Chicago Business Litigation Attorney Blog

Illinois courts have defined a contract “modification” as a change in one or more respects which introduces new elements into the details of the contract, or cancels some of them, but leaves the general purpose and effect undisturbed. Schwinder v. Austin Bank of Chicago, 348 Ill.App.3d 461, 468 (1st Dist. 2004). Modification of a contract normally occurs when the parties agree to modify a contractual provision or to include additional obligations, while leaving intact the overall nature and obligations of the original agreement. Id. Parties to an existing contract may, by mutual assent, modify the purchase contract provided that the modification does not violate law or public policy. Id. Further, parties to a contract are ordinarily as free to change the agreement after making it as they were to make it in the first instance. Id.

In deciding whether to give effect to an attempted contract modification, the analysis does not depend on the nature of the contractual provision at issue. Kinkel v. Cingular Wireless LLC, 223 Ill.2d 1, 14-15 (2006). The First District Illinois Appellate Court has held that a valid modification of a contract must satisfy all the criteria essential for a valid original contract, including offer, acceptance, and consideration. Id. Modification of a contract is itself a contract and only enforceable where ordinary standards of contract law are satisfied. Id. Because, no contract can be modified in ex parte fashion (after the original contract is formed) by one of the contracting parties without the knowledge and consent of the remaining parties to the agreement, mutual assent is therefore, as much a requisite element in effecting a contractual modification as it is in the initial creation of a contract. Id. at 469.

In addition, Illinois courts have held that contractual terms may be modified as long as there is consideration for modification, which may be manifested with some bargained-for exchange between parties. Advance Iron Works, Inc. v. ECD Lincolnshire Theater, LLC, 339 Ill.App.3d 882, 887 (2d Dist. 2003). The essential element of consideration is a bargained-for exchange of promises or performances that may consist of a promise, an act, forbearance, or the creation, modification, or destruction of a legal relation. Ross v. May Co., 377 Ill.App.3d 387, 391 (1st Dist. 2007). A bargained-for exchange exists if one party's promise induces the other party's promise or performance. Id. A performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise.” Id.

A modified contract containing a term inconsistent with a term of the original contract or an earlier contract between the same parties may be interpreted as including an agreement to rescind the inconsistent term in the original or earlier contract. Schwinder, 348 Ill.App.3d at 469. Thus, the modified contract is regarded as creating a new single contract consisting of the terms of the prior contract that the parties have not agreed to change, in addition to the new terms on which they have agreed to change. Id. Furthermore, when a contract is modified or amended by a subsequent agreement, any lawsuit to enforce the contract must be brought on the modified agreement and not on the original agreement. 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.

The First District Illinois Appellate Court held that the tort of interference with prospective economic advantage 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 (1st Dist. 2006). Illinois courts have held to plead a cause of action for tortious interference with prospective economic advantage, a plaintiff must prove: (1) the existence of a valid business relationship or plaintiff's reasonable expectancy of entering into a valid business relationship; (2) defendant's knowledge of the relationship or defendant’s knowledge of the plaintiff’s expectancy to enter into a valid business relationship; (3) intentional interference by defendant inducing termination of the relationship or preventing the expectancy from ripening into a valid business relationship; and (4) damage to plaintiff as a result of the interference. Illinois Jurisprudence, Personal Injury and Torts § 14:12.

In order to allege a reasonable business expectancy, a plaintiff must plead facts to show interference of a business relationship with a specific third party or an identifiable prospective class of third persons. Illinois Jurisprudence, Personal Injury and Torts § 14:13. If the interference is of an incidental nature, rather than an intentional nature, a claim for tortious interference with prospective economic advantage will fail. Illinois Jurisprudence, Personal Injury and Torts § 14:12. Interference with prospective economic advantages requires action toward a third party that results in interference with the prospective relationship. Illinois Jurisprudence, Personal Injury and Torts § 14:13.

Furthermore, interference with prospective economic advantage implies a balancing of societal values, where an individual has a general duty not to interfere in the business affairs of another. The Film and Tape Works, Inc. v. Junetwenty Films, Inc., 368 Ill.App.3d 462 (1st Dist. 2006). However, he may be privileged to interfere, depending on his purpose and methods, when the interference takes a socially sanctioned form, such as lawful competition. The Film and Tape Works, Inc. v. Junetwenty Films, Inc., 368 Ill.App.3d 462 (1st Dist. 2006). In addition, when a business relationship affords the parties no enforceable expectations, but only the hope of continued benefits, the parties must allow for the rights of others, and they therefore have no cause of action against a competitor unless the circumstances indicate unfair competition or an unprivileged interference with prospective advantage. The Film and Tape Works, Inc. v. Junetwenty Films, Inc., 368 Ill.App.3d 462 (1st Dist. 2006). The opportunity to obtain customers is an expectancy protected by the tort of interference with a business expectancy. Illinois Jurisprudence, Personal Injury and Torts § 14:12.

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.

Illinois courts have defined the tort of “conversion” as any unauthorized act that deprives a person of his or her property permanently or for an indefinite time. Illinois Jurisprudence, Personal Injury and Torts § 10:01. The essence of a cause of action for conversion is the wrongful deprivation of one who has a right to the immediate possession of the object unlawfully held, or the wrongful deprivation of property from the person entitled to possession. Id. The Illinois Supreme Court held to establish a cause of action for conversion, a plaintiff must prove by a preponderance of the evidence that: (1) the plaintiff has a right to the property; (2) the plaintiff has an absolute and unconditional right to the immediate possession of the property; (3) the plaintiff made a demand for possession; and (4) the defendant wrongfully and without authorization assumed control, dominion, or ownership over the property. Cirrincione v. Johnson, 184 Ill.2d 109, 114 (1998).

The plaintiff must show a right to the property, and an absolute and unconditional right to immediate possession of the property; thus, plaintiff must prove his immediate right of possession as against the defendant. Illinois Jurisprudence, Personal Injury and Torts § 10:08. The third element of a cause of action for conversion requires the plaintiff to make a demand for possession of the property. Cirrincione v. Johnson, 184 Ill.2d 109, 114 (1998). However, Illinois courts are split on whether demand for possession is a requirement to prove conversion. Illinois Jurisprudence, Personal Injury and Torts § 10:09. Illinois courts have held that demand is necessary in all cases in which the defendant is in possession of the property. Id. On the other hand, where some other independent act of conversion can be proven, Illinois courts have held that there is no necessity for a demand by the person claiming ownership or right to possession in order to prove a cause of action for conversion. Id. The First District Illinois Appellate Court stated, “Although demand is often cited as an element of a conversion action, demand is unnecessary where another independent action of conversion is established.” Fortech, L.L.C. v. R.W. Dunteman Co., Inc., 366 Ill.App.3d 804 (1st Dist. 2006). In addition, to satisfy the fourth element of conversion, Illinois courts require that the plaintiff proves that the defendant exercised control over the chattel in a manner inconsistent with the plaintiff's right of possession. Illinois Jurisprudence, Personal Injury and Torts § 10:07. Moreover, there can be no wrongful assertion of dominion or control where the property is voluntarily transferred to the defendant by the plaintiff, even if the transfer was done by mistake. Illinois Jurisprudence, Personal Injury and Torts § 10:10.

The Illinois Supreme Court held that “the subject of conversion is required to be an identifiable object of property of which the plaintiff was wrongfully deprived.” The Film and Tape Works, Inc. v. Junetwenty Films, Inc., 368 Ill.App.3d 462, (1st Dist. 2006); (see In re Thebus, 108 Ill.2d 255, 260 (1985)). However, intangible property rights can be the subject of conversion if they are merged into a tangible document over which the alleged defendant exercised dominion or ownership. The Film and Tape Works, Inc. v. Junetwenty Films, Inc., 368 Ill.App.3d 462, (1st Dist. 2006). Illinois courts have recognized a cause of action for conversion of commercial paper, such as a check, on the theory that the intangible property right was merged into a specific document. Illinois Jurisprudence, Personal Injury and Torts § 10:13. Other types of intangible property that Illinois courts have recognized as merging into a specific document to satisfy the property requirement for conversion are valuable papers, or evidences of title to real or personal property for checks, promissory notes, bank bills, bonds, bills of exchange, drafts, certificates of stock in incorporated companies, securities of any kind, books of account, vouchers, and the like. Id.

Moreover, money may be the subject of conversion, but it must be capable of being described as a specific chattel, although it is not necessary for purposes of identification that money should be specifically earmarked. The Film and Tape Works, Inc. v. Junetwenty Films, Inc., 368 Ill.App.3d 462, (1st Dist. 2006); (see In re Thebus, 108 Ill.2d 255, 260 (1985)); and Illinois Jurisprudence, Personal Injury and Torts § 10:12. Money can be the subject of a claim for conversion provided that it can be described, identified or segregated, and an obligation to treat it in a specific manner is established. Illinois Jurisprudence, Personal Injury and Torts § 10:12. The general rule is that conversion will lie when the plaintiff proves that the money claimed, or its equivalent, at all times belonged to plaintiff and that the defendant converted it to his or her own use. Id. A plaintiff must generally show that he had a right to a specific fund or specific money in coin or bills. Id. Where money withheld to fulfill a debt is specific and identifiable, a conversion claim based on a debt is actionable. Id. However, conversion will not lie for money represented by a general debt or obligation. 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.