Common Breach of Contract Remedies in Illinois

Compensatory damages are intended to put the injured party in a financial position that closely reflects where they would have been had you performed your contract duties — for example, if you breached a contract in which you agreed to purchase custom-made goods from the plaintiff (by refusing to accept delivery of such goods), then the court may award compensatory damages that equal the payment the plaintiff would have received had you accepted the delivery of goods.

If you are interested in learning more about how to defend against a breach of contract claim in Illinois, contact an experienced team of Chicago breach of contract attorneys for further assistance.

Restitution damages are intended to put the injured party in a financial position that closely reflects where they would have been had they never even executed the contract in the first place — as such, restitution damages typically cover the costs expended by the plaintiff, not the value received by the defendant (the breaching party). For example, if the plaintiff designs and creates furniture for your business, and you breach the contract and refuse delivery, then restitution damages would be equivalent to the cost expended by the plaintiff (materials and time spent on the furniture creation).

Consequential damages — such as lost profits — compensate for losses that arise as a consequence of the breaching conduct at-issue. For example, if you have breached a contract and the plaintiff can show that they were intending to use the funds to secure a completed order with another client, then you might be liable for the lost profits (due to their failed contract with the second client). In breach of contract disputes where lost profits are not excessively speculative, the court may choose to award such damages.

In some cases, both parties agree to a specified amount of damages that will be paid out in the event of breach — known as liquidated damages. Liquidated damages are intended to reduce the inherent uncertainty of litigation, and to give the contracting parties a clearer idea as to the consequences of breach.

In cases where the contract is void or voidable, and neither party wishes to continue with their obligations under the agreement, it may be rescinded — the contract will be terminated and neither party will be held to the terms of the agreement moving forward.

In other cases, both parties may wish to reform the contract and continue (with slightly modified terms so that the contract is actually valid and enforceable). With the assistance of the court, the contract may be reformed so that the involved parties can continue their mutually beneficial relationship.

When the contract involves the provision of goods or services that are so unique that a sufficient alternative cannot be procured (and where a financial remedy will simply be inadequate), the court may impose a specific performance remedy in which the breaching party is required to complete their obligations under contract.

For example, suppose that you breach a contract to make a painting for the plaintiff. You are known for your one-of-a-kind painting style. The court may decide that a monetary remedy will not be worthy compensation given the circumstances.

It’s important to note, however, that courts tend to be very cautious about awarding specific performance remedies — the remedy involves the imposition of a potentially hostile working relationship, and in general, courts prefer to give parties the freedom to enter and escape contracts.