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Northern Illinois Gas Co. v. Energy Cooperative, Inc.

Illinois Court of Appeals
461 N.E.2d 1049 (1984)


Northern Illinois Gas Company (NIG) (defendant) entered into an agreement to buy 56 million barrels of naphtha from Energy Cooperative, Inc (ECI) (plaintiff) over a ten year period. NIG converted the naptha into natural gas. Subsequently, the price of natural gas sold by drillers and pipelines declined, and NIG stopped buying naphtha from ECI. ECI sued NIG for breach of contract, seeking the difference between the market price of naphtha and the contract price along with consequential damages. The contract contained a provision for liquidated damages in the amount of one cent per gallon upon demand of the non-defaulting party. ECI did not seek liquidated damages, which would have been approximately $13.6 million. After a trial, the jury awarded ECI $305.5 million as actual damages. NIG appealed to the Illinois Court of Appeals.

Rule of Law


Holding and Reasoning (Heiple, J.)

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