Overview of Our Breach of Contract Legal Services

Breach of Contract Legal Services For Illinois Businesses

Our Chicago business attorneys handle a wide array of breach of contract matters. These matters often include, but are not limited to, disputes over service contracts where one party fails to fulfill their obligations, leading to complications in professional relationships and potential financial losses. We also frequently deal with issues surrounding sales contracts, where goods or services are not delivered as promised, causing disruptions in supply chains and business operations. Employment contract breaches form another significant area of our expertise, often involving scenarios where either an employer or an employee does not adhere to the terms regarding employment conditions, compensation, or termination. In addition, our business attorney handle breaches in lease agreements, which can have substantial implications for both landlords and tenants in terms of property use and financial liability. Furthermore, we handle breaches related to partnership agreements, operating agreements, and shareholder agreements, a complex area where disagreements or failures to comply with the terms can affect the governance and financial health of a company. If you or your business has a breach of contract matter, please reach out to our law firm to see how we can assist.

Understanding Breach of Contract Issues

A breach of contract occurs when a party fails to perform its obligations as specified in a contract. The breach may be a result of non-performance, non-delivery, or failure to meet the terms and conditions of the agreement. Contract disputes also occur over a disagreement about the terms and conditions of a contract. Third parties, that are not parties to the contract, can be involved in contract disputes by way of interference or tortious interference.

In Illinois, there are two types of contract breaches: material and immaterial. A material breach of contract is a significant failure to perform one’s obligations under the agreement and is considered a fundamental violation of the contract. This type of breach gives the non-breaching party the right to terminate the contract and seek damages. An immaterial breach of contract, on the other hand, is a minor failure to perform one’s obligations under the agreement. This type of breach does not give the non-breaching party the right to terminate the contract, but the non-breaching party may be entitled to seek damages for any loss or injury suffered as a result of the breach.

Elements of a breach of contract claim

The elements of a breach of contract claim are (1) The existence of a valid and enforceable contract. There must be a valid, enforceable contract between the parties, which includes all of the essential terms of a contract such as offer, acceptance, consideration, and mutual assent. (2) Performance by one party. The plaintiff must have fulfilled their obligations under the contract, or must be ready, willing, and able to do so. (3) Breach by the other party. The defendant must have failed to perform their obligations under the contract, or must have performed in a manner that falls short of the agreed-upon terms (i.e. the “breach”). (4) Causation. The plaintiff must show that the defendant’s breach caused them to suffer harm or damages. (5) Damages. The plaintiff must prove that they suffered actual damages as a result of the defendant’s breach. Damages can include monetary losses or nonmonetary losses.

Oral Contracts in Illinois

Oral contracts are legally enforceable in Illinois, just like written contracts. An oral contract is an agreement that is made verbally, rather than in writing. An oral contract can be formed by a verbal exchange between two or more parties, or by the conduct of the parties indicating an agreement.
In order to enforce an oral contract, the party seeking to enforce the contract must prove the existence of a valid contract, including the terms of the agreement, the parties’ intent to be bound by the agreement, and consideration (something of value exchanged between the parties). This can be a challenging task, as it can be difficult to prove the terms of an oral contract and the parties’ intent to be bound by the agreement.

It is generally recommended to put contracts in writing, especially for important or complex agreements, to avoid disputes about the terms of the contract and to have a clear record of the agreement in the event of a breach. If you are involved in an oral contract dispute in Illinois, it is a good idea to seek the advice of an attorney to help you to understand your rights and options.

The Statute of Frauds is a legal principle that requires certain types of contracts to be in writing in order to be enforceable. The Statute of Frauds is a common law principle that has been adopted in some form by most states, including Illinois.

The purpose of the Statute of Frauds is to prevent fraud and misrepresentation in certain types of contracts, where it would be difficult to prove the existence of a valid agreement without a writing. Under the Statute of Frauds, the following types of contracts must be in writing in order to be enforceable: contracts that cannot be performed within one year; contracts for the sale of goods for more than $500; contracts for the sale of real estate; contracts for the creation of a will; contracts for the transfer of an interest in real estate; contracts for the payment of debt by a third party; and contracts made in consideration of marriage.
Although the Statute of Frauds requires certain types of contracts to be in writing, an oral agreement may still be enforceable under certain circumstances. For example, if the parties have partially performed their obligations under the contract, or if one party has relied on the agreement to their detriment, an oral agreement may be enforceable despite the Statute of Frauds.

Common Breaches of Contract

A contract can be breached in several ways, including failure to perform, partial performance, improper performance, anticipatory breach and material breach. Failure to perform occurs when one party fails to perform their obligations under the contract as agreed. For example, if one party promised to deliver goods by a certain date, and they failed to do so, this would be a breach of contract.

Partial performance occurs when one party performs their obligations under the contract, but their performance falls short of what was promised in the contract. For example, if one party promised to deliver a certain number of goods, but only delivered half the number, this would be a partial breach of contract.

Improper performance occurs when one party performs their obligations under the contract, but their performance is not in accordance with the terms of the contract. For example, if one party promised to deliver goods of a certain quality, but the goods delivered were of a lower quality, this would be a breach of contract.

Anticipatory breach occurs when one party indicates, prior to the performance deadline, that they will not perform their obligations under the contract. For example, if one party informs the other party that they will not deliver the goods as promised, this would be an anticipatory breach of contract.

Material breach occurs when one party breaches a material term of the contract, which goes to the heart of the agreement. For example, if one party promised to pay for the goods delivered, and they failed to do so, this would be a material breach of contract.
The specific circumstances of each case will determine whether a breach has occurred and what type of breach it is. A breach of contract can have serious consequences to individuals and businesses alike, including liability for damages and potential legal action, so the parties should try to be familiar with the terms of their contracts and to perform their obligations as agreed.

Tortious Interference with Contract

Tortious interference with contract occurs when a third party intentionally interferes with a contractual relationship between two parties, causing a breach of the contract and resulting in damages to one or both parties. For a tortious interference with contract claim, a plaintiff must establish (1) a valid and enforceable contract; (2) defendant’s knowledge of the existence of the contract; (3) that defendant intentionally interfered with the contractual relationship, either by inducing one of the parties to breach the contract or by causing one of the parties to fail to perform their obligations under the contract; (4) that defendant’s interference was improper or wrongful, such as through the use of fraud, duress or other illegal means; and (5) that they suffered damages as a result of the defendant’s interference, such as lost profits, lost business opportunities, or other economic harm. If a plaintiff is successful in proving all five elements of tortious interference with contract, they may be entitled to remedies such as monetary damages or injunctive relief to prevent the defendant from continuing to interfere with the contractual relationship.

Damages in Breach of Contract Cases

The purpose of damages in a breach of contract case is to place the non-breaching party in the position they would have been in had the contract been performed as agreed. The following are the types of damages that may be awarded in a breach of contract case in Illinois: compensatory damages, consequential damages, liquidated damages and punitive damages.

Compensatory damages are the most common type of damages awarded in a breach of contract case and are intended to compensate the non-breaching party for their actual losses or expenses resulting from the breach. Compensatory damages are intended to make the plaintiff “whole” again, by awarding them an amount of money that will put them in the position they would have been in had the harm not occurred.

In Illinois, there are two types of compensatory damages: economic damages and non-economic damages. Economic damages compensate the plaintiff for actual financial losses, such as medical expenses, lost wages, property damage, and other out-of-pocket expenses. Non-economic damages compensate the plaintiff for intangible losses, such as pain and suffering, emotional distress, loss of consortium, and other similar losses.

Consequential damages, known as indirect or special damages, are damages that are a direct result of the breach but are not a direct result of the contract itself. Consequential damages can be recovered only if they were reasonably foreseeable at the time the contract was made or the harm occurred. The plaintiff must prove that the damages were a natural consequence of the defendant’s breach and that the defendant was aware, or should have been aware, of the potential for such damages. Examples of consequential damages may include lost profits, lost business opportunities, and other indirect costs incurred as a result of the defendant’s breach of contract.

Liquidated damages are predetermined contractual damages. If the contract provides for liquidated damages in the event of a breach, the non-breaching party can recover these damages, which are determined by the parties in advance, while the contract is being drafted and negotiated, as the amount of compensation that should be paid in the event of a breach. The purpose of liquidated damages is to provide a measure of certainty and predictability in the event of a breach, and to avoid the need for costly and time-consuming litigation to determine the amount of damages.

Liquidated damages clauses are generally enforceable as long as they meet certain requirements. Specifically, the amount of the liquidated damages must be a reasonable estimate of the actual damages that the non-breaching party would suffer as a result of the breach. If the liquidated damages are excessive or disproportionate to the actual damages suffered, then they may be deemed a penalty and may not be enforceable.

Illinois law also requires that the liquidated damages clause be clear and unambiguous, and that the parties have equal bargaining power when negotiating the contract. If the liquidated damages clause is deemed to be a penalty or if it is not clear and unambiguous, then the clause may be unenforceable.

Punitive damages are not typically awarded in breach of contract cases but may be awarded in certain circumstances where the defendant’s conduct was malicious, fraudulent, or reckless.

In Illinois, the non-breaching party has a duty to mitigate their damages, meaning they must take reasonable steps to minimize the impact of the breach on their business.

Defenses to breach of contract cases

There are a number of defenses that a defendant may raise to defend against a breach of contract claim. Some of the most common defenses include:
Lack of consideration: The defendant may argue that the contract was not supported by consideration, meaning that the parties did not exchange something of value in exchange for the promises made in the contract.

  • Illegality: The defendant may argue that the contract is illegal or against public policy and, therefore, unenforceable.
  • Mistake: The defendant may argue that there was a mutual mistake by the parties regarding a material term of the contract, which would make the contract voidable.
  • Duress or undue influence: The defendant may argue that they were forced into entering into the contract due to duress or undue influence, which would make the contract voidable.
  • Impossibility of performance: The defendant may argue that they were unable to perform their obligations under the contract due to an event or circumstance beyond their control, such as a natural disaster or the unavailability of a necessary component.
  • Statute of limitations: The defendant may argue that the plaintiff’s breach of contract claim is barred by the statute of limitations, which is the deadline for filing a lawsuit.
  • Ambiguity: Contracts, or portions thereof, can be vague, confusing and ambiguous. Ambiguous terms in a contract can lead to serious misunderstanding and can often result in disputes regarding the terms of the contract. Contracts will typically be construed in a light most favorable to the non-drafting party.

The burden of proof is on the defendant to prove that a defense applies in their case, and the defenses available to a defendant will depend on the specific facts and circumstances of the case.

In Illinois, the recovery of attorney’s fees in a contract dispute depends on the provisions of the contract and the applicable law. Generally speaking, attorney’s fees are not recoverable in breach of contract cases unless the contract specifically provides for them or the law provides for their recovery in a specific type of contract.

If the contract provides for the recovery of attorney’s fees in the event of a breach, the prevailing party in a lawsuit may be entitled to recover their attorney’s fees as damages. The amount of attorney’s fees recoverable will depend on the terms of the contract and the actual fees incurred by the prevailing party in the litigation.

Additionally, some statutes in Illinois, such as the Consumer Fraud and Deceptive Business Practices Act, provide for the recovery of attorney’s fees in certain types of disputes. For example, if a consumer brings a claim under the Consumer Fraud and Deceptive Business Practices Act and prevails, they may be entitled to recover their attorney’s fees as part of their damages.

It is important to carefully review the provisions of a contract and the applicable law to determine whether attorney’s fees are recoverable in a specific contract dispute in Illinois. Our Chicago breach of contract attorneys can help you understand your rights and the options available to you in the event of a breach of contract. If a breach of contract dispute arises, the parties may attempt to resolve the issue through negotiation or mediation. If the issue cannot be resolved, the non-breaching party may choose to file a lawsuit in a court of law to seek damages or other remedies.

Chicago Business Attorneys

Our Chicago business attorneys handle a wide range of breach of contract disputes throughout the Chicagoland area, including Cook, DuPage, Kane, Lake, Lee, McHenry, Will and Winnebago counties. If you’re facing a breach of contract issue, we’re here to help. Our experienced Chicago attorneys understand how stressful and complicated these situations can be. We have a strong track record of successfully resolving various contract disputes, from issues with service and sales contracts to employment and lease agreements. Our approach is client-focused, ensuring your needs and interests are at the forefront. We encourage you to reach out to us for a consultation. Let’s discuss your specific situation and see how we can assist in finding a favorable resolution for your legal needs. Contact us today to see how our expertise can work for you.