## Facts

- A consultant proposed helping a financial institution develop a healthcare accounts receivable securitization program.
- The institution’s executives negotiated with the consultant, authorized him to begin work, and later signed a written consulting letter covering May 25 to December 31, 1995, with monthly compensation.
- The writing stated referral fees would be set case-by-case and that, if the program succeeded, the parties “hope[d]” to move to an ongoing consulting arrangement paid on a fee basis by program participants; it also listed ongoing administrative tasks required for the program.
- The consultant alleged the institution repeatedly assured him, before and after the writing, that if the program succeeded he would continue as consultant and be paid under a “basis points” fee model.
- The program succeeded; bonds totaling $32 million were issued.
- After the written term ended, the consultant continued to perform ongoing consulting and administrative services, and the institution allegedly accepted and benefited from those services.
- The consultant invoiced $25,600 for the first year of post-term work (calculated as 8 basis points of $32 million), and the institution refused to pay.
- The consultant sued in diversity under Illinois law for breach of contract and alternative equitable theories (including promissory estoppel and unjust enrichment).
- The district court dismissed under Rule 12(b)(6), finding the alleged ongoing arrangement too indefinite to enforce and the promissory-estoppel theory barred by the Illinois Statute of Frauds.

## Issues

1. Whether the complaint plausibly alleged an enforceable contract (oral or partly oral and partly written) for ongoing consulting services compensated by basis points, notwithstanding asserted indefiniteness as to duration and compensation.
2. Whether the Illinois Statute of Frauds barred promissory estoppel or related equitable theories at the pleading stage where the alleged agreement’s duration and performance were fact-dependent and the plaintiff alleged reliance and accepted benefits.

## Decision

- The Seventh Circuit reversed the Rule 12(b)(6) dismissal and remanded.
- The court held the complaint plausibly alleged a sufficiently definite ongoing consulting agreement when the writing’s contemplated continuation was read together with alleged oral assurances, continued performance, and acceptance of benefits.
- The court held it was premature to dismiss promissory estoppel and related equitable claims as barred by the Statute of Frauds because whether the agreement could be performed within a year and whether equitable exceptions applied could not be resolved on the face of the complaint.

## Legal Principles

- On a Rule 12(b)(6) motion, courts accept well-pleaded factual allegations as true and dismiss only when the complaint forecloses any entitlement to relief.
- Under Illinois law, a contract is not unenforceable merely because not every term is spelled out if essential terms may be inferred from surrounding circumstances and the parties’ conduct.
- Contractual intent and the effect of tentative phrasing in a writing can present factual questions when the plaintiff alleges additional assurances and performance consistent with a binding agreement.
- Illinois Statute of Frauds analysis turns on whether an agreement could conceivably be performed within one year; that determination may require factual development.
- Equitable theories such as promissory estoppel, partial performance, and unjust enrichment may proceed at the pleading stage where the plaintiff alleges reliance, continued services, and the defendant’s knowing retention of benefits.

## Conclusion

The Seventh Circuit allowed the consultant’s contract and alternative equitable claims to proceed, holding that the alleged post-term basis-point arrangement and the Statute of Frauds defenses could not be rejected as a matter of law on the pleadings given the asserted oral assurances, continued performance, and acceptance of benefits.


Fischer v. First Chi. Cap. Mkts., Inc., 195 F.3d 279 (7th Cir. 1999)