Breach of contracts--written or oral (and, often, both) is a common, every day commercial / business issue that nearly any type of business--and individuals--face. Simply put, several elements are necessary to establish / form a contract whether it is oral or written:
1. An offer;
2. An acceptance of the offer; and
3. "Consideration" (that is, usually money or something in exchange to support the offer and acceptance).
Certain contracts are required to be in writing or they will be unenforceable as a matter of law under what is known as the "Statute of Frauds." Such contracts that must be in writing are contracts involving marriage, a contract that cannot be performed within a year, contracts involving real estate, certain agreements under the Uniform Commercial Code for the sale of goods and a few others.
Often, contracts then contain simple, complex, many or few terms and conditions of what each party expects of the other. Thereafter, problems may arise when one of the parties fails to live up to his/her/its "end of the bargain" and thereby causes what is called "a breach."
The party that is affected by the breach will usually try to "work it out" if possible but, if not possible, the only option is usually to bring a lawsuit to recover for damages from the breach or to force the breaching party to perform, among other potential remedies at law and/or in equity.
To succeed on a breach of contract theory, “the plaintiffs carry the burden to prove all elements of a contract…” Johnson v. Johnson, 244 Ill.App.3d 518, 527 (1st Dist. 1993). To succeed on a breach of contract claim, a plaintiff must also establish “an offer and acceptance, consideration, the terms of the contract, plaintiff’s performance of all contractual conditions required of him, the defendant’s breach of the terms of the contract and damages resulting from the breach.” Vandevier v. Mulay Plastics, Inc., 135 Ill.App.3d 787, 791 (1st Dist. 1985).
Mutual assent by the parties to the terms of an agreement is an essential element for the formation of a contract. Lal v. Naffa, 1490 Ill.App.3d 245, 248 (1st Dist. 1986). Plaintiff shoulders the burden of proving every material term of the contract. Vandevier at 791.
"Where it appears that the language used or the terms proposed are understood differently by the parties, there is no meeting of the minds and no contract exists between the parties." Id.
In order to form an enforceable oral contract “the parties must have entered into an agreement which is sufficiently definite and certain so that the terms are either determined or may be implied.” Kraftco Corp. v. Kolbus, 1 Ill.App.3d 653, 638 (4th Dist. 1971). When the allegations of a party “merely set forth utterances of an informal character, to attach to them the binding effect of a contractual commitment would be improper.” Id. To be enforceable, a contract must show a manifestation of agreement between the parties and be definite and certain in its terms. Wagner Excello Foods, Inc. v Fearn International, Inc., 235 Ill.App.3d 224, 229 (1st Dist. 1992). Further, the Plaintiff must establish and prove that it has performed all conditions on its part to be performed. Thilman & Company v. Angelo Esposito, 87 Ill.App.3d 289, 296 (1st Dist. 1980). Finally, as to any alleged oral contract, courts have explicitly set the standard and even reference the Restatement of Contracts:
The terms of a contract must be reasonably certain. Some terms may be missing or left to be agreed upon, but if the essential term or terms are so uncertain that there is no basis for deciding whether the agreement has been kept or broken, there is no contract. Restatement (Second) of Contracts § 33 (1981) . . . The party claiming such [an oral] contract must show that the alleged agreement contains sufficient definitiveness to be enforceable.
Champaign Nat'l Bank v. Landers Seed Co., 165 Ill.App.3d 1090, 1093-94 (4th Dist. 1988) (emphasis added); see also Trittipo v. O'Brien, 204 Ill.App.3d 662, 672 (1st Dist. 1990).
We have sued and defended numerous breach of contract actions--and successfully. If you believe a party to a contract--written or oral--has breached it or "not lived up to the bargain," call us for a free consultation to discuss if we can help you. We would be honored to discuss the situation with you and determine if we can be of assistance. Contact us here.