CONNOLLY, J.
This dispute is over the rates that the appellant, Waste Connections of Nebraska, Inc. (Waste Connections), charged to dispose of solid waste for the City of Scottsbluff (the City). 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. So 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. We affirm in part, and in part reverse and remand for further proceedings.
Around 1992, the City closed its landfill. To negotiate better rates for using another landfill site, the City and other western communities formed an interlocal organization called SWAP. SWAP is an acronym for Solid Waste Agency of the Panhandle. In November 1996, SWAP contracted with J Bar J Land, Inc., for solid waste disposal services (the SWAP contract) for 10 years, until November 30, 2006. J Bar J Land and another company were Waste Connections' predecessors in interest. Waste Connections acquired the entire operation in 2000, and we will refer only to Waste Connections for ease of discussion.
Waste Connections operated a transfer station for collecting and weighing waste from SWAP members before hauling it to its landfill in an over-the-road truck. The SWAP members collected and hauled their solid waste to the transfer station at their own expense. Hauling the waste to the landfill, which was south of Ogallala, Nebraska, required a 200-mile round trip from the transfer station. Waste Connections also collected the waste for some smaller communities, but the City's waste accounted for about 70 percent of Waste Connection's business. The City wielded most of the voting power on the SWAP board.
The parties amended their agreement in December 1997 and again in November 1998. The amended agreement expired on June 30, 2007. Under the amended agreement, Waste Connections originally charged a $35-per-ton disposal rate. This rate included a base rate of $20.50 per ton, which could increase annually on adjustments pegged to the Consumer Price Index; a scheduled "Tipping Fee," which was paid to the landfill; and a state surcharge. Waste Connections agreed not to charge any SWAP member more than it charged other communities in its service area.
In April 2005, the City entered into an additional and separate contract with Waste Connections, with a 3-year term scheduled to expire on April 30, 2008. The parties refer to this contract as the "roll-off" contract. Under the roll-off contract, Waste Connections leased self-contained compactor units to the City. Waste Connections also provided the City, at no charge, with open roll-off containers for construction waste. The City charged the users of the compactor or roll-off containers; Waste Connections charged the City to collect the units and dispose of their contents at a SWAP-approved facility. The parties agreed that Waste Connections would pay for disposal services under the rate established by the SWAP contract and that the City would reimburse it.
Shawn Green, the district manager for Waste Connections, knew that the company's fuel costs would be substantially increasing in January 2006. Beginning in October 2005, the parties disputed the price of Waste Connections' services. Because of increasing fuel costs, Waste Connections sought to increase its rate. The SWAP board refused to agree or only approved a smaller increase. The City began looking at other options and informed Green that it was considering contracting with the city of Gering, Nebraska, to accept the City's waste at Gering's landfill. Gering was not a SWAP member.
Shortly before the SWAP contract expired, the City informed Green that if the City reached an agreement with Gering, it would terminate the roll-off contract with Waste Connections. Green advised SWAP that Waste Connections wanted another long-term agreement. He offered a 5- or 10-year agreement that allowed the City to retain the lower rate with Consumer Price Index adjustments.
On June 30, 2007, when the SWAP contract expired, Waste Connections' rate was $40.52 per ton. On July 2, the next business day, Waste Connections increased its rate for accepting the City's waste at the transfer station to $42.50 per ton. It charged this rate to any person or entity using the transfer station. The city manager testified that the City knew Waste Connections was losing money and believed that this rate was reasonable.
Also on July 2, 2007, the City entered into an interlocal agreement with Gering to dispose of its waste at Gering's landfill. Subject to the City's terminating its roll-off contract with Waste Connections, Gering also contracted to provide roll-off and compactor unit services directly to the City's businesses or citizens. But under the landfill agreement, Gering would not begin accepting the City's waste until November 1, 2007. Because of regulatory requirements, Gering could not immediately accept the City's waste. The City did not consider other landfills to be reasonable alternatives to Waste Connections because of their distance or inability to accept the City's volume of waste. So it continued to use Waste Connections' transfer station until Gering could accept the City's waste.
On July 9, 2007, Gering passed a resolution to collect the City's waste, including services for roll-off and compactor units, as soon as the time restriction expired under Neb.Rev.Stat. § 18-1752.02 (Reissue 2007). That section required Gering to wait 1 year, until July 8, 2008, to perform the collection services that Waste Connections had been performing under the roll-off contract.
On July 10, 2007, Gering notified Waste Connections of its intent to provide the City's waste collection services in 1 year.
On August 7, 2007, Waste Connections increased its rate for accepting the City's waste at the transfer station to $60 per ton. It charged the increased rate only to the City. Also in August, Waste Connections increased the disposal rate that it charged the City under the roll-off contract to $60 per ton. Within 2 to 3 weeks of receiving a charge ticket with the increased rate, the City objected to the increase in price. Green responded that the rate reflected its increased costs, including fuel costs. The City terminated its SWAP membership on November 1, when it began taking its waste to Gering's landfill. In May 2008, the City gave Waste Connections 60 days' notice that it was terminating the roll-off contract. The notice stated that the City would consider the contract terminated on July 8.
In its complaint, the City alleged it was entitled to recover the payments that Waste Connections had received for disposal services above the rate of $42.50 per ton. Under theories of an implied contract and unjust enrichment, the City claimed that Waste Connections received payments in excess of the reasonable value of its services.
Regarding Waste Connections' services under the SWAP contract, the court agreed that Waste Connections had been unjustly enriched by the City's overpayments for its services at the transfer station. The City had continued to pay Waste Connections' charges after it increased its rate to $60 per ton. But the court concluded that the City had protested and had no reasonable alternative but to use the transfer station because of the unexpected delay in gaining access to Gering's landfill. It concluded that the parties had intended to and did continue their contractual relationship after the SWAP contract expired but had failed to agree on a price.
The court concluded that immediately after the SWAP contract expired, Waste Connections had unilaterally determined that the $42.50-per-ton rate was a reasonable rate. Thus, the court determined that this rate was the best evidence of the reasonable value of its services. It ruled that the City was entitled to the difference between the charges it paid under the reasonable rate of $42.50 per ton and the charges it paid under the unjustified rate of $60 per ton, or $51,280.82. Because it considered the City's payments involuntary under these circumstances, it rejected Waste Connections' defenses of waiver, estoppel, and failure to mitigate.
The court determined that the roll-off contract was valid and in effect until Gering took over providing those services. It recognized that the disposal rate under the roll-off contract was determined by reference to the SWAP contract and that the roll-off contract failed to specify how the rate would be determined after the SWAP contract expired. The court concluded, however, that the roll-off contract did not authorize Waste Connections to unilaterally increase the disposal rate beyond the last rate that the SWAP board had authorized under the SWAP contract, which was $40.52 per ton. But in its pleadings, the City had asked for the difference in charges between the $42.50-per-ton rate and $60-per-ton rate. So to calculate what Waste Connections should have charged the City, the court used the $42.50-per-ton rate as a judicial admission of the correct charges. It concluded that
Waste Connections assigns that the district court erred as follows:
(1) ruling that the expired SWAP contract controlled the disposal rate under the roll-off contract;
(2) failing to apply a clear and convincing burden of proof to the City's unjust enrichment claim;
(3) concluding that justice and fairness required Waste Connections to refund any charges to the City;
(4) failing to require the City to articulate a specific legal principle permitting it to recover under a theory of unjust enrichment;
(5) finding that after the SWAP contract expired, the reasonable disposal rate was $42.50 per ton;
(6) finding that Waste Connections' fee of $60 per ton was unjust without addressing Waste Connections' reasons for charging the fee;
(7) failing to apply the requirements for an implied contract theory of recovery to the extent that the court relied on this theory;
(8) failing to address Waste Connections' claim that the City should be estopped from claiming that the increased rate was unjust because it had voluntarily paid the charges under this rate;
(9) failing to find that the City had waived its right to recover any of the increased charges by its actions or inactions;
(10) ruling that the City was not required to mitigate its damages for its payments made under the roll-off contract; and
(11) ruling that the evidence failed to show that the City had failed to mitigate its damages.
Before addressing Waste Connections' assignments of error, it would be helpful to determine the type of action that is under review and, thus, our standard of review. The parties' arguments and the court's order reflect some confusion about the distinction between implied contracts and quasi-contracts and whether an unjust enrichment claim is an action at law or at equity. So we pause to clarify these issues.
The term "implied contract" refers to that class of obligations that arises from mutual agreement and intent to promise, when the agreement and promise have simply not been expressed in words. An implied contract arises where the intention of the parties is not expressed but where the circumstances are such as to show a mutual intent to contract.
Although in many contexts the traditional distinctions between law and equity have been abolished, whether an action is one in equity or one at law determines an appellate court's scope of review.
Without attempting to characterize the City's action, Waste Connections agrees that this is an action at law. But it argues that it is not a contract action. Some of the City's claims, however, are enforceable contract claims. The City alleged that the parties continued to perform their obligations under the SWAP contract after it expired. The parties litigated this issue at trial, and the court ruled that the parties had continued their relationship under the SWAP contract. The court also ruled that the roll-off contract was valid and in force. So we consider enforceable contract claims to be a part of this action.
But the City also purported to raise two separate theories of recovery: an implied contract and unjust enrichment. It alleged that an agreement that the City would pay the reasonable value of Waste Connections' services was implied. And it alleged that Waste Connections had been unjustly enriched by its excessive charges. But the City did not claim that Waste Connections had breached an implied contract. Instead, it asked the court to order
We have held that
When a party uses an assumpsit action in this sense, it is a quasi-contract claim sounding in restitution. Restitution is predominantly the law of unjust enrichment.
Because the City sought to disgorge overpayments to prevent unjust enrichment, its allegations presented an assumpsit claim for restitution
In a bench trial of a law action, the trial court's factual findings have the effect of a jury verdict and will not be disturbed on appeal unless clearly wrong. We do not reweigh the evidence but consider the judgment in a light most favorable to the successful party and resolve evidentiary conflicts in favor of the successful party. And that party is entitled to every reasonable inference deducible from the evidence.
Waste Connections argues that the court erred in concluding that it could not charge $60 per ton, because the SWAP contract no longer governed the price of its services. It argues that the SWAP contract expired by its terms on June 30, 2007. The City concedes that the SWAP contract expired on this date. But it contends that because Waste Connections continued to provide services and the City continued to use its services, an implied contract arose between the parties that required the City to pay the reasonable value of the disposal services.
When a plaintiff claims that a contract governs the parties' rights and obligations and, alternatively, that it is entitled
The parties obviously could have agreed to extend the SWAP agreement before it expired.
Following the City's lead, the court mistakenly conflated the implied contract claim with the City's quasi-contract claim. But the question is, aside from whether Waste Connections was unjustly enriched: Did the circumstances show that the parties intended to be bound by the same terms of their expired contract?
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.
In limited circumstances, the parties' failure to specify an essential term does not prevent the formation of a contract. The Restatement (Second) of Contracts
But unless the parties have stated otherwise in an express agreement, extrinsic standards can only provide a basis for understanding a contract.
We agree with Waste Connections that the parties were not operating under the terms and conditions of the expired SWAP contract, despite failing to agree on the price of services. The parties' conduct showed that the price of services would have been an essential term to any agreement to extend that contract and that Waste Connections never agreed to be bound by those terms. Moreover, their conduct did not show an intent to be bound by the expired contract in any other sense. So the court was clearly wrong in concluding that Waste Connections was accepting the City's waste at the transfer station under an implied agreement to continue the terms of the SWAP contract.
Despite the court's incorrect conclusion that the parties were operating under the terms of the expired SWAP contract, the evidence showed that the parties were operating under an implied contract for temporary disposal services. But the new contract did not require the court to supply a missing term.
The city manager testified that he believed the parties were operating under the SWAP agreement based on his conversations with Green, the district manager for Waste Connections. Because of these conversations, he understood that Waste Connections would continue to accept the City's waste at the transfer station and that the City would pay for its services. The city manager clearly meant that Waste Connections would continue to accept the City's waste until the Gering landfill was available because after this date, the City would be using Gering's landfill. And Green knew that Waste Connections would be providing its services only until the Gering landfill became available to the City in November.
These negotiations established that Waste Connections had agreed to temporarily accept waste from the City's trash trucks at its transfer station until November 1, 2007. Green testified that before the SWAP contract expired, he had informed the mayor that if the parties did not reach an agreement for a SWAP contract, the price of Waste Connections' services would go up substantially. Immediately after the SWAP contract expired, Waste Connections increased its rate at the transfer station to $42.50 per ton. This price was reflected on each charge slip that the City's drivers received from the transfer station and on the City's monthly invoice. The City manifested its assent to Waste Connections' price by paying for its services without protest.
It is true that Waste Connections simultaneously raised its price to $42.50 per ton for any individual customer bringing solid waste to the transfer station. But despite that action, Waste Connections would not have accepted the City's volume of waste
Although the City continued to pay for Waste Connections' services when it increased the disposal rate to $60 per ton, it did so under protest. The City's restitution claim raised only the $60-per-ton disposal rate. Having determined that an implied contract for temporary services existed, we consider Waste Connections' claims that the court incorrectly applied unjust enrichment principles.
Before reaching the merits of Waste Connections' challenge to the unjust enrichment ruling, we address its argument that the court erred in failing to require clear and convincing proof for any unjust enrichment claim. Waste Connections contends that a clear and convincing standard of proof applied here. But the cases it cites show only that we have applied a clear and convincing burden of proof in actions to impose a constructive trust for the defendant's alleged fraud or constructive fraud.
An action to impose a constructive trust is an equitable action.
Relying on our decision in Wrede v. Exchange Bank of Gibbon,
We have stated this rule in other cases since Wrede was decided.
The confusion reflected in this rule stems from the equitable nature of restitution liability even when it is imposed in an action at law. It is also true that a court exercises its equitable powers when it determines a just and equitable restitution remedy. But the nature of the remedy does not determine the nature of the cause of action. Restitution constitutes "an independent basis of liability in common-law legal systems—comparable in this respect to a liability in contract or tort."
This rule does not mean that the decisional law must have recognized a specific fact pattern as unjust enrichment. Unjust enrichment is a flexible concept. The Restatement (Third) of Restitution and Unjust Enrichment
The issue here involves Waste Connections' purported unilateral modification of its agreement with the City for temporary services by increasing its rate to $60 per ton. Normally, a plaintiff cannot recover money voluntarily paid under a claim of right to payment if the plaintiff knew of facts that would permit the plaintiff to dispute the claim and withhold payment.
One of the exceptions to the voluntary payment rule is duress.
"Duress is coercion that is wrongful as a matter of law."
Threatening to take advantage of business exigency to impose unjust demands is commonly referred to as "economic duress" or a "business compulsion." We have stated that "[t]he doctrine of business coercion [or economic duress] is directed at some inequalities in bargaining power."
Economic duress may be found in threats, or implied threats, to cut off a supply of goods or services when the performing party seeks to take advantage of
In Carpenter Paper Co. v. Kearney Hub Pub. Co.,
We rejected the publisher's argument that the parties were still operating under their express contract. We concluded that the parties' conduct showed they had mutually agreed to cancel the contract. But we concluded that their further transactions constituted a new agreement to which the economic duress doctrine applied:
We adopted the following economic duress rule: "`To be voidable because of duress, an agreement must not only be obtained by means of pressure brought to bear, but the agreement itself must be unjust, unconscionable, or illegal.'"
Under the Restatement's principles, we believe that these economic duress rules apply to modifications of a contract also. But the facts here are different from those in Carpenter Paper Co.
Whether a plaintiff voluntarily or involuntarily made a payment under a claim of right is a question of fact.
This finding was not clearly wrong. We also note that the City could not have litigated its dispute with Waste Connections before paying for its services when it had no reasonable alternative for disposing of its waste. The issue is whether Waste Connections took advantage of the circumstances to impose unjust demands. Unlike the facts in Carpenter Paper Co., here there was evidence to support a finding that Waste Connections was exploiting the exigency that its denial of services would create by unjustifiably increasing its price only for the City.
In contrast to the 4.6-percent price increase that we considered in Carpenter Paper Co., Waste Connections' $60 rate represented a 41-percent price increase over the $42.50 rate that the City had agreed to pay immediately after the SWAP contract expired. It increased its price by this amount in the span of a month, immediately after it learned that the City would terminate the roll-off contract in a year. And it did not charge this price to any other customer using its services.
Green had admitted that by raising its rate to $60 per ton only for the City, Waste Connections was attempting to compensate for losing the City's business under the SWAP contract. At trial, Green stated that he had meant that Waste Connections could not reduce its workforce at the transfer station if it had to keep enough people to handle the City's waste. But before Green learned that the City intended to cancel the roll-off contract, Green's only complaint to the City had been Waste Connections' increasing fuel costs, not its personnel costs.
Green admitted that Waste Connections had particularly wanted to keep the roll-off contract with the City. But he denied that the company had increased its disposal rate only for the City because it had learned the City would terminate the roll-off contract. Green also admitted that Waste Connections' fuel costs had decreased significantly in the month before it increased its rate to $60 per ton for the City. He maintained, however, that Waste Connections had imposed the increased price because it was operating the transfer station at a loss. He stated that Waste Connections did not increase the fees for other users of the transfer station because they were small in comparison.
But the court obviously did not find Green's explanations credible. It found no economic justification for Waste Connections' charging the City $17.50 more per ton than it charged to smaller volume customers. The court noted Green's deposition testimony in finding that the $60-per-ton rate was intended to compensate Waste Connections for its loss of the City's business to Gering. It concluded that Waste Connections' attempt to cover its anticipated losses was not a valid justification for its price increase.
Under our standard of review, we cannot say that the court's findings were clearly wrong. Sufficient evidence supported its finding that the City was not voluntarily paying the $60-per-ton rate. The record showed that the City had no reasonable alternative and that Waste Connections took advantage of the circumstances that its denial of services would have created to unjustly enrich itself. Because the facts support a finding of economic duress, we conclude that the court did not err in determining that the City was entitled to restitution. That brings us
Waste Connections contends that even under the City's unjust enrichment claim, the court erred in requiring it to disgorge any part of the payments that the City made to it under its $60-per-ton rate. It argues that it had the right to charge whatever rate it wished after the SWAP contract expired. It contends that justice and fairness did not require it to disgorge the City's payments when it was operating the transfer station at a loss. We disagree.
As explained, the parties were operating under an implied contract for temporary services after the SWAP contract expired. Waste Connections agreed to provide these temporary services, and the City agreed to pay its increased rate of $42.50 per ton. But Waste Connections' later increase of its rate to $60 per ton was a unilateral modification of the contract, to which the City assented under economic duress and for which no new consideration existed.
We recognize that our decision in Carpenter Paper Co. seems to require a court to consider whether a defendant's profit from an unjust demand was reasonable before concluding that the defendant was unjustly enriched. Because duress does not include hard bargaining, that may be a relevant factor in determining whether a party used duress to obtain unfair advantage in negotiating a new contract after a previous one has expired. In some negotiations for a new contract, a relevant consideration is whether a party exploited the other's vulnerability in a manner that passes the bounds of economic self-interest.
We have held that the parties may orally modify the terms of a written executory (not fully performed) contract after its execution and before a breach has occurred, without any new consideration.
We conclude that because the City did not voluntarily assent to the modification, it did not change the implied contract. That is, the City's contractual liability under the implied contract obligated it to pay $42.50 per ton for disposal services.
The measure of restitution is normally a defendant's unjust gain.
Because the City protested the charges under circumstances that showed it was reasonable for it to accede to Waste Connections' demand, the court properly rejected Waste Connections' waiver and estoppel claims.
The court concluded that because the roll-off contract incorporated the SWAP rate for disposal services, Waste Connections could only charge the last rate that the parties had agreed to ($40.52 per ton) under the SWAP contract. But because the City had judicially admitted that it should pay $42.50 per ton, the court used that rate as the price that the City was obligated to pay. Waste Connections contends that the court erred in using the $42.50 rate. It agrees with the court's ruling that the roll-off contract was valid and in effect after the SWAP contract expired on June 30, 2007. But because the roll-off contract's rate could no longer be determined by referring to the SWAP contract, Waste Connections contends that after the SWAP contract expired, it could charge whatever it wished under the roll-off contract.
The City contends that if the court had not used the last price agreed to before the SWAP contract expired, it would have been required to find that the parties failed to create a contract because they did not agree on price. It argues that this result would be untenable because the parties clearly intended to continue performing the roll-off contract even after the SWAP contract expired. Alternatively, the City contends that even if the parties did not agree on the price of services, they were operating under an implied contract and that Waste Connections was only entitled to the reasonable value of its services. It argues that the court determined the reasonable value of Waste Connections' disposal services was $42.50 per ton.
We disagree with the City that the roll-off contract would be unenforceable if the parties failed to agree on the price for services in the event that they did not continue their relationship under the SWAP contract. It is true that a court will not supply a term necessary to create a binding contract.
In sum, 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 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. Here, the question is what rule governs the gap-filling that the omission in their contract requires.
The Restatement (Second) of Contracts provides a default rule for the omission of terms necessary to determining the parties' obligations under an enforceable contract: "When the parties to a bargain sufficiently defined to be a contract have not agreed with respect to a term which is essential to a determination of their rights and duties, a term which is reasonable in the circumstances is supplied by the court."
But under the Restatement principles, the court erred in concluding that it could simply use the last price charged under the SWAP contract or, alternatively, the price that the City had judicially admitted to owing in its complaint. These are not valid default rules when a court concludes that the parties have not agreed on an essential term to cover a contingency.
The first step in an omitted-term case is to determine whether interpretative principles show what the term should be. That is, a court should first consider whether there exists a "tacit agreement or a common tacit assumption" or whether it can supply a term "by logical deduction from agreed terms and the circumstances."
We reject Waste Connections' contention that because a nonnegotiated contingency occurred, Waste Connections could charge the City whatever it wished. Such a term would obviously be contrary to the implied covenant of good faith and fair dealing that every contract carries.
Nonetheless, for the period that the parties' implied agreement for temporary services was in effect, we conclude that the court could reasonably supply the price of those services by referring to their implied contract. As discussed, after the SWAP contract expired, the parties were operating under an implied contract for the same services for the next 4 months. In supplying this price as the reasonable value of Waste Connections' services for this 4 months, the court specifically relied on Waste Connections' unilaterally set price of $42.50 per ton. If the City had accepted either of Waste Connections' long-term proposals to continue the SWAP relationship, it would have paid less for disposal services during that 4-month period. So we conclude that the court properly used the $42.50-per-ton rate. This price was indicative of what Waste Connections considered to be a fair price in the absence of a long-term commitment from the City.
But whether the court correctly applied this rate to the remaining 8 months of the roll-off contract is less certain. After the 4-month term of the implied contract expired, there was no unilateral price to rely on to show what Waste Connections considered to be a fair price, absent a long-term commitment from the City. We do not consider the $60-per-ton rate to be indicative of a fair price. The evidence supported the court's finding that Waste Connections was using its superior bargaining position to compensate itself for losing the City's future business.
It is true that the evidence showed that the roll-off contract was profitable to Waste Connections under its $42.50-per-ton rate. But Waste Connections presented evidence that its fuel costs were increasing by the end of the 4-month period. So the court could not simply supply the $42.50 rate to the remaining 8 months of the roll-off contract without considering whether this rate was fair and reasonable to both parties. So we remand this cause for the limited purpose of determining a reasonable price to supply for Waste Connections' services for the period from November 1, 2007, when the implied contract expired, to July 8, 2008, when the roll-off contract expired.
In supplying the reasonable price of Waste Connections' services on remand, the court may consider the fair market value of disposal services in the region when Waste Connections' services were rendered.
Finally, "[b]oth the meaning of the words used and the probability that a particular term would have been used if the question had been raised may be factors in determining what term is reasonable in the circumstances."
We emphasize, however, that the court correctly determined that Waste Connections' mitigation of damages defense was without merit in this case. The issue here is an omitted term, not whether the City could have avoided damages.
We conclude that the parties did not intend to be bound by the terms of their expired SWAP contract. But we conclude that they were operating under an implied contract for Waste Connections to temporarily accept the City's waste at the transfer station until the City began taking its waste to a new landfill.
We affirm the court's conclusion that during the time the parties were operating under the implied contract, the City involuntarily paid Waste Connections' charges after Waste Connections significantly increased its rate. We conclude that Waste Connections obtained the City's assent to its unilateral modification of the price for services through economic duress. The modification was therefore invalid, and Waste Connections was unjustly enriched by the overpayments. We affirm the court's restitution award for the full amount of these overpayments under the implied contract.
Under the parties' roll-off contract, we conclude 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 court could supply a term for this contingency—the reasonable value of Waste Connections' services when the contingency occurred. But we reverse the court's determination of the reasonable value of Waste Connections' services and remand the cause for further proceedings on this issue.
AFFIRMED IN PART, AND IN PART REVERSED AND REMANDED FOR FURTHER PROCEEDINGS.
WRIGHT, J., not participating.