Opinion ID: 624826
Heading Depth: 3
Heading Rank: 3

Heading: Definite and Certain Terms

Text: A contract is enforceable under Illinois law if from its plain terms it is ascertainable what each party has agreed to do. Academy Chicago Publishers v. Cheever, 144 Ill.2d 24, 161 Ill.Dec. 335, 578 N.E.2d 981, 983 (1991). A contract may be enforced even though some contract terms may be missing or left to be agreed upon, but if the essential terms are so uncertain that there is no basis for deciding whether the agreement has been kept or broken, there is no contract. Id., 161 Ill.Dec. 335, 578 N.E.2d at 984. Wells Fargo contends that the TPP is unenforceable because it did not specify the exact terms of the permanent loan modification, including the interest rate, the principal balance, loan duration, and the total monthly payment. [7] Because the TPP allowed the lender to determine the precise contours of the permanent modification at a later date, Wells Fargo argues, it reflected no meeting of the minds as to the permanent modification's essential terms, so that it was an unenforceable agreement to agree. It is true that Wigod's trial period terms were an estimate of the terms of the permanent modification and that Wells Fargo had some limited discretion to modify permanent terms based on its determination of the final amounts of unpaid interest and other delinquent amounts. TPP §§ 2, 3. But this hardly makes the TPP a mere agreement to agree. This court, applying Illinois law, has explained that a contract with open terms can be enforced: In order for such a contract to be enforceable, however, it is necessary that the terms to be agreed upon in the future can be determined independent of a party's mere `wish, will, and desire'..., either by virtue of the agreement itself or by commercial practice or other usage or custom. United States v. Orr Construction Co., 560 F.2d 765, 769 (7th Cir.1977), quoting 1 Arthur Linton Corbin, Corbin on Contracts § 95, at 402 (1960 ed.) (hereinafter  Corbin on Contracts (1960 ed.)) (internal quotation marks omitted). Professor Corbin's treatise continues: This may be the case, even though the determination is left to one of the contracting parties, if he is required to make it `in good faith' in accordance with some existing standard or with facts capable of objective proof. 1 Corbin on Contracts § 95, at 402 (1960 ed.). In this case, HAMP guidelines provided precisely this existing standard by which the ultimate terms of Wigod's permanent modification were to be set. When one party to a contract has discretion to set open terms in a contract, that party must do so reasonably and not arbitrarily or in a manner inconsistent with the reasonable expectations of the parties. Cromeens, Holloman, Sibert, Inc. v. AB Volvo, 349 F.3d 376, 395 (7th Cir.2003) (applying Illinois law). In its program directives, the Department of the Treasury set forth the exact mechanisms for determining borrower eligibility and for calculating modification termsnamely, the waterfall method and the NPV test. These HAMP guidelines unquestionably informed the reasonable expectations of the parties to Wigod's TPP Agreement, which is actually entitled  Home Affordable Modification Program Loan Trial Period. In Wigod's reasonable reading of the agreement, if she qualif[ied] for the Offer (meaning, of course, that she qualified under HAMP) and complied with the terms of the TPP, Wells Fargo would offer her a permanent modification. TPP ¶ 2. To calculate Wigod's trial modification terms, Wells Fargo was obligated to use the NPV test and the waterfall method to try to bring her monthly payments down to 31 percent of her gross income. Although the trial terms were just an estimate of the permanent modification terms, the TPP fairly implied that any deviation from them in the permanent offer would also be based on Wells Fargo's application of the established HAMP criteria and formulas. Wells Fargo, of course, has not offered Wigod any permanent modification, let alone one that is consistent with HAMP program guidelines. Thus, even without reference to the HAMP modification rules, Wigod's complaint alleges that Wells Fargo breached its promise to provide her with a permanent modification once she fulfilled the TPP's conditions. Although Wells Fargo may have had some limited discretion to set the precise terms of an offered permanent modification, it was certainly required to offer some sort of good-faith permanent modification to Wigod consistent with HAMP guidelines. It has offered none. See Corbin on Contracts § 4.1, at 532 (rev. ed.) (Where the parties intend to contract but defer agreement on certain essential terms until later, the gap can be cured if one of the parties offers to accept any reasonable proposal that the other may make. The other's failure to make any proposal is a clear indication that the missing term is not the cause of the contract failure.). We must assume at the pleadings stage that Wigod met each of the TPP's conditions, and it is undisputed that Wells Fargo offered no permanent modification at all. The terms of the TPP are clear and definite enough to support Wigod's breach of contract theory. Accord, e.g., Belyea v. Litton Loan Servicing, LLP, No. 10-10931-DJC, 2011 WL 2884964, at  (D.Mass. July 15, 2011) (At a minimum, then, the TPP contains all essential and material terms necessary to govern the trial period repayments and the parties' related obligations.), quoting Bosque v. Wells Fargo Bank, N.A., 762 F.Supp.2d 342, 352 (D.Mass.2011). Wigod's complaint sufficiently pled each element of a breach of contract claim under Illinois law. The relevant documents do not undermine her claim as a matter of law.