APPEAL from the Circuit Court of Cook County; the Hon. ARTHUR
L. DUNNE, Judge, presiding.
JUSTICE PERLIN DELIVERED THE OPINION OF THE COURT:
Govind Lakshman and his wife Molini Lakshman (plaintiffs) filed in the circuit court of Cook County an action for declaratory relief with respect to an alleged contract for the sale of real estate. Plaintiffs appeal from a summary judgment entered in favor of defendants Vincent Vecchione, the beneficial owner of a land trust, American National Bank and Trust Company, the trustee, and Russell G. Miller, their attorney (collectively referred to as defendants).
The following issues are presented for review: (1) whether a valid contract existed between the parties; and (2) if a contract is found to exist, whether defendants' damages are limited to $3000 (the amount of plaintiffs' earnest money deposits) as liquidated damages for plaintiffs' breach of said contract.
For the reasons hereinafter set forth, we affirm in part, reverse in part and remand with directions.
On or about June 28, 1979, plaintiffs, through their attorney, Eugene A. DiMonte, submitted to defendants' attorney, Russell G. Miller, a signed offer to purchase certain real estate owned in trust by defendants and located in Lake County, Illinois. The offer, presented on a standard printed legal form, provided for closing five days after title "is shown to be good," at which time plaintiffs would obtain possession of the property. The offer also provided in a stock paragraph printed on the back thereof that upon any breach of the agreement by plaintiffs, defendants would be entitled to all costs and attorney fees incurred as the result of such breach. The offer form granted defendants the option to retain, as liquidated damages, all payments made on the contract, or to pursue any "other remedy given by this agreement or by law or equity."
The offer was mailed to defendants' attorney, Miller, together with a cover letter written by plaintiffs' attorney, DiMonte. The offer itself contained no statement limiting the manner in which it could be accepted. In a postscript to the cover letter, DiMonte requested that Miller "please forward" to DiMonte "a copy of the contract executed by the Trustee."
On July 24, 1979, defendants' attorney replied by letter to plaintiffs' attorney, informing him that the contract had been accepted without change by defendants and executed by the trustee. In this letter plaintiffs' attorney was also advised that a "payout letter" and "closing statement" were being forwarded to him and that at closing the plaintiffs would receive various documents including a copy of the executed sales contract.
On July 25, 1979, plaintiffs' attorney responded, by letter, stating that before closing could take place certain title exceptions would have to be cleared, either in the form of a waiver from the title insurance company or in the form of a written guarantee from defendants that the exceptions would be waived "within a reasonable time."
In a letter dated July 31, 1979, defendants' attorney replied that a certain title exception could not be waived. *fn1 On August 20 plaintiffs' attorney wrote to defendants' attorney stating that plaintiffs "would like to withdraw from the transaction" and requesting return of the earnest money deposit. The record indicates no further negotiations, nor any further demand by plaintiffs for a copy of the executed sales contract.
On January 9, 1980, plaintiffs filed a complaint requesting a declaration that a valid contract did not exist between the parties and further that plaintiffs were entitled to a refund of their $3000 earnest money deposit. On March 17 defendants counterclaimed, seeking a declaration that a valid contract did exist and that defendants were entitled to specific performance of the contract plus costs and attorney fees, or in the alternative, actual damages for breach of contract plus costs and attorney fees.
On June 13 defendants filed a motion for summary judgment on their counterclaim. On July 10 plaintiffs filed a cross-motion for summary judgment on their complaint. On September 9, 1980, the trial court denied plaintiffs' motion for summary judgment and denied that part of defendants' motion which requested specific performance or actual damages, costs and attorney fees. The trial court found that a valid contract existed between the parties and awarded defendants the $3000 earnest money deposit as liquidated damages for plaintiffs' breach of such contract.
Plaintiffs filed a motion for reconsideration of the trial court's decision, which motion was denied on October 16, 1980. They appeal from both the trial court's September 9, 1980, decision and the trial court's order of October 16 denying reconsideration of that decision. Defendants cross-appeal from that part of the trial court's decision denying them specific performance on the contract, or actual damages for breach of contract, costs and attorney fees.
The first issue we consider is whether a valid contract existed prior to plaintiffs' attempt to revoke their offer to purchase defendants' property. Plaintiffs argue that it was the intent of the parties that neither would be bound until ...