This section contains the nature of the case and procedural background.

On January 8, 1993, U.S. Nursing entered into a written contract to supply St. Joseph with nurses during a strike. The contract provided that either party could terminate the agreement upon seven days notice but if the hospital failed to give notice, it was required to pay what U.S. Nursing would have earned for the seven additional days. When U.S entered the contract, it has not yet applied for a license to conduct a nursing agency as required by Illinois. U.S. did promptly file for a license after entering the agreement. U.S. was then notified in late January 1993, that the State had scheduled a hearing on its proposed denial of the agency’s application. The State wanted to deny the application as it had begun operations without a license, failed to demonstrate financial solvency and had failed to properly train and verify references and credentials of several of its nurses. It was illegal for U.S. to operate in Illinois without a license. The State also informed St. Joseph that it was in violation for contracting with U.S. and noticed St. Joseph to immediately cease using the service. St. Joseph terminated its contract on February 4, 1993. St. Joseph refused to pay the additional seven days as required by the agreement. U.S. Nursing (P) sued for a breach of contract. The district court granted St. Joseph (D) its motion for summary judgment finding the contract unenforceable. P appealed.

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