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More Contract Law FAQs

Contract law can prove quite complicated.  This post addresses additional FAQs.

Q.        What constitutes “performance”?

A party “performs” by doing what the contract requires.  Performance may become disputed, especially where the contract is unclear.

Q.        What are my remedies if the other party breached our contract?

The type of transaction and the contract terms may affect the answer.  Generally speaking, a non-breaching party may recover money damages from the breaching party.  Certain contracts also permit non-monetary “equitable remedies.” Please refer to our “equitable remedies” blog for a better explanation.

Q.        What damages can I recover for breach of contract?

Illinois law treats most contract damages as “compensatory.”  A court usually requires the breaching party to pay only what is necessary to put the non-breaching party in the same position as if the contract had been performed.  “Compensatory” damages may include lost profits, although contracts sometimes prohibit their recovery.  In some cases, a contract may let a party recover interest and/or attorneys’ fees.

Illinois law does not recognize punitive damages, or awards for pain and suffering in contract cases.

Q.        What “defenses” can I assert to a breach of contract lawsuit?

The answer depends on the type of transaction and the specific contract terms (business contracts often waive certain defenses).  This section identifies a list of some potential defenses.

  1. Waiver

A party may voluntarily forfeit certain contract rights, which is called “waiver.”  Once a party waives contract rights, she can no longer enforce those rights.

  1. Illegality / Voidness

Illinois law prohibits certain transactions, and imposes restrictions on other types of transactions.  A party sued for breach of contract may assert this defense if the object of the contract is illegal or violates public policy.  For example, a party sued for a real estate commission can defend by showing that the plaintiff lacks a real estate license.

  1. Fraud in the Inducement

The essence of any contract is an agreement.  A defendant who proves the plaintiff tricked her into signing the contract can invalidate the contract.

If you need a better explanation, please call us today.

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