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City of Scottsbluff v. Waste Connections of Neb., Inc. - 282 Neb. 848, 809 N.W.2d 725 (2011)

Rule:

To create a contract, there must be both an offer and an acceptance; there must also be a meeting of the minds or a binding mutual understanding between the parties to the contract. A binding mutual understanding or meeting of the minds sufficient to establish a contract requires no precise formality or express utterance from the parties about the details of the proposed agreement; it may be implied from the parties' conduct and the surrounding circumstances.

Facts:

This dispute is over the rates that the appellant Waste Connections of Nebraska, Inc. charged to dispose of solid waste for appellee City of Scottsbluff. The parties had two separate contracts. Under the first contract, the City's trucks collected the waste and took it to Waste Connections' transfer station. Waste Connections then hauled the waste to a landfill that it operated. After this contract expired, Waste Connections charged the City $42.50 per ton for temporarily accepting its waste at the transfer station. About a month later, Waste Connections increased the City's rate to $60 per ton. Under the second contract, Waste Connections performed collection and disposal services for the City and charged the same disposal rate that it charged under the first contract. After the first contract expired, Waste Collections increased the City's rate to $60 per ton under the second contract. After a bench trial, the district court entered judgment for the City. This appeal presents several contract, quasi-contract, and restitution issues.

Issue:

Did the parties form a binding agreement?

Answer:

Yes

Conclusion:

The Supreme Court of Nebraska held that while the parties did not intend to be bound by the terms of the expired SWAP contract, they were operating under an implied contract until appellee City began taking its waste to a new landfill. The Court explained that this was the unusual case of a contract that was sufficiently definite in forming a binding agreement but failed to clarify the parties' rights and duties in the event of a contingency that they both assumed would not occur. The roll-off contract contained all the terms that the parties would have considered essential to form a binding agreement: subject matter, price, and duration. And while the parties clearly intended to be bound by their agreement, they simply failed to negotiate a foreseeable contingency: that SWAP and Waste Connections might not continue the SWAP contract or create a new one for a period that covered the life of the roll-off contract. Under the parties' roll-off contract, the Court concluded that the parties formed a binding agreement despite their failure to negotiate a term for a foreseeable contingency. Because they were bound by the contract, the trial court could supply a term for this contingency—the reasonable value of Waste Connections' services when the contingency occurred. 

Next, the Court held that because the City involuntarily paid the increased rates, the rate modification was invalid and appellant Waste Connections was unjustly enriched by the overpayments. Thus, the City was entitled to full restitution. The trial court erred, however, in determining the reasonable value of the services.

As for the standard of review, the Court explained that it independently reviews questions of law decided by a lower court and that contract interpretation presents a question of law.

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