Opinion ID: 2995635
Heading Depth: 1
Heading Rank: 8

Heading: Ill App.2d 846 (1st Dist. 1967). We

Text: review the district court’s analysis of these factors below. 1. Step one: Intent of the parties As noted previously, paragraph 15 of the settlement agreement states: It is intended by Sellers and Purchasers that January 25, 2001 shall be the absolute final date for closing . . . . If closing has not occurred on or before January 25, 2001, for any reason other than Sellers’ default . . . Purchaser shall have no right to purchase or otherwise encumber the Property or Homestead parcel, the Contract shall be terminated, and Purchaser shall have no rights with respect to the Property or Homestead Parcel. The magistrate judge found that this clause was an essential (if not ’the’ essential) term of the Settlement Agreement, and we agree. In Illinois, the primary object in construing a contract is to give effect to the intention of the parties. Arrow Master, 12 F.3d at 713. The extent to which a time-essence clause should be strictly enforced depends upon the parties’ intentions, which are to be determined both by the language used in the agreement and the circumstances surrounding the agreement. Anest v. Bailey, 198 Ill.App.3d 740, 746 (2d Dist. 1990). When considering extrinsic evidence, the factfinder should focus, in descending order of importance, on: (1) the parties’ negotiations over the contract at issue; (2) their course of performance; (3) their prior course of dealing; and (4) trade usage in the relevant industry. See, e.g., Reynolds v. Roberts, 202 F.3d 1303, 1316 (11th Cir. 2000); Den Norske Bank AS v. First Nat’l Bank of Boston, 75 F.3d 49, 52-53 (1st Cir. 1996). In the case before us, the district court considered the language of the settlement agreement, along with the substance of the parties’ negotiations and their course of performance prior to January 26, 2001./5 All three categories of evidence support a finding of materiality. The explicit and unequivocal language of the contract is an unambiguous expression of intent, referring to January 25, 2001 as an absolute, final date for closing that shall be enforced without exception. These contract terms were chosen with precision after extensive negotiations during which Ocean Atlantic conceded, in its own words, that failure to close . . . shall result in Plaintiffs’ unequivocal right to terminate the contract. Extrinsic evidence establishing the bitterness of the parties’ protracted relationship also supports the magistrate’s finding that the parties intended strict adherence to the January 25, 2001 closing date. The record reflects that the initial contract contemplated closing in November 1997, and nearly three years had passed without reaching that objective. Thus, by the time the most recent settlement agreement was drafted, the Sellers testified that their heart was no longer in selling their property to Ocean Atlantic, and Ocean Atlantic’s president similarly testified that he was sick and tired of dealing with the Sellers./6 We are convinced that the settlement agreement reflects a compromise. The Sellers agreed to continue their relationship through January 25, 2001 and give Ocean Atlantic one last, final chance to comply with the language of the contract and purchase the farmland. In exchange, Ocean Atlantic agreed that absolutely no further delays would be tolerated. In light of the testimony that the Sellers would not have signed the settlement agreement unless it contained the drop-dead clause, as well as myriad additional evidence referred to in the trial judge’s opinion, we agree with the district court’s conclusion that the clause was a material term of the contract. Mayfair Constr. Co. v. Waveland Assocs., 249 Ill.App.3d 188, 202 (1st Dist. 1993). We see no merit to Ocean Atlantic’s assertion that, although the Sellers vigorously contend that they would have never entered into the Settlement Agreement without the inclusion of the drop-dead clause, the Sellers would have entered into the Settlement Agreement if the language of the clause had been slightly altered to make January 26 (or any other reasonable date) the outside closing date. (Br. at 38.) Ocean Atlantic supports this claim with Argoudelis’s testimony during cross- examination that the Sellers: (1) were seeking to close fairly quickly after October 26, 2000; (2) readily agreed to Ocean Atlantic’s offer to set the closing date for January 25, 2001 or before; and (3) probably would have agreed to close on January 26, 2001 if Ocean Atlantic had suggested this date, and it had been the drop-dead date provided for in the contract instead of January 25. Ocean Atlantic concludes from this evidence that closing on January 25, 2001 was not the sine qua non of the settlement agreement. (Id.) Ocean Atlantic’s flaccid argument denigrates the fundamental value of the drop-dead clause: finality. The Sellers granted Ocean Atlantic the right to propose any given closing date within several months of October 25. However, when the Sellers accepted the offer to close January 25, they did so with the understanding that this date was final. Thus, this date became a material term of the contract because it established the definite and fixed moment after which the parties’ mutual rights, responsibilities, and relationship would terminate-- something the Sellers had been seeking to accomplish for almost three years. It is of no consequence that the Sellers allowed Ocean Atlantic to pick the precise final closing date and stated that they would have accepted payment on some date other than January 25 if that date had been selected by Ocean Atlantic and accepted by both parties in the first instance. Argoudelis gave clear, convincing, and undisputed testimony that once the date [January 25] was selected . . . that particular date held significance because it was a rigid deadline that could not be violated instead of some approximation of a reasonably elastic date. Ocean Atlantic points us to no evidence demonstrating that the Sellers were willing to accept payment after January 25, once that date was offered and accepted as the final date for performance. The trial judge expressly credited Argoudelis’s testimony, and we reject Ocean Atlantic’s argument that the trial judge’s finding was clearly erroneous./7 Freeman United Coal Mining Co. v. Sum-mers, 272 F.3d 473, 480 (7th Cir. 2001) (one cannot rationally ignore credible, uncontested evidence); Central St. S.E. & S.W. Areas Pension Fund v. Koder, 969 F.2d 451, 454- 55 (7th Cir. 1992). 2. Step two: Totality of the circumstances Having concluded that time was of the essence, we must next consider whether the trial court erred in finding that Ocean Atlantic committed a material breach by failing to meet all of the requirements for closing until January 26, 2001--one day after the drop-dead date in the contract. We emphasized ante at 12-13 that even when the parties agree to make timely performance an essential element of the contract, the factfinder must also consider whether the breach was material as to justify the other party’s subsequent refusal to perform, based upon the totality of the circumstances. Although the majority of the magistrate judge’s opinion focused on the language of the drop-dead clause and the intent of the parties when entering into it, 132 F. Supp.2d at 663-72, the judge also dealt with the overall nature of the breach in light of several countervailing equitable factors. Id. at 672-74. In the latter portion of his opinion, the judge carefully explained why these factors fail to justify preserving the contract and found that Ocean Atlantic committed a material breach even after considering such factors. Id. Thus, we are convinced that the magistrate properly applied the law and reached findings of fact that are reasonably supported in the record. Accordingly, we hold that Illinois law permits a finding of material breach based upon Ocean Atlantic’s one-day delay in performance. See Chariot Holdings, 153