Page 32 - John Hundley 2014

The clause in Saba permitted venue to be placed in any Illinois court, and the plaintiff chose Cook
County. Deere then sought transfer to Rock Island County, where its headquarters are located.

Noting that the venue provisions of the Code of Civil Procedure may be waived, the court said that
“[w]hen a party places [a venue clause] in a contract and the other party agrees, fundamental fairness
requires that the party who placed it in the contract cannot later complain that the clause is void as against
public policy,” absent prejudice to others’ due process rights.

Burden High When Contract Gives Party Interpretation Power

When a contract gives one party the discretion to interpret its terms, the other party can establish a
breach of contract only by alleging and showing that the first party’s
interpretation is unreasonable, the Seventh U.S. Court of Appeals has ruled.

Applying Illinois law to a challenge to United Air Lines’ administration of its
Mileage Plus Program, the court said that when the contract confers such
discretion it is not enough to allege that a contract term is ambiguous and that
the objector’s interpretation is supported by extrinsic evidence. Hongbo Han v.
United Continental Holdings, Inc., 762 F.3d 598 (7th Cir. 2014).

Retaining Payment Was Ratification Of Dubious Release

Even if a general release was initially unenforceable under the doctrine relating to unanticipated
claims, a party’s retention of the payment made under that release “independently ratified that release”
and barred him from later suing on claims allegedly excluded under the unanticipated claims doctrine, a
panel in the Appellate Court in Chicago has ruled.

In Rohr Burg Motors, Inc. v. Kulbarsh, 2014 IL App (1st) 131664, a
disgruntled vehicle purchaser accepted a full refund payment but claimed
that the general release given to receive that payment did not cover his
claims of fraud and misrepresentation because the vehicle had been
damaged in an accident prior to purchase. Interpreting the release as a
matter of contract law, the court rejected that argument, but held that even
if those claims were not anticipated when the release was signed, they
were barred by the doctrine of ratification because the buyer kept the refunded price after learning of the
claims.

“[E]ven if we concluded that the release was voidable, we would find that Kulbarsh ratified the release
by his retention of the consideration for his promise not to sue,” the court said.

In addition, the court said the dealer could sue upon the release. In addition to attempting to press
the fraud and misrepresentation claims, the buyer had refused to return the vehicle after receiving the
refund payment.

-John T. Hundley, Jhundley@lotsharp.com, 618-242-0246

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