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Illinois courts have held that fraud consists of anything calculated to deceive, including positive acts, omissions, concealment, breach of legal or equitable duty, and breach of a trust or confidence. Rybak v. Provenzale, 181 Ill.App.3d 884, 899 (2d Dist. 1989). The basic concept of fraud is founded on conduct calculated to deceive. Illinois Jurisprudence, Personal Injury and Torts § 13:01. Fraud has been said to comprise anything calculated to deceive and may consist of a single act, a single suppression of truth, suggestion of falsity, or direct falsehood, innuendo, look, or gesture. Id. A fraudulent misrepresentation may consist of actions, words, or other conduct that constitutes a statement of fact. Id. A representation is fraudulent when, to the knowledge or belief of its utterer, it is false in the sense in which it is intended to be understood by the recipient. Miller v. Lockport Realty Group, Inc., 377 Ill.App.3d 369, 377 (1 Dist. 2007).

Informational Purposes Only: The content of this writing was prepared by Tamari & Blumenthal, LLC for informational purposes only. The content of this writing is not intended to constitute and does not constitute legal advice. Reading the content of this writing or communicating with our office staff or attorneys by telephone, fax or e-mail does not make you a client of Tamari & Blumenthal, LLC. To become a client, you must sign and return our governing engagement agreement. Persons reading the content of this writing should not act upon this information without contacting and speaking with an attorney. Do not issue or provide us with confidential information until an attorney-client relationship has been formally established with our firm.

Litigators, Walid J. Tamari and Grant Blumenthal, are co-chairs of the firm's commercial litigation practice group.

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Posted In: Business Litigation , Fraud

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Generally, Illinois courts require a false representation relating to a matter of fact, rather than opinions, to establish a cause of action for fraud. Illinois Jurisprudence, Personal Injury and Torts § 13:06. Opinions are usually matters of judgment, estimates, and guesses, and a person relies on such at his or her own risk. Id. As a general rule, Illinois law will not support a claim for fraud predicated on an opinion. Schrager v. North Community Bank, 328 Ill.App.3d 696, 704 (1st Dist. 2002).

However, an exception exists where the circumstances suggest that a plaintiff may have justifiably relied on the opinion as though it was a statement of fact. Schrager, 328 Ill.App.3d at 704. A statement that appears to be an opinion when standing alone, may in fact be a statement of fact for purposes of fraud when evaluated in context and in light of all the facts and circumstances of a case. Illinois Jurisprudence, Personal Injury and Torts § 13:06. Illinois courts consider the following factors to help determine whether a statement is one of fact or opinion: the sophistication of the parties; the accessibility of outside information; and whether the speaker has held himself or herself out to have special knowledge. Id.

Wherever a party states a matter which might otherwise be only an opinion, but does not state it as the expression of his own opinion, but as an affirmative fact material to the transaction, the statement clearly becomes an affirmation of the fact within the meaning of the rule against fraud. Schrager, 328 Ill.App.3d at 704. Therefore, the First District Illinois Appellate Court held that the general rule of analyzing whether a statement is one of fact or opinion is that it is the sense in which the statement is reasonably understood, not the form of the statement which is important or controlling. Id. Whether a statement is one of fact or of opinion depends on all the facts and circumstances of a particular case. Illinois Jurisprudence, Personal Injury and Torts § 13:06.

Informational Purposes Only: The content of this writing was prepared by Tamari & Blumenthal, LLC for informational purposes only. The content of this writing is not intended to constitute and does not constitute legal advice. Reading the content of this writing or communicating with our office staff or attorneys by telephone, fax or e-mail does not make you a client of Tamari & Blumenthal, LLC. To become a client, you must sign and return our governing engagement agreement. Persons reading the content of this writing should not act upon this information without contacting and speaking with an attorney. Do not issue or provide us with confidential information until an attorney-client relationship has been formally established with our firm.

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The Illinois First District Appellate Court held that to state a cause of action for false light invasion of privacy, the plaintiff must prove that: (1) the plaintiff was placed in a false light before the public as a result of the defendant's actions; (2) the false light in which the plaintiff was placed would be highly offensive to a reasonable person; and (3) the defendant acted with actual malice, that is, with knowledge that the statements were false or with reckless disregard for whether the statements were true or false. Brennan v. Kadner, 351 Ill.App.3d 963, 971 (1st Dist. 2004).

For purposes of establishing a cause of action for false light invasion of privacy, Illinois courts have adopted the “actual malice ” rule. Dubinsky v. United Airlines Master Executive Council, 303 Ill.App.3d 317, 330 (1st Dist. 1999). Actual malice has been defined by the Illinois Supreme Court as “knowledge that the statements made by a defendant were false or that such statements were made with reckless disregard as to their truth or falsity.” Poulos v. Lutheran Social Services of Illinois, Inc., 312 Ill.App.3d 731, 741 (1st Dist. 2000). To sustain a cause of action for false light invasion of privacy, the plaintiff must prove actual malice by clear and convincing evidence. Illinois Jurisprudence, Personal Injury and Torts § 17:48.

Furthermore, the actual malice requirement is premised on the nature of the false light tort as involving intentional wrongdoing and outrageous conduct. Illinois Jurisprudence, Personal Injury and Torts § 17:48. Thus, in false light invasion of privacy cases, it is not necessary to determine whether the plaintiff is a private or public figure, as is required in some defamation cases, because actual malice must be proven regardless of whether the plaintiff is a private or public figure. Id.

Informational Purposes Only: The content of this writing was prepared by Tamari & Blumenthal, LLC for informational purposes only. The content of this writing is not intended to constitute and does not constitute legal advice. Reading the content of this writing or communicating with our office staff or attorneys by telephone, fax or e-mail does not make you a client of Tamari & Blumenthal, LLC. To become a client, you must sign and return our governing engagement agreement. Persons reading the content of this writing should not act upon this information without contacting and speaking with an attorney. Do not issue or provide us with confidential information until an attorney-client relationship has been formally established with our firm.

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Illinois courts have held that statements concerning future intent or conduct are not actionable as fraud. Illinois Non-Profit Risk Management Ass'n v. Human Service Center of Southern Metro-East, 378 Ill.App.3d 713, 723 (4th Dist. 2008). In most cases, a defendant must make representations about past or existing facts in order to create actionable fraud. Illinois Jurisprudence, Personal Injury and Torts § 13:08. Generally, representations or predictions about intention or future conduct are not actionable as fraud. Id. Illinois courts have held that a promise to do something in the future, generally, will not constitute actionable fraud, even if made with the intention not to perform. Id.

However, there is an exception that exists where Illinois courts have found fraud in future promises. Chatham Surgicore, Ltd. v. Health Care Service Corp., 356 Ill.App.3d 795, 804 (1st Dist. 2005). A promise to perform an act in the future made by one who intends not to perform does not constitute actionable fraud, unless the false promise of future performance is part of a scheme or device to defraud another. Id. In order to comprise fraud, the promise must be part of a scheme to commit fraud, or a fraudulent device. Illinois Jurisprudence, Personal Injury and Torts § 13:08. Illinois courts warn that it is difficult to distinguish between a promise made with an intent not to perform, and one made as part of a pre-existing fraudulent scheme. Id. Proof of the fraud scheme exception to the general rule for future promises requires a statement made with an intent to induce reliance and actual reliance. Id.

Informational Purposes Only: The content of this writing was prepared by Tamari & Blumenthal, LLC for informational purposes only. The content of this writing is not intended to constitute and does not constitute legal advice. Reading the content of this writing or communicating with our office staff or attorneys by telephone, fax or e-mail does not make you a client of Tamari & Blumenthal, LLC. To become a client, you must sign and return our governing engagement agreement. Persons reading the content of this writing should not act upon this information without contacting and speaking with an attorney. Do not issue or provide us with confidential information until an attorney-client relationship has been formally established with our firm.

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Generally, statements as to value do not constitute actionable fraud. Illinois Jurisprudence, Personal Injury and Torts § 13:07. Statements concerning value are ordinarily deemed as an opinion of the party making the representation. Id. While it may be true that a bare statement as to value is ordinarily deemed the opinion of the party making the representation, such a statement may be a positive affirmation of a fact, intended as such by the party making it, and reasonably regarded as such by the party to whom it is made. Id. Therefore, Illinois courts have held that the general rule for statements of value is that where a statement of value is part of a scheme to induce a plaintiff to act, a cause of action for fraud may exist. Id.

In addition, the Illinois First District Appellate Court has held that puffing cannot be the subject of an actionable fraud claim. Miller v. William Chevrolet/GEO, Inc., 326 Ill.App.3d 642, 649 (1st Dist. 2001). Illinois courts have defined “puffing” as a bare statement as to the value of a product. Id. However, statements of existing facts or comments that ascribe specific virtues to a product are not generally considered puffing and may be the subject of a fraud claim. Illinois Jurisprudence, Personal Injury and Torts § 13:07.

Informational Purposes Only: The content of this writing was prepared by Tamari & Blumenthal, LLC for informational purposes only. The content of this writing is not intended to constitute and does not constitute legal advice. Reading the content of this writing or communicating with our office staff or attorneys by telephone, fax or e-mail does not make you a client of Tamari & Blumenthal, LLC. To become a client, you must sign and return our governing engagement agreement. Persons reading the content of this writing should not act upon this information without contacting and speaking with an attorney. Do not issue or provide us with confidential information until an attorney-client relationship has been formally established with our firm.

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The Illinois First District Appellate Court held that negligent misrepresentation involves the breach of a duty to use care in obtaining and communicating information upon which others may reasonably be expected to rely in the conduct of their affairs. Cahill v. Eastern Ben. Systems, Inc., 236 Ill.App.3d 517, 521 (1st Dist. 1992). To sustain a cause of action for negligent misrepresentation, the plaintiff must prove that: (1) a duty existed owed by defendant to plaintiff; (2) a breach of that duty; and (3) an injury proximately resulting from the breach. Id. In addition, to sustain a cause of action for negligent misrepresentation the plaintiff is also required to prove actual reliance. Id. Moreover, negligent misrepresentation claims are generally limited to those in the business of supplying information to others. Illinois Jurisprudence, Personal Injury and Torts § 13:37.

In negligent misrepresentation actions, a plaintiff must prove that the defendant owes a duty to the plaintiff to communicate accurate information. Kopley Group V., L.P. v. Sheridan Edgewater Properties, Ltd., 376 Ill.App.3d 1006, 1017 (1st Dist. 2007). In Illinois, such a duty can be found in two instances where the defendant is in the business of supplying information to others for guidance in business transactions. Illinois Jurisprudence, Personal Injury and Torts § 13:38. Not everyone who furnishes information during the course of business will be considered to be in the business of furnishing information. Id. The information supplied must be for the purpose of guiding the plaintiff's business dealings with third parties. Id.

Furthermore, negligent misrepresentation involves the breach of a duty to use care in obtaining and communicating information upon which others may reasonably be expected to rely in the conduct of their affairs. Illinois Jurisprudence, Personal Injury and Torts § 13:37. The defendant need not know that the statement is false for a negligent misrepresentation claim to exist. Kopley Group V., L.P., 376 Ill.App.3d at 1017. Negligent misrepresentation requires that the defendant’s mental state need only be negligent in ascertaining the truth of the statement. Roe v. Jewish Children's Bureau of Chicago, 339 Ill.App.3d 119, 131 (1st Dist. 2003). A misrepresentation can result from the failure to provide adequate information when there is a duty to provide such information, as well as providing information which is false. Gallagher Corp. v. Russ, 309 Ill.App.3d 192, 201 (1st Dist. 1999).

Informational Purposes Only: The content of this writing was prepared by Tamari & Blumenthal, LLC for informational purposes only. The content of this writing is not intended to constitute and does not constitute legal advice. Reading the content of this writing or communicating with our office staff or attorneys by telephone, fax or e-mail does not make you a client of Tamari & Blumenthal, LLC. To become a client, you must sign and return our governing engagement agreement. Persons reading the content of this writing should not act upon this information without contacting and speaking with an attorney. Do not issue or provide us with confidential information until an attorney-client relationship has been formally established with our firm.

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Posted In: Misrepresentation , Negligent Misrepresentation

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The Illinois First District Appellate Court has held that to state a cause of action for fraud, a plaintiff must prove the following elements: (1) a false statement of material fact; (2) defendant's knowledge that the statement was false; (3) defendant's intent that the statement induce the plaintiff to act; (4) plaintiff's reliance upon the truth of the statement; and (5) plaintiff's damages resulting from reliance on the statement. Fox v. Heimann, 375 Ill.App.3d 35, 47 (1st Dist. 2007). Essential to establishing a cause of action for fraud is intent by the defendant to deceive, to mislead, or to convey a false impression. Szajna v. General Motors Corp., 115 Ill.2d 294, 322 (1986).

The concept of fraud implies a wrongful intent, that is, an act or concealment which is calculated to deceive. Cokinis v. Maywood-Proviso State Bank, 81 Ill.App.3d 1057, 1063-1064 (1st Dist. 1980). The intent to deceive can be found from the fact that a person makes a statement knowing it to be false when the statement is made for the purpose of inducing the one to whom the statement is made to act. Szajna, 115 Ill.2d at 322-323. A statement is fraudulent when, to the knowledge or belief of its utterer, it is false in the sense in which it is intended to be understood by the recipient. Miller v. Lockport Realty Group, Inc., 377 Ill.App.3d 369, 377 (1 Dist. 2007). Also, Illinois courts generally have held that the intent to deceive is present when the statement is made without any belief that it is true or with a reckless disregard as to whether it is true or false. Szajna, 115 Ill.2d at 322-323.

Proof of intent to deceive will be found where a person knowingly makes a false statement for the purpose of inducing another to take action. Illinois Jurisprudence, Personal Injury and Torts § 13:15. The defendant need not have had a specific intent to cause a pecuniary loss in order to commit fraud. Id. The relevant issue is simply whether the defendant intended to induce reliance on the misrepresentation. Id.

Informational Purposes Only: The content of this writing was prepared by Tamari & Blumenthal, LLC for informational purposes only. The content of this writing is not intended to constitute and does not constitute legal advice. Reading the content of this writing or communicating with our office staff or attorneys by telephone, fax or e-mail does not make you a client of Tamari & Blumenthal, LLC. To become a client, you must sign and return our governing engagement agreement. Persons reading the content of this writing should not act upon this information without contacting and speaking with an attorney. Do not issue or provide us with confidential information until an attorney-client relationship has been formally established with our firm.

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The Illinois First District Appellate Court has defined “constructive fraud” as any act, statement or omission which amounts to positive fraud or which is construed as fraud by the courts because of its detrimental effect upon public interests and public or private confidence. Small v. Sussman, 306 Ill.App.3d 639, 646 (1st Dist. 1999). Essentially, constructive fraud is a breach of a legal or an equitable duty which, irrespective of the moral guilt of the wrongdoer, Illinois courts declare as fraudulent because of its tendency to deceive others. Prodromos v. Everen Securities, Inc., 341 Ill.App.3d 718, 726 (1st Dist. 2003). A cause of action for constructive fraud requires neither actual dishonesty, nor intent to deceive. Cessna v. City of Danville, 296 Ill.App.3d 156, 168 (4th Dist. 1998). On the other hand, a cause of action for constructive fraud can be inferred from the circumstances regardless of any actual dishonesty of purpose. Id.

Constructive fraud can arise only if there is a confidential or fiduciary relationship between the parties. Prodromos, 341 Ill.App.3d at 726. In Illinois, a fiduciary relationship arises when one has influence over a person through the trust and confidence of that person, such as where a person solicits trust by holding himself or herself out as an expert. Illinois Jurisprudence, Personal Injury and Torts § 13:02. In a fiduciary relationship, where there is a breach of a legal or equitable duty, a presumption of fraud arises. Id. Where there has been a breach of a fiduciary duty, a cause of action can lie in constructive fraud. Id.

Once the party claiming constructive fraud has established the existence and breach of a confidential or fiduciary relationship between the parties, the burden of proof shifts to the opposing party to produce evidence to negate the existence and breach of a confidential or fiduciary relationship. Illinois Jurisprudence, Personal Injury and Torts § 13:36. If the opposing party is successful in negating the existence and breach of a confidential or fiduciary relationship, the cause of action for constructive fraud ceases to exist and the party claiming constructive fraud has the burden of proving fraud. Id.

Informational Purposes Only: The content of this writing was prepared by Tamari & Blumenthal, LLC for informational purposes only. The content of this writing is not intended to constitute and does not constitute legal advice. Reading the content of this writing or communicating with our office staff or attorneys by telephone, fax or e-mail does not make you a client of Tamari & Blumenthal, LLC. To become a client, you must sign and return our governing engagement agreement. Persons reading the content of this writing should not act upon this information without contacting and speaking with an attorney. Do not issue or provide us with confidential information until an attorney-client relationship has been formally established with our firm.

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Under the Illinois Deceptive Trade Practices Act, “a person engages in a deceptive trade practice when, in the course of his or her business, vocation, or occupation, the person disparages the goods, services, or business of another by false or misleading representation of fact.” 815 ILCS 510/2.

A claim for commercial disparagement under the Illinois Deceptive Trade Practices Act may be stated where the plaintiff alleges that the defendant knowingly and intentionally made false or misleading statements to one or more actual or potential customers of the plaintiff. Illinois Jurisprudence, Commercial Law § 21:6. In addition, to prove a cause of action for commercial disparagement, under the Illinois Deceptive Trade Practices Act, a plaintiff must prove that: (1) the defendant intends for the publication of the statement to result in harm to the interests of the plaintiff having a pecuniary value, or either recognizes or should have recognized that it is likely to do so; and (2) the defendant knows the statement is false or acts in reckless disregard of its truth or falsity. Illinois Jurisprudence, Personal Injury and Torts § 11:82. Statements that may satisfy the requirement of false or misleading statements may be made to the effect that the plaintiff's products were unsatisfactorily made, unsafe, ineffective, and poorly designed; or that the plaintiff would not be able to perform in accordance with prior assurances of promised delivery schedules or other critical service-related concerns of customers. Illinois Jurisprudence, Commercial Law § 21:6.

Informational Purposes Only: The content of this writing was prepared by Tamari & Blumenthal, LLC for informational purposes only. The content of this writing is not intended to constitute and does not constitute legal advice. Reading the content of this writing or communicating with our office staff or attorneys by telephone, fax or e-mail does not make you a client of Tamari & Blumenthal, LLC. To become a client, you must sign and return our governing engagement agreement. Persons reading the content of this writing should not act upon this information without contacting and speaking with an attorney. Do not issue or provide us with confidential information until an attorney-client relationship has been formally established with our firm.

About Tamari & Blumenthal, LLC: Tamari & Blumenthal, LLC is a Chicago-based business litigation and business law firm. The law firm represents clients in a broad range of business disputes. Attorneys Walid J. Tamari and Grant Blumenthal are the law firm’s co-managing partners.

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Posted In: Business Litigation , Commercial Disparagement , Defamation , Illinois Deceptive Trade Practices Act

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The First District Illinois Appellate Court has held that to state a cause of action for the common law tort of commercial disparagement, a plaintiff must prove that the defendant made a false and demeaning statement regarding the quality of plaintiff's goods and services. Schivarelli v. CBS, Inc., 333 Ill.App.3d 755, 766 (1st Dist. 2002). Moreover, an Illinois appellate court defined an action for common law commercial disparagement as “a statement about a competitor's goods or services which are untrue or misleading and are made to influence or tend to influence the public not to buy those goods or services.” Pekin Ins. Co. v. Phelan, 343 Ill. App. 3d 1216, 1220 (3d Dist. 2003).

Although commercial disparagement is similar to defamation of personal reputation in that both require a false statement to a third party which causes harm to the plaintiff, Illinois courts have recognized commercial disparagement as a tort separate and distinct from the tort of defamation. Imperial Apparel, LTD v. Cosmo's Designer Direct, Inc., 367 Ill.App.3d 48, 60 (1st Dist. 2006); 1-10 Illinois Tort Law § 10.02. A defamation action may lie when there is a false statement regarding the integrity of a business. Id. Whereas, an action for commercial disparagement lies when there is a false statement that demeans the quality of a business’ goods or services. Id. Moreover, defamation protects a personal interest in reputation, where as, commercial disparagement protects a property interest. 1-10 Illinois Tort Law § 10.02. In order to have a cause of action for commercial disparagement, the false statement that is the basis of the action must be directed at the products and services of a business rival. Illinois Jurisprudence, Commercial Law § 21:6. However, Illinois courts have found that “when a statement impugn the quality of goods and the integrity of a business, both an action for defamation and an action for commercial disparagement may lie.” Imperial Apparel, LTD, 367 Ill.App.3d at 60.

Commercial disparagement has consistently been applied to statements which disparage the quality of one's goods or services. Crinkley v. Dow Jones and Co., 67 Ill.App.3d 869, 876 (1st Dist. 1978). Common law commercial disparagement, which is a defamation of the quality of one's goods or services, requires proof that the statement be false. Soderlund Bros., Inc. v. Carrier Corp., 278 Ill.App.3d 606, 619-620 (1st Dist. 1995). In addition, commercial disparagement actions require a showing of malice and that defendant knew the statement to be false or acted in reckless disregard of its truth or falsity. Id. Furthermore, the plaintiff must allege some identified or identifiable third party which the disparaging statement was communicated to by the defendant, with whom the plaintiff had an expectancy of doing business. Suhadolnik v. City of Springfield, 184 Ill.App.3d 155, 184 (4th Dist. 1989).

Informational Purposes Only: The content of this writing was prepared by Tamari & Blumenthal, LLC for informational purposes only. The content of this writing is not intended to constitute and does not constitute legal advice. Reading the content of this writing or communicating with our office staff or attorneys by telephone, fax or e-mail does not make you a client of Tamari & Blumenthal, LLC. To become a client, you must sign and return our governing engagement agreement. Persons reading the content of this writing should not act upon this information without contacting and speaking with an attorney. Do not issue or provide us with confidential information until an attorney-client relationship has been formally established with our firm.

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Tortious interference with a contract recognizes that a person's business relationships constitute a property interest, and as such are entitled to protection from unjustified tampering by another. The Film and Tape Works, Inc. v. Junetwenty Films, Inc., 368 Ill.App.3d 462, 468 (1st Dist. 2006). The Illinois First District Appellate Court held in order to state a cause of action for tortious interference with a contract, the plaintiff must allege: (1) the existence of a valid and enforceable contract between the plaintiff and a third party; (2) defendant's awareness of the contract; (3) defendant's intentional and unjustified inducement of a breach; (4) defendant's wrongful conduct caused a subsequent breach of the contract by the third party; and (5) damages. Purmal v. Robert N. Wadington and Associates, 354 Ill.App.3d 715, 727 (1st Dist. 2004).

The first element for the tort of interference with contractual rights requires the existence of a valid and enforceable contract between the plaintiff and another. Illinois Jurisprudence, Personal Injury and Torts § 14:04. The general rule that a person cannot sue for interference with a contract that is unenforceable has been applied only to contracts that are void from their inception due to their subject matter or the lack of the necessary formation requisites. Id. Furthermore, a cause of action for tortuous interference with a contract does not exist where a party seeking to bring the claim is, in fact, a party of the contractual relationship, which the claim is based upon. Cress v. Recreation Services, Inc., 341 Ill.App.3d 149, 176 (2d Dist. 2003).

The second element for the tort of interference with a contract requires the defendant to have knowledge of the contract. Purmal, 354 Ill.App.3d at 727. For purposes of pleading a cause of action for interference with contract, the plaintiff need only allege the defendant's knowledge of the contract. Guice v. Sentinel Technologies, Inc., 294 Ill.App.3d 97, 110 (1st Dist. 1997). “The exact date upon which knowledge of the existence of a contract was acquired by the defendant is irrelevant, provided that the acquisition of such knowledge preceded the alleged conduct of interference.” Guice v. Sentinel Technologies, Inc., 294 Ill.App.3d 97, 110 (1st Dist. 1997).

The third element for a cause of action of interference with a contract requires the plaintiff to establish that the defendant intentionally and unjustifiably induced the third party to breach the contract. Illinois Bell Telephone Co. v. Plote, Inc., 334 Ill.App.3d 796, 806 (1st Dist. 2002). The element of intentional and unjustified inducement of a breach of the contract requires the intentional and malicious inducement of the third person to breach the contract. Illinois Jurisprudence, Personal Injury and Torts § 14:05. “The test for inducement requires an intention on the part of the actor to interfere with another's contractual relations. To do so, he or she must know of the existence of the contract with which he or she interferes. Establishing inducement requires some active persuasion, encouragement, or inciting that goes beyond merely providing information in a passive way.” Id.

The fourth element for a cause of action of interference with a contract requires that the defendant's wrongful conduct caused a subsequent breach of the contract by the third party. Purmal, 354 Ill.App.3d at 727. The breach element requires either a breach of contract, a termination of contractual relations, or a rendering performance impossible. Illinois Jurisprudence, Personal Injury and Torts § 14:06. There need not be a termination or breach of the contract before a cause of action for interference with a contract exists. Id. The plaintiff must show that the contract was in fact breached or that a breach is imminent. Id.

Informational Purposes Only: The content of this writing was prepared by Tamari & Blumenthal, LLC for informational purposes only. The content of this writing is not intended to constitute and does not constitute legal advice. Reading the content of this writing or communicating with our office staff or attorneys by telephone, fax or e-mail does not make you a client of Tamari & Blumenthal, LLC. To become a client, you must sign and return our governing engagement agreement. Persons reading the content of this writing should not act upon this information without contacting and speaking with an attorney. Do not issue or provide us with confidential information until an attorney-client relationship has been formally established with our firm.

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Posted In: Business Litigation , Tortious Interference , Tortious Interference with Contract

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An adhesion contract is a standardized form agreement prepared entirely by one of the parties and submitted to another party for acceptance without any opportunity to negotiate terms. Endsley v. City of Chicago, 319 Ill.App.3d 1009, 1019 (1st Dist. 2001). Further, a contract of adhesion is a contract that is offered on a take-it-or-leave-it basis to a party who has no bargaining power and no ability to change the terms of the contract. Wigginton v. Dell, Inc., 890 N.E.2d 541, 546 (5th Dist. 2008). Therefore, a contract of adhesion exists where one party has absolutely no bargaining power or ability to change the contract terms. Hubbert v. Dell Corp., 359 Ill.App.3d 976, 987 (5th Dist. 2005).

Where there is disparity in bargaining power, the drafter may essentially require the other party, or "adherer," to accept or reject the form contract on a "take it or leave it" basis. Illinois Jurisprudence, Commercial Law § 1:4. Whether a contract is one of adhesion is itself a question of fact. Id. Burdensome clauses in adhesion contracts generally should be construed against the drafter of the contract.

Illinois courts have held that contracts of adhesion are generally lawful and "mere disparity of bargaining power is not sufficient grounds to vitiate contractual obligations.” Endsley v. City of Chicago, 319 Ill.App.3d 1009, 1019 (1st Dist. 2001). To vitiate a contractual obligation under an adhesion contract, something more than mere disparity in bargaining power is required. Illinois Jurisprudence, Commercial Law § 1:4. To determine whether a contract of adhesion is enforceable, Illinois courts look to two factors: the reasonable expectations of the adhering party and whether the contract is unconscionable. Hutcherson v. Sears Roebuck & Co., 342 Ill.App.3d 109, 120 (1st Dist. 2003). Thus, Illinois courts may declare adhesion contracts unlawful where the party in the superior bargaining position has taken unfair advantage of the adherer by making the desired product or service available only if the weaker party accedes to the form of the contract. Illinois Jurisprudence, Commercial Law § 1:4. Therefore, unfair advantage is the key to differentiating between lawful and unlawful adhesion contracts. Id.

Contracts of adhesion, typified by terms that are nonnegotiable and presented in fine print in language that the average consumer might not fully understand are not per se unenforceable from a procedural standpoint. Tortoriello v. Gerald Nissan of N. Aurora, Inc., 379 Ill.App.3d 214, 233 (2d Dist. 2008). Some additional coercion or overreaching is necessary. Id. The Illinois First District Appellate Court held that when contracts of adhesion are in a standardized form agreement and are submitted to a party for acceptance without any opportunity to negotiate the terms, the mere fact that one party to a contract enjoyed little relative bargaining strength cannot alone render a contractual provision unenforceable. Larned v First Chicago Corp., 264 Ill.App.3d 697 (1st Dist. 1994). However, a contractual clause that is part of a standardized form agreement may have some of its significance reduced because of the inequality in the parties' bargaining power. Williams v. Illinois State Scholarship Commission, 139 Ill.2d 24, 72 (1990).

Informational Purposes Only: The content of this writing was prepared by Tamari & Blumenthal, LLC for informational purposes only. The content of this writing is not intended to constitute and does not constitute legal advice. Reading the content of this writing or communicating with our office staff or attorneys by telephone, fax or e-mail does not make you a client of Tamari & Blumenthal, LLC. To become a client, you must sign and return our governing engagement agreement. Persons reading the content of this writing should not act upon this information without contacting and speaking with an attorney. Do not issue or provide us with confidential information until an attorney-client relationship has been formally established with our firm.

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Posted In: Business Litigation , Contract Formation

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