Page 8 - John Hundley 2018

the parties had done business) “was a more comprehensive document” than the separation
agreement and that therefore promises in the former were not barred by the latter.

Court Enforces Liquidated Damages Clause

The present value of future lost rent is an appropriate measure of a commercial lessor’s damages
upon the tenant’s breach, though there may be a set-off under the landlord’s duty to mitigate.

So held a panel of the Appellate Court in Chicago recently. 1550 MP Road, LLC v. Teamsters
Local Union No. 700, 2017 IL App (1st) 153300.

In 1550, the court dealt with a lease term which gave the landlord the right upon tenant’s breach
to “a sum of money equal to the value of the Rent provided to be paid by Tenant for the balance of
the Term.” The successor to the tenant (upon which liability was imposed under successor liability
principles) contended that the clause imposed an unenforceable penalty.

The court noted that three elements must be present for a liquidated damages clause to be
enforceable: “(1) the parties intended to agree in advance to the settlement of damages that might
arise from the breach; (2) the amount of liquidated damages was reasonable at the time of
contracting, bearing some relation to the damages which might be sustained; and (3) actual damages
would be uncertain in amount and difficult to prove.”

Finding those tests met, the panel enforced the liquidated damages formula.

Existence Of Contract Defeats Quantum Meruit Claim

In determining whether a plaintiff may recover in quantum meruit, it doesn’t matter so much
whether the plaintiff is seeking to recover on a contract as whether the contract exists and covers the
items for which plaintiff seeks recovery under a quantum meruit basis.

That’s the message of a recent decision in the Appellate Court in Chicago. Ruling in Archon
Constr. Co. v. U.S. Shelter, L.L.C., 2017 IL App (1st) 153409, the court said that “[i]f the work for
which a plaintiff seeks remuneration under a quantum meruit theory concerned the same subject
matter of the express contract, then the quantum meruit claim is barred as a matter of law.”

In Archon, plaintiff had first sought recovery for certain work as “extras” under a construction
contract, but then dismissed the contract claim and sought recovery only in quantum meruit.
However, the contract existed and had terms covering the work at issue, and that, the court said,
doomed the quantum meruit claim.

Quantum meruit means “as much as he deserves” and often is pleaded as an alternative to a
contract count. Archon teaches that such pleading must be undertaken with care, lest matter
introduced on an unsuccessful contract claim be fatal to the quantum meruit count as well.

Brenda\SharpThinking\#149.pdf

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