to modify the contract.23

iii Oral contracts and implied-in-fact contracts

In general, oral contracts are 'binding so long as there is an offer, an acceptance, and a meeting of the minds as to the terms of the agreement'.24 Similarly, courts can find that a contract is implied in fact if all of the elements of an express contract can be inferred from the facts and conduct of the parties, rather than from an oral or written agreement.25 However, Illinois has adopted the traditional statute of frauds, which requires a formal, written contract for specific subjects.26 Although Illinois is one of three states that have not adopted the Uniform Electronic Transactions Act, it has provided by statute that '[i]nformation, records, and signatures shall not be denied legal effect, validity, or enforceability solely on the grounds that they are in electronic form'.27 It is important to note, however, that these electronic signatures are not valid for negotiable instruments.28

iv Third-party beneficiaries

Illinois courts recognise third-party beneficiaries to a contract, but only under certain circumstances. In general, 'Illinois follows the 'intent to benefit' rule; that is, [determining] third-party beneficiary status is a matter of divining whether the contracting parties intended to confer a benefit upon a nonparty to their agreement'.29 Under this approach, 'there is a strong presumption that parties to a contract intend that the contract's provisions apply to only them and not to third parties. In order to overcome that presumption, the implication that the contract applies to third parties must be so strong as to be practically an express declaration'.30 To determine whether this presumption has been overcome, courts consider the contract's language and surrounding circumstances at the time of the agreement's execution; circumstances after the execution of the contract are generally irrelevant.31 In addition, many Illinois courts have said that there must be 'an express provision in the contract identifying the third-party beneficiary by name or by description of a class to which the third party belongs'.32 If a recognised third-party beneficiary is intended to benefit directly from the performance of the contract, then the beneficiary may sue to enforce the agreement.33

v Alternative frameworks for relief

Illinois, like many jurisdictions, recognises a number of situations where a party can seek relief even if there is no express or implied-in-fact contract. The four most common claims under these circumstances are unjust enrichment (also known as an 'implied-in-law contract' or 'quasi-contract' claim),34 quantum meruit,35 promissory estoppel,36 and equitable estoppel.37

Unjust enrichment and quantum meruit claims are similar, but have different measures of damages. Under both theories, 'the plaintiff must show that valuable services or materials were furnished by the plaintiff [and] received by the defendant, under circumstances which would make it unjust for the defendant to retain the benefit without paying'.38 But in a 'quantum meruit action, the measure of recovery is the reasonable value of work and material provided, whereas in an unjust enrichment action, the inquiry focuses on the benefit received and retained' by the defendant.39

Promissory estoppel and equitable estoppel are also similar. Under both theories, one party 'reasonably induces [the other] to rely on his representations, and leads [the other], as a result of that reliance, to change his position to his injury.'40 The key distinction is that 'promissory estoppel requires proof of an unambiguous promise, [while] equitable estoppel does not.'41

All of these claims may be pleaded in the alternative to claims that the defendant breached an express or implied-in-fact contract.42 But plaintiffs must take great care in how they structure their pleadings. Some Illinois courts have dismissed claims for alternative forms of relief because the complaint incorporated by reference allegations that there was an express or implied-in-fact contract. In one case, for example, the plaintiff incorporated by reference the allegations it used to support a claim for breach of an express oral contract into its claim for unjust enrichment.43 The court held that it was appropriate to dismiss the unjust enrichment claim under these circumstances because unjust enrichment is available only where there is no express contract (either written or oral).44 Practitioners in Illinois therefore should think carefully about whether and to what extent a claim should incorporate by reference allegations set forth earlier in the pleading.

III CONTRACT INTERPRETATION

The 'principal objective' of contract interpretation in Illinois is 'to determine and give effect to the intention of the parties at the time they entered into the agreement'.45 When the parties dispute the meaning of a contractual provision, 'the threshold issue is whether the contract is ambiguous'.46 If a contract is not ambiguous,47 the court will give its terms their 'plain, ordinary and popular meaning',48 and extrinsic evidence about the meaning of the agreement is inadmissible. In this situation, the court will 'follow the 'four corners' rule', which holds that 'an agreement, when reduced to writing, . . . speaks for itself, and the intention with which it was executed must be determined from the language used. It is not to be changed by extrinsic evidence'.49

On the other hand, if the contract's language is 'susceptible to more than one meaning,'50 or 'is obscure in meaning through indefiniteness of expression,' then the contract is ambiguous.51 But '[a]n ambiguity is not created simply because the parties disagree about the interpretation.'52 The question of ambiguity is a legal one for the court to decide.53 If a court determines that the contract is ambiguous, then it may use traditional 'rules of construction'54 and 'consider extrinsic evidence to determine the parties' intent'.55 In efforts to resolve ambiguities, Illinois courts have considered the conduct of the parties,56 prior and contemporaneous transactions,57 the relationship of the parties, the facts and circumstances that existed when the parties entered the contract,58 established custom of the parties, and trade usage.59 If, after considering extrinsic evidence, 'doubt still remains as to the meaning of the contract, then the question of interpretation must be left to the trier of fact'.60

Where there is a conflict between two provisions, they 'will be reconciled if possible so as to give effect to [both]';61 otherwise 'the more specific provision relating to the same subject matter controls over the more general provision'.62 Additionally, 'contract provisions and terms are to be interpreted as a whole and not in isolation,'63 so 'as to give effect to all of the contract's provisions'64 and not 'nullify or render provisions meaningless'.65 This is because 'it is presumed that all provisions were intended for a purpose'.66

IV DISPUTE RESOLUTION

i Contractual provisions regarding forum selection

A forum selection clause is prima facie valid under Illinois law,67 and it will be enforced 'unless the opposing party demonstrates that enforcement 'will be so gravely difficult and inconvenient that [the opposing party] will for all practical purposes be deprived of [its] day in court'.68 Courts will assess the validity of a forum-selection clause by evaluating six factors: '(1) the law governing the formation and construction of the contract; (2) residency of the parties; (3) location of execution and performance of the contract; (4) location of the parties and witnesses; (5) the inconvenience to the parties of any particular location; and (6) whether the parties bargained for the clause'.69 The sixth factor is weighed heavily, because courts are 'particularly reluctant to void a forum-selection clause on inconvenience grounds where both parties freely entered the agreement contemplating such inconvenience'.70 If the contract was reached through 'arm's-length negotiation between experienced and sophisticated businesspeople',71 courts will enforce the clause 'absent some compelling and countervailing reason' to the contrary.72

One exception to Illinois courts' general practice of enforcing forum-selection clauses is a construction contract that is performed in Illinois. As a matter of public policy, the Illinois Construction Act invalidates any forum-selection or choice-of-law provision in such a contract if it requires dispute resolution to take place in another state.73

Subject to that exception, it is otherwise difficult to invalidate a forum-selection clause under Illinois law. A plaintiff cannot avoid the selected forum by pleading 'alternative non-contractual theories of liability' if the claims arise out of the parties' contractual relationship.74 Additionally, a mere allegation of fraud is insufficient 'to invalidate [a forum-selection clause]'; the fraud alleged 'must be specific to the forum-selection clause itself'.75

ii Contractual agreements to waive defences or to resolve disputes through alternative dispute resolution

In addition to forum-selection clauses, Illinois courts will enforce contractual provisions that waive defences in litigation,76 as well as agreements that require alternative dispute resolution, like arbitration.77 In particular, Illinois law provides that a written agreement to submit a dispute to arbitration 'is valid, enforceable and irrevocable save upon such grounds as exist for the revocation of any contract'.78 Whether the parties in fact agreed to arbitrate their dispute is determined by ordinary principles of contract law.79 Illinois courts recognise there is a strong policy (at both the state and federal level) favouring arbitration,80 and they generally enforce arbitration clauses.81 In fact, in Cook County, where Chicago is located, even without a contract term, the local court rules require arbitration for certain commercial claims seeking less than US$75,000 in damages.82

v BREACH OF CONTRACT CLAIMS

To prove a breach of contract claim in Illinois, a party must show that a valid and enforceable contract exists, that the contract was breached by the defendant, that the non-breaching party performed its obligations, and that the breach caused an injury to the non-breaching party.83

In general, a party seeking to recover for a breach of contract must show that it substantially performed its obligations under the contract or had a sufficient excuse for failure to perform. 'What constitutes substantial performance is difficult to define, and whether substantial performance occurred will depend upon the relevant facts of each case'.84 Illinois courts look to factors such as: whether there has been a 'receipt and enjoyment' of contractual benefits by one party,85 or whether one party has 'honest[ly] and faithful[ly]' upheld the material portions of an agreement with 'no willful departure' from those essential provisions.86

Parties to a contract are held to an implied covenant of good faith and fair dealing.87 Under this duty, parties executing an agreement must use reasonable discretion and act with proper motive.88 Discretion cannot be employed arbitrarily, capriciously, or in a manner inconsistent with the reasonable expectations of the parties.89 The obligation of good faith and fair dealing is applied across the board in all Illinois contract cases, regardless of whether or not it is specified in the disputed agreement.90

Under Illinois law, anticipatory repudiation occurs when a party clearly indicates an intent not to fulfil its contractual obligations on the date of the agreed-upon performance.91 Illinois courts strongly emphasise that the repudiating party must be 'definite and unequivocal' in manifesting non-performance of the agreement.92 Ambiguous statements do not suffice.93 As a response to the anticipatory breach, the non-repudiating party may stop performance of the contract or may continue to perform and subsequently sue for damages.94

VI Defences to enforcement

A party may defend against a breach of contract claim in Illinois on several grounds.

i Statute of limitations period expired

The statute of limitations period for a breach of contract claim in Illinois depends on the type of contract at issue. For a written contract (not involving the sale of goods), the limitations period is ten years.95 For an oral contract (not involving the sale of goods), the limitations period is five years.96 For a contract involving the sale of goods, the limitations period is four years, but the parties may agree to shorten the limitations period to not less than one year (they cannot extend it).97 A breach of contract claim begins accruing at the time of the breach, not when a party sustains damages.98 However, where one promises to render performance 'on demand' or at a specified time after demand, the statute of limitations does not begin to run until the demand is made.99

ii Lack of consideration

As explained above, an enforceable contract requires consideration.100 In Illinois, sufficient consideration is '[a]ny act or promise which is of benefit to one party or disadvantage to the other'.101 Illinois courts generally will not inquire into the adequacy of consideration, only its existence.102 One exception to this rule is a non-compete agreement in the employment context. This exception is based on a recognition that 'a promise of continued employment may be an illusory benefit where the employment is at will'.103 Illinois courts have generally held that two years or more of continued employment constitutes adequate consideration, but they nevertheless evaluate the adequacy of consideration on a case-by-case basis.104

iii Enforcement is contrary to public policy

A contract contrary to public policy can be voided.105 Illinois courts, however, have a 'long tradition' of protecting the interests of parties who 'freely contract' with one another,106 and thus rarely void contracts on public policy grounds.107 The burden rests on the party alleging the breach to show that the agreement is 'clearly contrary to what the constitution, the statutes, or the decisions of the courts have declared to be the public policy'.108 Alternatively, the non-breaching party may prove that the agreement is 'manifestly injurious to the public welfare'.109 Illinois courts have applied § 178 of the Restatement (Second) of Contracts when evaluating whether a contract contravenes public policy.110 Under the Restatement approach, a contract term may be unenforceable due to legislation that renders it unenforceable or due to it being 'clearly outweighed in the circumstances by a public policy'.111

iv Duress and undue influence

Illinois courts will not enforce agreements entered into by an individual under duress.112 Economic duress or 'business compulsion' occurs when one party compels another party to enter into a contract by using wrongful acts or threats.113 An act is wrongful when it is contrary to moral sensibilities or when it is 'criminal, tortious, or in violation of a contract duty'.114 Economic duress goes beyond 'mere hard bargaining or the pressure of financial circumstances'.115

Illinois courts also will not enforce agreements entered into by parties subject to 'undue influence'. Undue influence is a form of duress where one party presents 'an improper urgency of persuasion' to the extent that the other party is 'induced to do or forbear an act' that she otherwise would or would not do.116 The standard for undue influence is fact-dependent, and Illinois courts do not have a fixed threshold for determining whether a party was unduly influenced.117

v Impossibility or impracticality118

In general, Illinois courts will seek to uphold agreements 'where parties, by their own contract and positive undertaking, create a duty or charge upon themselves'.119 '[C]ontingencies, not provided against in the contract, which render performance impossible, do not bring the contract to an end'.120 However, the parties' contractual duties may be suspended when a condition, thing, or person necessary for the execution of the contract no longer exists.121 To invoke an impossibility defence, a party must have tried all practical alternatives and the cause of the impossibility cannot have been anticipated.122 The party also cannot have created the circumstances that gave rise to the impossibility.123 The contract must be objectively impossible to perform; subjective, 'personal inability' to perform does not absolve a party of its contractual obligations.124 Although Illinois courts recognise impossibility and impracticability as defences to the enforcement of a contract, there are few published cases in which the defences were successful.

vi Frustration of purpose

Frustration of purpose – or 'commercial frustration' – occurs when a change in circumstances undermines the reasons behind performing a contract.125 To prove frustration of purpose, a party must show that reasonably unforeseen circumstances made it impossible for the party to uphold the agreement or that the unforeseen circumstances destroyed the party's expected contractual benefits.126 The parties must have entered into the contract knowing that performance of the contract was predicated on the existence of the circumstances that later changed.127 The party alleging frustration of purpose must also show that the unforeseen circumstance 'totally or nearly totally destroyed [the value of counter-performance]'.128

vii Lack of capacity

To enter into a contract, parties must be competent. Parties are competent at the age of majority,129 which is 18 years in Illinois.130 However, a party experiencing 'insane delusions or other mental illness' is not competent when the party's condition impairs its ability to understand the nature of the agreement.131 For agreements regarding necessities, the parties need not meet the capacity requirement.132

viii A material breach by contracting party

A party may decline to perform its obligations under a contract if the other party has materially breached the contract by failing to perform its duties under the agreement.133 The breach must be 'so material and important' that it justifies ending the contract.134 Materiality is determined by whether a breach is 'so substantial and fundamental as to defeat the objects of the parties in making the agreement, or whether the failure to perform renders performance of the rest of the contract different in substance from the original agreement'.135

VII FRAUD, MISREPRESENTATION, AND OTHER CLAIMS

A party in Illinois also may challenge the validity of an agreement on the ground that the agreement was the product of fraud or a mistake of fact. In addition, commercial disputes often involve tort-based claims that touch on contractual arrangements between the parties, such as a claim for tortious interference with a contract. If raised successfully, these claims can result in the reformation or rescission of an agreement and, in other cases, damages.

i Fraudulent misrepresentation, concealment, and inducement

Under Illinois law, a party can defend against the enforcement of a contract by raising a claim of fraudulent misrepresentation, inducement, or concealment. 'Fraud can encompass an intentional misrepresentation or an intentional concealment'.136 The party alleging fraud must show that the other party made a false statement of material fact and intended to induce the party into action.137 'A misrepresentation is 'material' if the party seeking rescission would have acted differently had [it] been aware of the fact or if it concerned the type of information upon which [it] would be expected to rely when making [its] decision to act'.138 The party who allegedly expressed the fact must have either known of its falsity or not believed in its truth,139 and the induced party must have justifiably relied on the misrepresentation.140 Illinois courts also recognise fraudulent concealment when a party does not speak about or disclose a fact while under the obligation to do so141 due to a special or fiduciary relationship.142

When a contract is induced by fraud (often referred to as 'fraud in the inducement'), the contract is voidable, and the non-breaching party has the option to 'rescind the contract' or 'waive the defect, ratify the contract, and enforce it'.143 When there is a fraudulent misrepresentation about the contents or effect of the contract (provided the non-breaching party justifiably relied on the misrepresentation), then the non-breaching party may seek to reform the contract to express what it understood the agreement to be144 rather than completely rescind the agreement.

ii Mistake of fact

A mistake of fact can, under certain circumstances, serve as a defence to the enforcement of a contract. Illinois follows the Restatement (Second) of Contracts in defining a 'mistake' as 'a[n] erroneous belief as to the contents of a writing that expresses the agreement'.145 A mistake of fact can be either mutual or unilateral. A mutual mistake occurs when a party can show that the mistake relates to a 'material matter' of the agreement.146 The mistake must be of 'such grave consequence that enforcement of the contract would be unconscionable'.147 The parties also must have exercised reasonable care in forming the agreement.148 For contracts formed under mutual mistake of fact, the parties may seek equitable relief. Courts commonly employ the remedies of rescission149 or reformation150 for mutual mistakes of fact. To reform the contract, the party must show that a mutually understood agreement or 'meeting of the minds' existed, but 'when the agreement was reduced to writing, some agreed-upon provision was omitted or one not agreed upon was inserted'.151 A contract entered into by mutual mistake cannot be voidable, however, where the affected party bears the risk of the mistake.152

A unilateral mistake is one based on the fault of one party to the contract. In order for the agreement to be voidable on the basis of unilateral mistake, the mistake must be material and either 'the other party [must have] had reason to know of the [innocent party's] mistake', '[the other party's] fault caused the mistake,' or the result must be unconscionable.153 A unilateral mistake may result in the rescission of a contract only if the party who made the mistake exercised reasonable care.154 In addition, Illinois courts allow rescission only when it can be executed 'without doing injustice to the other party'.155 For both mutual and unilateral mistakes, Illinois courts will void a contract only if the parties can be placed 'in status quo ante' or in '[their] precontract position'.156

iii Tortious interference with a contract

Tortious interference with a contract occurs when a party can show that another party was aware of a valid and enforceable contract between both parties, and the other party intentionally and unjustifiably induced a breach of that contract by the third party, resulting in damages.157 The inducing party must have done more than 'merely provid[e] information in a passive way'.158 Inducement 'requires some active persuasion, encouragement, or inciting' of the third party by the inducing party.159 Simply communicating with the third party is not enough; the plaintiff must show the defendant 'actively solicited' the third party's business and caused the breach.160

iv Tortious interference with a prospective economic advantage

Tortious interference with a prospective economic advantage is similar to tortious interference with a contract but occurs when there is no contract between the plaintiff and another party. To prevail, the plaintiff must prove it had a 'reasonable expectation of entering into a valid business relationship' with the third party, the defendant's knowledge of that expectancy, 'purposeful interference by the defendant that prevents the plaintiff's legitimate expectancy from ripening into a valid business relationship', and damages resulting from the interference.161

VIII REMEDIES

Parties can pursue a variety of remedies for breach of contract, depending on the circumstances. To recover monetary damages, a plaintiff alleging a breach of contract has the burden of proving that the breach caused damages,162 and must prove damages to a reasonable degree of certainty.163 A prevailing plaintiff is entitled to post-judgment interest,164 and under certain circumstances pre-judgment interest also may be available.165 If a legal, monetary remedy will be inadequate, Illinois courts can grant equitable remedies – such as specific performance.166 This section addresses the measurement of damages,167 contractual limits on remedies and liability, and certain forms of equitable relief.

i Damages: expectation, consequential, reliance, and punitive

Courts most typically award expectation damages, which aim to 'put the nonbreaching party into the position he or she would have been in had the contract been performed, but not in a better position'.168 Lost profits may be awarded as compensation if (1) 'the court is satisfied that the wrongful acts of [the] defendant caused the loss';169 (2) 'the profits were reasonably within the contemplation of the defaulting party at the time [the] contract was entered into';170 and (3) the lost profits can be 'determined with reasonable certainty'.171

Consequential damages also may be available. These damages comprise 'economic harm beyond the contract's immediate scope';172 but often they are too speculative to recover.173 Notably, 'lost profits can be categorised as either direct – compensatory – or indirect – consequential – depending on the situation.'174 Thus, if a contract disclaims liability for consequential damages, lost profits may not be recovered unless they are part of 'the benefit of the bargain that the party lost from the contract itself.'175 For example, in Westlake Financial Group v. CDH-Delnor Health Systems, the plaintiff sought lost profits for the final two years of a five-year contract that the defendant breached by terminating the agreement after three years.176 Although the contract prohibited the recovery of consequential damages, the court held that plaintiff could pursue its lost profits, even though they were not guaranteed, because the years of performance provided a 'concrete basis' that could be used to calculate the plaintiff's expectancy.177

If expectation damages are difficult to determine, the plaintiff may obtain 'damages based on his reliance interest'.178 In contrast to expectation damages, which give the plaintiff the benefit of its bargain, the goal of reliance damages is to 'put the injured party in as good a position as [it] would have been in had the contract not been made'.179 These damages may include 'expenditures made in preparation for performance or in performance, less any loss that the party in breach can prove with reasonable certainty the injured party would have suffered had the contract been performed'.180

Punitive damages will 'not be awarded for a breach of contract, even if the breach was willful.'181 They are available to a plaintiff only if 'the breach amounts to an independent tort and there are proper allegations of malice, wantonness or oppression'.182

ii Contractual provisions concerning remedies

Illinois courts generally enforce contractual limits on remedies.183 For example, a remedy provision 'will be deemed exclusive if the contract warrants this interpretation, even if the word 'exclusive' does not expressly appear within the contract'.184 Courts also uphold and enforce indemnity provisions,185 but they will be 'strictly construed'.186 Attorneys' fees, for example, 'are only recoverable pursuant to an indemnity contract if such terms are specifically provided for within the contract'.187 Exculpatory clauses are disfavoured.188 In order to balance the two conflicting policy interests – that 'a person should be liable for negligent breach of a duty that he owes another;' and 'a person should have the right to freely contract about his affairs'189 – exculpatory agreements will also be 'strictly construed against a benefitting party'.190

Parties are free to include liquidated damages provisions in their agreements, which Illinois courts will evaluate on a case-by-case basis.191 Courts enforce liquidated-damages provisions 'as long as (1) the parties intended to agree in advance to the settlement of damages that might arise from a breach, (2) the amount provided as liquidated damages was reasonable at the time of contracting and bore some relation to the damages which might be sustained, and (3) the actual damages would be uncertain in amount and difficult to prove'.192

iii Equitable remedies: specific performance, rescission, and reformation

Under certain circumstances, courts will award an equitable remedy in lieu of money damages. Specific performance is the quintessential example. It will be awarded 'where the damage remedy at law is inadequate'.193 Although specific performance 'is not granted as an absolute right',194 but as 'a matter of sound judicial discretion controlled by established principles of equity and exercised upon a consideration of all the facts and circumstances of a particular case',195 it generally will be granted for the breach of a valid contract for the sale of real property, 'absent circumstances of oppression and fraud'.196

As explained above, where fraud contaminates a contract, 'rescission may be an appropriate remedy'.197 The fraud may consist of a misrepresentation made in order to induce the other party to act or the intentional concealment of a material fact, which, had the other party been aware of it, would have caused that party to act differently.198 The party seeking rescission must be able to 'restore the other party to the status quo ante existing at the time the contract was made'.199 The remedy of rescission 'presumes that a valid contract exists; it does not negate that a contract ever existed'.200

Similarly, to obtain a judicial reformation of a contract, the plaintiff must assert '(1) the existence and substance of an agreement between the parties and the identity of the parties to the agreement; (2) the parties' agreement to reduce their agreement to writing; (3) the substance of the written agreement; (4) that a variance exists between the parties' original agreement and the writing; and (5) mutual mistake or some other basis[,] [like fraud] for reformation'.201 A plaintiff must prove the fourth and fifth elements by 'clear and convincing evidence' before a court will consider reforming a contract.202

ix CONCLUSIONs

As illustrated above, there is a large body of commercial law in Illinois, which is a combination of common and statutory law. Although Illinois courts are not as specialised as courts in Delaware or New York, they decide a large number of commercial cases each year and offer a reasonably predictable forum for resolving contractual disputes. In general, they are influenced heavily by the common law tradition and rely on many years of judicial precedent from the Supreme Court of Illinois and the Illinois Appellate Court to resolve disputes.203 This precedent generally recognises parties' rights to freely enter into contracts, and Illinois courts generally enforce the terms of those contracts as written, especially when the parties are sophisticated. But, as is true in many jurisdictions in the United States, Illinois courts recognise a number of common law doctrines designed to protect parties with unequal bargaining power, and enforce statutes enacted by the Illinois legislature that do the same.


Footnotes

1 Paul E Veith and Charles K Schafer are partners at Sidley Austin LLP. Assistance in completing this chapter was provided by Sidley associates Neil H Conrad, Kelsey Annu-Essuman, and Jessica R Bernhardt.

2 The focus of this chapter is on Illinois common law unless otherwise specified. Illinois' codification of the Uniform Commercial Code, which governs the sale of goods, can be found at 810 ILCS 5/1 et seq. (West 2019).

3 Mikenas v. Village of Westmont, 2018 IL App (2d) 170539-U, 21 (quoting People v. Dummer, 113 N.E. 934, 935 (Ill. 1916)); see also Steinberg v. Chicago Med. Sch., 371 N.E.2d 634, 639 (Ill. 1977) (same).

4 DiLorenzo v. Valve & Primer Corp., 807 N.E.2d 673, 678 (Ill. App. Ct. 2004) (quoting Halloran v. Dickerson, 679 N.E.2d 774 (Ill. App. Ct. 1997)).

5 C. Iber & Sons, Inc. v. Grimmett, 248 N.E.2d 131, 133 (Ill. App. Ct. 1969) (same); Reese v. Forsythe Mergers Grp., Inc., 682 N.E.2d 208, 213 (Ill. App. Ct. 1997) (same); Strategies for Dynamic Growth, LLC v. Menwitt Corp., 2015 IL App (1st) 131132-U, 16 (same).

6 Rose v. Mavrakis, 799 N.E.2d 469, 473 (Ill. App. Ct. 2003) (quoting Academy Chicago Publishers v. Cheever, 578 N.E.2d 981 (Ill. 1991)).

7 Illinois courts use the terms 'meeting of the minds' and 'mutual assent' interchangeably; subjective understanding 'is not required in order for there to be a meeting of the minds.' Urban Sites of Chicago, LLC v. Crown Castle USA, 979 N.E.2d 480, 496 (Ill. App. Ct. 2012). Some Illinois courts also occasionally refer to this concept as 'mutual consent.' See Artoe v. Cap, 489 N.E.2d 420, 423 (Ill. App. Ct. 1986) ('[M]utual consent [is] essential to the formation of a contract.').

8 Midland Hotel Corp. v. Reuben H. Donnelley Corp., 515 N.E.2d 61, 65 (Ill. 1987).

9 id.

10 Anand v. Marple, 522 N.E.2d 281, 283 (Ill. App. Ct. 1988) (handwritten addition to contract that offer was 'subject to seller's _______,' even though the final word was illegible and unknown, nevertheless clearly added some new condition, such that acceptance did not match offer, and no valid contract was formed). A 'conditional acceptance or one which introduces new terms that vary from those offered' therefore 'constitutes a rejection of the original offer and becomes a counterproposal which must be accepted by the original offeror before a valid contract is formed.' Id.

11 Rose, 799 N.E.2d at 473–74 (Ill. App. Ct. 2003). The 'lack of nonessential details . . . will not render a contract unenforceable.' Id.

12 Foley v. IIR, Inc., 2018 IL App (1st) 170584-U, 63 (first quoting Midland Hotel Corp. v. Reuben H. Donnelley Corp., 515 N.E.2d 61, 65 (Ill. 1987), then quoting Academy Chicago Publishers v. Cheever, 578 N.E.2d 981, 984 (Ill. 1991)). For example, one Illinois court found that the terms regarding duration, interest rate, and date of maturity were essential to form a contract to extend a line of credit. See McErlean v. Union Nat. Bank of Chicago, 414 N.E.2d 128, 132 (Ill. App. Ct. 1980).

13 Prignano v. Prignano, 934 N.E.2d 89, 105 (Ill. App. Ct. 2010).

14 Carter v. SSC Odin Operating Co., LLC, 976 N.E.2d 344, 352 (Ill. 2012) (quoting McInerney v. Charter Golf, Inc., 680 N.E.2d 1347, 1350 (Ill. 1997)).

15 id.

16 United City of Yorkville v. Vill. of Sugar Grove, 875 N.E.2d 1183, 1195 (Ill. App. Ct. 2007) (internal quotation marks omitted).

17 Carter, 976 N.E.2d at 351 (quoting W.E. Erickson Construction, Inc. v. Chicago Title Insurance Co., 641 N.E.2d 861, 864 (Ill. App. Ct. 1994)).

18 A. Epstein & Sons Int'l, Inc. v. Eppstein Uhen Architects, Inc., 945 N.E.2d 18, 24 (Ill. App. Ct. 2011), as modified on denial of reh'g (Mar. 8, 2011).

19 F.R.S. Dev. Co. v. Am. Cmty. Bank & Tr., 58 N.E.3d 26, 32 (Ill. App. Ct. 2016).

20 id.

21 id.

22 Tadros v. Kuzmak, 660 N.E.2d 162, 170 (1995); see also Hannafan & Hannafan, Ltd. v. Bloom, 959 N.E.2d 1280, 1286 (Ill. App. Ct. 2011) ('Parties to a written contract may modify its terms by a subsequent oral agreement'). Note that this rule distinguishes between oral agreements allegedly reached prior to the signing of a written contract, which are merged into the written agreement and generally inadmissible, and oral agreements reached after the written agreement is executed, which are generally admissible. See A.W. Wendell & Sons, Inc. v. Qazi, 626 N.E.2d 280, 287 (Ill. App. Ct. 1993). 'The issues of the existence of an oral modification, its terms and conditions, and the intent of the parties are questions of fact to be determined by the trier of fact.' Id. at 288.

23 See Stevens v. Newman, 2015 IL App (5th) 130338-U, 29 (distinguishing Tadros and holding that the current case was not governed by the rule permitting oral modifications in the face of a written agreement that precluded oral modifications because 'the record before us is devoid of any insinuation [that] an agreement to orally modify the contract after it was signed [actually existed]').

24 K4 Enterprises, Inc. v. Grater, Inc., 914 N.E.2d 617, 624 (Ill. App. Ct. 2009); see also Mannion v. Stallings & Co., 561 N.E.2d 1134, 1138–39 (Ill. App. Ct. 1990) (using the terms 'meeting of the minds' and 'mutual assent' interchangeably). In Illinois, whether there is a 'meeting of the minds' or 'mutual assent' is measured using objective standards. Urban Sites of Chicago, 979 N.E.2d at 496.

25 BMO Harris Bank, N.A. v. Porter, 106 N.E.3d 411, 421 (Ill. App. Ct. 2018).

26 740 ILCS 80/1, 80/2 (West 2019) (agreement to pay the debt of another, to sell an interest in land, to marry, an agreement made by the executor/administrator of an estate, and an agreement that cannot be performed within one year from its making); 810 ILCS 5/2-201 (West 2019) (sale of goods for $500 or more under the Uniform Commercial Code).

27 5 ILCS 175/5-110 (West 2019).

28 See 5 ILCS 175/5-120(c) (West 2019) (excluding the validity of an electronic signature to 'any record that serves as a unique and transferable instrument of rights and obligations including, without limitation, negotiable instruments and other instruments of title wherein possession of the instrument is deemed to confer title, unless an electronic version of such record is created, stored, and transferred in a manner that allows for the existence of only one unique, identifiable, and unalterable original with the functional attributes of an equivalent physical instrument, that can be possessed by only one person, and which cannot be copied except in a form that is readily identifiable as a copy' as well as 'to any rule of law governing the creation or execution of a will or trust' and 'when its application would involve a construction of a rule of law that is clearly inconsistent with the manifest intent of the lawmaking body or repugnant to the context of the same rule of law, provided that the mere requirement of a 'signature' or that a record be 'signed' shall not by itself be sufficient to establish such intent').

29 XL Disposal Corp. v. John Sexton Contractors Corp., 659 N.E.2d 1312, 1316 (Ill. 1995) (internal quotation marks omitted).

30 155 Harbor Drive Condo. Ass'n v. Harbor Point Inc., 568 N.E.2d 365, 375 (Ill. App. Ct. 1991); see also Goldfarb v. Bautista Concrete, Inc., 126 N.E.3d 516, 521 (Ill. App. Ct. 2019) (citing 155 Harbor Drive for the same proposition).

31 Carlson v. Rehab. Inst. of Chicago, 50 N.E.3d 1250, 1255–56 (Ill. App. Ct. 2016).

32 Martis v. Grinnell Mut. Reinsurance Co., 905 N.E.2d 920, 924 (Ill. App. Ct. 2009) (collecting cases).

33 Carlson, 50 N.E.3d 1250 at 1255–56.

34 Tsitiridis v. Mahmoud, 2015 IL App (1st) 141599-U, ¶ 37 (citing Blumenthal v. Brewer, 24 N.E.3d 168, 172–73 (Ill. App. Ct. 2014), rev'd in part and vacated in part on other grounds, 69 N.E.3d 834 (Ill. 2016)) (noting that 'an unjust enrichment claim is . . . sometimes known as a contract implied at law [or] a quasi-contract' and describing the elements of an unjust enrichment claim).

35 Cove Mgmt. v. AFLAC, Inc., 986 N.E.2d 1206, 1215 (Ill. App. Ct. 2013) (reciting the elements of quantum meruit claim).

36 Newton Tractor Sales, Inc. v. Kubota Tractor Corp., 906 N.E.2d 520, 523–24 (Ill. 2009) (describing the elements of a promissory estoppel claim).

37 Steinmetz v. Wolgamot, 995 N.E.2d 338, 349–50 (Ill. App. Ct. 2013) (reciting the elements of an equitable estoppel claim).

38 Hayes Mech., Inc. v. First Indus., L.P., 812 N.E.2d 419, 426 (Ill. App. Ct. 2004). It is important that 'even when a person has received a benefit from another, he is liable for payment 'only if the circumstances of its receipt or retention are such that . . . it is unjust for him to retain it. The mere fact that a person benefits another is not of itself sufficient to require the other to make restitution therefor.' Id. (internal citations omitted).

39 Hayes Mech., 812 N.E.2d at 426.

40 Gold v. Dubish, 549 N.E.2d 660, 664 (Ill. App. Ct. 1989). Specifically, to recover under a promissory estoppel theory, 'the plaintiff must prove that (1) defendant made an unambiguous promise to plaintiff, (2) plaintiff relied on such promise, (3) plaintiff's reliance was expected and foreseeable by defendants, and (4) plaintiff relied on the promise to its detriment.' Newton Tractor Sales, Inc. v. Kubota Tractor Corp., 906 N.E.2d 520, 523–24 (Ill. 2009). 'To establish equitable estoppel, the party claiming estoppel must demonstrate that: (1) the other person misrepresented or concealed material facts; (2) the other person knew at the time he or she made the representations that they were untrue; (3) the party claiming estoppel did not know that the representations were untrue when they were made and when they were acted upon; (4) the other person intended or reasonably expected that the party claiming estoppel would act upon the representations; (5) the party claiming estoppel reasonably relied upon the representations in good faith to his or her detriment; and (6) the party claiming estoppel would be prejudiced by his or her reliance on the representations if the other person is permitted to deny the truth thereof.' Steinmetz v. Wolgamot, 995 N.E.2d 338, 349–50 (Ill. App. Ct. 2013) (holding that defendants were not estopped from raising a statute of limitations defence).

41 Gold, 549 N.E.2d at 664.

42 735 ILCS 5/2-613(b) (West 2019) ('When a party is in doubt as to which of two or more statements of fact is true, he or she may, regardless of consistency, state them in the alternative or hypothetically in the same or different counts or defences. A bad alternative does not affect a good one.').

43 Tsitiridis v. Mahmoud, 2015 IL App (1st) 141599-U, ¶ 39.

44 id.

45 Urban Sites of Chicago, 979 N.E.2d at 489–90.

46 id.

47 Initially, the court must consider only the language of the contract, but it must consider the contract as a whole, 'viewing each part in light of the others' and not '[viewing] any clause or provision standing by itself.' Gallagher v. Lenart, 874 N.E.2d 43, 58 (Ill. 2007). '[I]nstruments executed at the same time, by the same parties, for the same purpose, and in the course of the same transaction are regarded as one contract and will be construed together.' Id.

48 Thompson v. Gordon, 948 N.E.2d 39, 47 (Ill. 2011). A court may consult various dictionaries in order to ascertain the plain meaning of contractual terms. See, e.g., William Blair & Co., LLC v. FI Liquidation Corp., 830 N.E.2d 760, 770 (Ill. App. Ct. 2005) (citing various dictionaries).

49 Urban Sites of Chicago, 979 N.E.2d at 489–90 (citations and internal quotation marks omitted); see also Air Safety, Inc. v. Teachers Realty Corp., 706 N.E.2d 882, 463–64 & n.1 (Ill. 1999) (rejecting 'provisional admission' approach to extrinsic evidence, at least where contract contains explicit integration clause).

50 Thompson, 948 N.E.2d at 47.

51 Urban Sites of Chicago, 979 N.E.2d at 489–90 (quoting Fleet Bus. Credit, LLC v. Enterasys Networks, Inc., 816 N.E.2d 619, 629 (Ill. App. Ct. 2004)).i

52 id.

53 McHenry Sav. Bank v. Autoworks of Wauconda, Inc., 924 N.E.2d 1197, 1205 (Ill. App. Ct. 2010).

54 Countryman v. Indus. Comm'n, 686 N.E.2d 61, 64 (Ill. App. Ct. 1997).

55 Thompson, 948 N.E.2d at 47.

56 Insite Inv. Partners I, LLC v. Cooper's Hawk Orland Park Real Estate, LLC, 2013 IL App (1st) 123796-U, ¶24.

57 Nerone v. Boehler, 340 N.E.2d 534, 536 (1976).

58 Greene v. Gust, 167 N.E.2d 438, 441 (Ill. App. Ct. 1960).

59 Sterling-Midland Coal Co. v. Great Lakes Coal & Coke Co., 165 N.E. 793, 796 (1929).

60 Countryman, 686 N.E.2d at 64.

61 Lobo IV, LLC v. V Land Chicago Canal, LLC, 2019 IL App (1st) 170955, 66 (quoting Shorr Paper Prod., Inc. v. Aurora Elevator, Inc., 555 N.E.2d 735, 737 (Ill. App. Ct. 1990)).

62 Countryman, 686 N.E.2d at 64.

63 id.

64 Lobo IV, 2019 IL App (1st) 170955, 66 (quoting Shorr Paper, 555 N.E.2d at 737).

65 id. (quoting Thompson, 948 N.E.2d at 47).

66 id. (quoting Shorr Paper, 555 N.E.2d at 737).

67 Dancor Const., Inc. v. FXR Const., Inc., 64 N.E.3d 796, 813 (Ill. App. Ct. 2016).

68 Brandt v. MillerCoors, LLC, 993 N.E.2d 116, 119 (Ill. App. Ct. 2013) (quoting Calanca v. D & S Mfg. Co., 510 N.E.2d 21, 23 (Ill. App. Ct. 1987)).

69 Calanca, 510 N.E.2d at 23–24. Courts often refer to these as the 'Calanca factors.' See, e.g., Patrick v. Allstate Ins. Co., 2018 IL App (1st) 17-1301-U, 24–25 (reciting the factors and referring to them as the 'Calanca factors'); Aon Corp. v. Utley, 863 N.E.2d 701, 707–08 (2006) (same).

70 Solargenix Energy, LLC v. Acciona, S.A., 17 N.E.3d 171, 182 (Ill. App. Ct. 2014) (citations and internal quotation marks omitted).

71 GPS USA, Inc. v. Performance Powdercoating, 26 N.E.3d 574, 584 (Ill. App. Ct. 2015).

72 IFC Credit Corp. v. Rieker Shoe Corp., 881 N.E.2d 382, 389 (Ill. App. Ct. 2007).

73 815 ILCS 665/10 (West 2019); McCoy v. Gamesa Tech. Corp., No. 11 C 592, 2012 WL 245162, at *6 (N.D. Ill. Jan. 26, 2012) (holding that '[t]he Illinois Construction Act . . . renders the forum selection and choice-of-law clauses unenforceable'). Note that provisions requiring arbitration in another state are valid, because the Federal Arbitration Act (FAA) preempts this statute. R.A. Bright Const., Inc. v. Weis Builders, Inc., 930 N.E.2d 565, 572 (Ill. App. Ct. 2010) ('[W]e find the FAA preempts the Illinois Building and Construction Contract Act.').

74 Solargenix Energy, LLC, 17 N.E.3d at 182.

75 IFC Credit Corp., 881 N.E.2d at 395.

76 Bank of Am., N.A. v. 108 N. State Retail LLC, 928 N.E.2d 42, 55 (Ill. App. Ct. 2010) (holding that 'a decision by a party to contractually agree to waive all defenses is permitted' and collecting cases).

77 Ramonas v. Kerelis, 243 N.E.2d 711, 715 (Ill. App. Ct. 1968) (holding that contractual provisions agreeing to arbitrate disputes arising from the contract were enforceable if they were entered into after Illinois adopted the Uniform Arbitration Act); see also Fuqua v. SVOX AG, 13 N.E.3d 68, 80 (Ill. App. Ct. 2014) (upholding arbitration agreement in the employment context and noting that 'arbitration agreements are evaluated under the same standards as any other contract').

78 710 ILCS 5/1-1 (West 2019).

79 Bess v. DirecTV, Inc., 885 N.E.2d 488, 493 (Ill. App. Ct. 2008).

80 Phoenix Ins. Co. v. Rosen, 949 N.E.2d 639, 647 (Ill. 2011).

81 Board of Managers of Courtyards at Woodlands Condo. Ass'n v. IKO Chicago, Inc., 697 N.E.2d 727, 732 (Ill. 1998).

82 Cook County Cir. Ct. R. 25.1 (Dec. 11, 2014) ('Mandatory Arbitration will be held in those commercial cases assigned to the Commercial Calendar Section of the Law Division, including cases with self-represented or pro se litigants, with damages of less than $75,000'); see also Ill. Sup. Ct. R. 86 (authorizing each judicial circuit to adopt rules for mandatory arbitration).

83 Burkhart v. Wolf Motors of Naperville, Inc., 61 N.E.3d 1155, 1159 (Ill. App. Ct. 2016); Gallagher Corp. v. Russ, 721 N.E.2d 605, 611 (Ill. App. Ct. 1999).

84 EL & BE, Inc. v. Hussein, 2016 IL App (2d) 150011-U, 24 (citing Brewer v. Custom Builders Corp., 356 N.E.2d 565, 570 (Ill. App. Ct. 1976)).

85 id. (citing Joray Mason Contractors, Inc. v. Four J's Constr. Corp., 378 N.E.2d 328, 330 (Ill. App. Ct. 1978)).

86 Doornbos Heating & Air Conditioning, Inc. v. Schlenker, 932 N.E.2d 1073, 1088 (Ill. App. Ct. 2010).

87 Slay v. Allstate Corp., 115 N.E.3d 941, 950 (Ill. App. Ct. 2018) (quoting McCleary v. Wells Fargo Secs, LLC, 29 N.E.3d 1087 (Ill. App. Ct. 2015)).

88 Slay, 115 N.E.3d 941 at 950-51.

89 id. at 951.

90 McCleary, 29 N.E.3d at 1093.

91 See, e.g., 810 ILCS 5/2A-402 (West 2019) (anticipatory repudiation for the sale of goods).

92 Velasquez v. Downer Place Holdings, LLC, 118 N.E.3d 659, 670 (Ill. App. Ct. 2018).

93 In re Marriage of Olsen, 528 N.E.2d 684, 686 (Ill. 1988).

94 Tower Inv'rs, LLC v. 111 E. Chestnut Consultants, Inc., 864 N.E.2d 927, 940 (Ill. App. Ct. 2007).

95 735 ILCS 5/13-206 (West 2019).

96 735 ILCS 5/13-205 (West 2019).

97 810 ILCS 5/2-725 (West 2019).

98 id.; see also Hermitage Corp. v. Contractors Adjustment Co., 651 N.E.2d 1132, 1135 (Ill. 1995) ('For contract actions and torts arising out of contractual relationships, . . . the cause of action ordinarily accrues at the time of the breach of contract, not when a party sustains damages.').

99 Schreiber v. Hackett, 527 N.E.2d 412, 413 (Ill. App. Ct. 1988).

100 See supra Part II(i).

101 Doyle v. Holy Cross Hosp., 186 Ill. 2d 104, 708 N.E.2d 1140, 1145 (Ill. 1999) (quoting Steinberg v. Chicago Med. Sch., 371 N.E.2d 634, 639 (Ill. 1977)).

102 Prairie Rheumatology Assocs., S.C. v. Francis, 24 N.E.3d 58, 62 (Ill. App. Ct. 2014).

103 id.

104 id. at 62–63.

105 Dowd & Dowd, Ltd. v. Gleason, 693 N.E.2d 358, 370 (Ill. 1998).

106 Mohanty v. St. John Heart Clinic, S.C., 866 N.E.2d 85, 92 (Ill. 2006).

107 Phoenix Ins. Co. v. Rosen, 949 N.E.2d 639, 644–45 (Ill. 2011).

108 Mohanty, 866 N.E.2d 85 at 92.

109 id.

110 K. Miller Const. Co. v. McGinnis, 938 N.E.2d 471, 477–78 (Ill. 2010) (applying Restatement (Second) of Contracts § 178 (1981)).

111 1550 MP Rd., LLC v. Teamsters Local Union No. 700, 131 N.E.3d 99, 109 (Ill. 2019) (quoting Restatement (Second) of Contracts § 178 (1981)).

112 Colony BMO Funding, LLC v. Madan, 2016 IL App (1st) 141946-U, 30 (citing In re Marriage of Tabassum, 881 N.E.2d 396, 410 (Ill. App. Ct. 2007)).

113 O'Shea v. Bleek, 2018 IL App (2d) 180333-U, 70 (quoting Alexander v. Standard Oil Co., 423 N.E.2d 578, 582 (Ill. App. Ct. 1981)).

114 Urban P'ship Bank v. DKY Developers, 2019 IL App (1st) 181918-U, 58 (quoting Carlile v. Snap-on Tools, 648 N.E.2d 317, 322 (Ill. App. Ct. 1995)).

115 id. (quoting Carlile, 648 N.E.2d at 322).

116 Albert James Isaac, III v. Peck Bloom, LLC, 2019 IL App (1st) 182602-U, 43.

117 id.

118 The Restatement of Contracts uses the term impracticability to define what courts would have described as impossibility. See Lowenschuss v. Kane, 520 F.2d 255, 265 (2d Cir. 1975) (citing Restatement (First) of Contracts § 454 (1932)). Therefore, the two terms are used interchangeably here.

119 Ury v. Di Bari, 2016 IL App (1st) 150277-U, 22 (quoting Leonard v. Autocar Sales & Serv. Co., 64 N.E.2d 477, 479 (Ill. 1945)).

120 Leonard, 64 N.E.2d at 479.

121 id. at 480.

122 Illinois-American Water Co. v. City of Peoria, 774 N.E.2d 383, 391 (Ill. App. Ct. 2002).

123 id.

124 Ury, 2016 IL App (1st) 150277-U, 24.

125 id. 30 (citing Illinois-American Water, 774 N.E.2d at 390).

126 id. 30–31.

127 id. 30; see also Illinois-American Water, 77 N.E.2d at 390–91.

128 Ury, 2016 IL App (1st) 150277-U, 31.

129 Sheller by Sheller v. Frank's Nursery & Crafts Inc., 957 F. Supp. 150, 153 (N.D. Ill. 1997) (quoting Iverson v. Scholl Inc., 483 N.E.2d 893, 897 (Ill. App. Ct. 1985)).

130 755 ILCS 5/11-1 (West 2019); see also Tersavich v. First Nat'l Bank & Trust Co., 551 N.E.2d 815, 817 (Ill. App. Ct. 1990).

131 Eubanks v. Eubanks, 195 N.E. 521, 526 (Ill. 1935); see also Curry v. Curry, 334 N.E.2d 742, 745 (Ill. App. Ct. 1975).

132 Iverson, 483 N.E.2d at 897.

133 Spanish Court Two Condo. Ass'n v. Carlson, 12 N.E.3d 1, 6 (Ill. 2014).

134 Radiant Star Enter.s, LLC v. Metropolis Condo. Ass'n, 107 N.E.3d 877, 893 (Ill. App. Ct. 2018).

135 InsureOne Indep. Ins. Agency, LLC v. Hallberg, 976 N.E.2d 1014, 1027 (Ill. 2012).

136 Thorne v. Riggs, 2013 IL App (3d) 120244-U, 62 (citing Obermaier v. Obermaier, 470 N.E.2d 1047, 1051 (Ill. App. Ct. 1984)).

137 Isaac v. Peck Bloom, LLC, 2019 IL App (1st) 182602-U, 46.

138 Jordan v. Knafel, 880 N.E.2d 1061, 1071 (Ill. App. Ct. 2007) (citing Miller v. William Chevrolet/GEO, Inc., 762 N.E.2d 1, 7 (Ill. App. Ct. 2001)).

139 Bank of Am. v. All About Drapes, Inc., 2017 IL App (1st) 162849-U, 35.

140 id. (quoting Doe v. Dilling, 888 N.E.2d 24, 35 (Ill. 2008)).

141 Pack v. Maslikiewicz, 2019 IL App (1st) 182447, 95 (quoting Zimmerman v. Northfield Real Estate, Inc., 510 N.E.2d 409, 413 (Ill. App. Ct. 1986)).

142 Thorne v. Riggs, 2013 IL App (3d) 120244-U, 63 (citing Hassan v. Yusuf, 944 N.E.2d 895, 912 (Ill. App. Ct. 2011)).

143 23-25 Bldg. P'ship v. Testa Produce, Inc., 886 N.E.2d 1156, 1163 (Ill. App. Ct. 2008) (citing Tower Inv'rs, LLC v. 111 E. Chestnut Consultants, Inc., 864 N.E.2d 927, 939 (Ill. App. Ct. 2007)).

144 In re Marriage of Ardelean, 2015 IL App (2d) 140142-U 31 (quoting Restatement (Second) of Contracts §166 (1981)).

145 id. 27 (quoting Restatement (Second) of Contracts § 151 (1981)).

146 In re Marriage of McGuinn, 2018 IL App (2d) 161065-U, 26 (quoting Cameron v. Bogusz, 711 N.E.2d 1194, 1197 (Ill. App. Ct. 1999)).

147 Rayford v. Monroe/Wabash Dev., LLC, 2014 IL App (1st) 130448-U 79 (quoting Cameron, 711 N.E.2d at 1198).

148 id. (quoting Cameron, 711 N.E.2d at 1198).

149 Shaw v. Lund, 406 N.E.2d 109, 111 (Ill. App. Ct. 1980).

150 Ill. Ins. Guar. Fund v. Nwidor, 105 N.E.3d 1035, 1047 (Ill. App. Ct. 2018).

151 id.

152 Jordan, 880 N.E.2d at 1073 (citing Restatement (Second) of Contracts § 152 (1981)).

153 In re Marriage of Ardelean, 2015 IL App (2d) 140142-U, 28 (citing Restatement (Second) of Contracts § 153 (1981)).

154 Cameron v. Bogusz, 711 N.E.2d 1194, 1198 (Ill. App. Ct. 1999) (citing Brzozowski v. Northern Trust Co., 618 N.E.2d 405, 409 (Ill. App. Ct. 1993)); see also Wil–Fred's, Inc. v. Metro. Sanitary Dist. of Greater Chi., 372 N.E.2d 946, 951 (Ill. App. Ct. 1978)).

155 Vandenberg v. Brunswick Corp., 90 N.E.3d 1048, 1057 (Ill. App. Ct. 2017) (citing McCracken Contracting Co. v. R.L. DePrizio & Assocs., Inc., 462 N.E.2d 682, 686 (Ill. App. Ct. 1984)).

156 id.

157 1550 MP Rd., LLC v. Teamsters Local Union No. 700, 91 N.E.3d 444, 466 (Ill. App. Ct. 2017), rev'd in part on other grounds, 131 N.E.3d 99, 103 n.1 (Ill. 2019) (citing HPI Health Care Servs., Inc. v. Mt. Vernon Hosp., Inc., 545 N.E.2d 672, 676 (Ill. 1989)).

158 Peppercorn 1248, LLC v. Artemis DCLP LLP, 2016 IL App (1st) 143791-U, 113 (citing In re Estate of Albergo, 656 N.E.2d 97, 103 (Ill. App. Ct. 1995)).

159 id. (citing Albergo, 656 N.E.2d at 103).

160 Sullivan's Wholesale Drug Co. v. Faryl's Pharma. Inc., 573 N.E.2d 1370, 1375 (Ill. App. Ct. 1991).

161 Dowd & Dowd, Ltd. v. Gleason, 693 N.E.2d 358, 370 (Ill. 1998).

162 1472 N. Milwaukee, Ltd. v. Feinerman, 996 N.E.2d 652, 658 (Ill. App. Ct. 2013) ('Where a plaintiff demands damages, the plaintiff carries the burden of proof to show that he sustained damages resulting from the defendant's breach. . . . The plaintiff must also establish the correct measure of damages and the final computation of damages based upon that measurement'); see also Morse v. Donati, 2019 IL App (2d) 180328, 18 ('Damages are an essential element of a breach of contract action and a claimant's failure to prove damages entitles the defendant to judgment as a matter of law'.).

163 Kirkpatrick v. Strosberg, 894 N.E.2d 781, 792 (Ill. App. Ct. 2008) (noting that 'the burden is on the plaintiff to establish a reasonable basis for computing damages,' and they 'must be proved with reasonable certainty and cannot be based on conjecture or speculation' even though 'absolute certainty . . . is not required').

164 735 ILCS 5/2-1303 (West 2019) (setting the standard post-judgment interest rate at 9%).

165 815 ILCS 205/2 (West 2019) (providing for pre-judgment interest at 5% for certain creditors); see also Adam N. Hirsch, Getting What's Due: Prejudgment Interest in Illinois, Ill. Bar J., Aug. 2010, at 1, 3 & nn. 19–34, https://www.ralaw.com/storage/illinois%20bar%20magazine%20-%20hirsch.pdf (explaining the doctrine and collecting cases, including, e.g., Milligan v. Gorman, 810 N.E.2d 537, 541 (Ill. App. Ct. 2004) (holding that breach of a settlement agreement can trigger pre-judgment interest)).

166 Schwinder v. Austin Bank of Chicago, 809 N.E.2d 180, 195 (Ill. App. Ct. 2004) ('The principle underlying the specific performance remedy is to grant equitable relief where the damage remedy at law is inadequate').

167 For damages under the Uniform Commercial Code, see 810 ILCS 5/2-701 et seq. (West 2019) (titled 'Remedies').

168 Walker v. Ridgeview Construction Co., 736 N.E.2d 1184, 1187 (Ill. App. Ct. 2000).

169 F. E. Holmes & Son Const. Co. v. Gualdoni Elec. Serv., Inc., 435 N.E.2d 724, 728 (Ill. App. Ct. 1982).

170 Ramshaw Real Estate, Inc. v. Illinois Properties, Inc., 2013 IL App (4th) 121091-U, 51 (citing Rivenbark v. Finis P. Ernest, Inc., 346 N.E.2d 494, 496–97 (Ill. App. Ct. 1976)).

171 Barton Chem. Corp. v. Pennwalt Corp., 436 N.E.2d 51, 54 (Ill. App. Ct. 1982).

172 Westlake Fin. Grp., Inc. v. CDH-Delnor Health Sys., 25 N.E.3d 1166, 1175 (Ill. App. Ct. 2015).

173 See, e.g., Barton Chem. Corp. v. Pennwalt Corp., 436 N.E.2d 51, 54 (Ill. App. Ct. 1982) (finding that an award of lost profits was improper where the business revenue 'varied greatly from year to year').

174 Westlake Fin. Grp., Inc., 25 N.E.3d at 1175 (internal quotation marks omitted).

175 id.

176 id. at 1168–69.

177 id. at 1174–79; see also Aculocity, LLC v. Force Mktg. Holdings, LLC, No. 17 CV 2868, 2019 WL 764040, at *3 (N.D. Ill. Feb. 21, 2019) (applying Illinois law and holding that plaintiff would not be denied the opportunity to pursue lost profits on defendant's motion for summary judgment).

178 Merry Gentleman, LLC v. George & Leona Prods., Inc., 799 F.3d 827, 829 (7th Cir. 2015).

179 id. (citing MC Baldwin Fin. Co. v. DiMaggio, Rosario & Veraja, LLC, 845 N.E.2d 22, 30 (Ill. App. Ct. 2006) (comparing expectation and reliance damages)).

180 id. (quoting Herbert W. Jaeger & Associates v. Slovak American Charitable Ass'n, 507 N.E.2d 863, 868 (Ill. App. Ct. 1987)).

181 Leyshon v. Diehl Controls N. Am., Inc., 946 N.E.2d 864, 877 (Ill. App. Ct. 2010).

182 Morrow v. L.A. Goldschmidt Assocs., Inc., 492 N.E.2d 181, 184 (Ill. 1986); see also Franz v. Calaco Dev. Corp., 818 N.E.2d 357, 366 (Ill. App. Ct. 2004) (holding that punitive damages 'are available only in cases where the wrongful act complained of is characterized by wantonness, malice, oppression, willfulness, or other circumstances of aggravation').

183 O'Shield v. Lakeside Bank, 781 N.E.2d 1114, 1119 (Ill. App. Ct. 2002) ('[P]arties' rights under the contract are limited by the terms expressed therein'.).

184 id.; see also Intrastate Piping & Controls, Inc. v. Robert–James Sales, Inc., 733 N.E.2d 718, 724 (Ill. App. Ct. 2000) (same).

185 Lamp, Inc. v. Int'l Fid. Ins. Co., 493 N.E.2d 146, 149 (Ill. App. Ct. 1986) (enforcing indemnity agreement but noting that '[t]he indemnitee, however, is still required to establish, by competent evidence, its reasonable fees and costs').

186 Downs v. Rosenthal Collins Grp., LLC, 895 N.E.2d 1057, 1058–59 (Ill. App. Ct. 2008).

187 id.

188 Rayner Covering Sys., Inc. v. Danvers Farmers Elevator Co., 589 N.E.2d 1034, 1037 (Ill. App. Ct. 1992) ('[E]xculpatory or limitation of damages clauses are not favored'.).

189 Jewelers Mut. Ins. Co. v. Firstar Bank Illinois, 792 N.E.2d 1, 5 (Ill. App. Ct. 2003), aff'd, 820 N.E.2d 411 (Ill. 2004).

190 Rayner Covering Sys., Inc., 589 N.E.2d at 1037.

191 Karimi v. 401 N. Wabash Venture, LLC, 952 N.E.2d 1278, 1285 (Ill. App. Ct. 2011) ('[C]ourts [will] evaluate each [liquidated damages clause] on its own facts and circumstances'.).

192 Dallas v. Chicago Teachers Union, 945 N.E.2d 1201, 1204–05 (Ill. App. Ct. 2011) (liquidated damages clause in confidentiality agreement enforced after breach of the contract); see also Karimi, 952 N.E.2d 1278 at 1285 (applying the same test in the real estate context).

193 Schwinder v. Austin Bank of Chicago, 809 N.E.2d 180, 195 (Ill. App. Ct. 2004).

194 Stofer v. First Nat'l Bank of Effingham, 571 N.E.2d 157, 163 (Ill. App. Ct. 1991).

195 Omni Partners v. Down, 614 N.E.2d 1342, 1346 (Ill. App. Ct. 1993).

196 Schwinder, 809 N.E.2d at 195.

197 Chapman v. Hosek, 475 N.E.2d 593, 598 (Ill. App. Ct. 1985) (noting that the fraud may consist of a misrepresentation or concealment of a material fact).

198 Clara Wonjung Lee, DDS, Ltd. v. Robles, 2014 IL App (1st) 122872-U, 25 (citing Peddinghaus v. Peddinghaus, 692 N.E.2d 1221, 1225 (Ill. App. Ct. 1998) ('The elements of an equitable claim for rescission on the basis of fraud and misrepresentation are: a statement of material fact, made to induce the other party to act; the statement is false and known by the party making it to be false; and the party to whom the statement is made must reasonably believe it to be true and rely thereon to his damage').

199 United City of Yorkville v. Vill. of Sugar Grove, 875 N.E.2d 1183, 1195 (Ill. App. Ct. 2007).

200 Allianz Ins. Co. v. Guidant Corp., 869 N.E.2d 1042, 1062 (Ill. App. Ct. 2007) (citing Cusamano v. Norrell Health Care, Inc., 607 N.E.2d 246 (Ill. App. Ct. 1992)).

201 United City of Yorkville, 875 N.E.2d at 1195.

202 First Mercury Ins. Co. v. Ciolino, 107 N.E.3d 240, 252–53 (Ill. App. Ct. 2018).

203 The Supreme Court of Illinois is the state's highest court and has seven justices. The Illinois Appellate Court is the state's intermediate appellate court, with at least 42 judges divided into five districts. (Additional judges can be assigned by the Supreme Court to the Appellate Court, temporarily, on a showing of need.) See http://www.illinoiscourts.gov/General/CourtsInIL.asp.