P.M.C. Constr., Inc. v. Ga. Pac. Corp.
2008 U.S. Dist. LEXIS 95746 (W.D. Ark. Nov. 20, 2008).
Key Point:
Course-of-dealing evidence may not be used to insert a new provision into an unambiguous contract.
CCL Summary:
P.M.C. Construction had worked as an independent contractor for Georgia-Pacific (owner) for fourteen years, performing industrial construction and maintenance work at the owner’s paper mill. The owner entered into a service contract with the contractor to perform certain work at the paper mill. The contract covered all purchase orders and work to be performed during a two year period. Prior to the expiration of the contract’s two year period, the owner notified the contractor that it would not be allowed to perform work at the paper mill in the future. Seeking lost profits as damages, the contractor sued the owner for breach of contract. The owner counterclaimed. The owner filed a motion for summary judgment.
The owner asserted that the contractor was unable to identify an actual term of the written contract that was breached. The contractor responded that the course of dealing between the parties created an expectation that a certain amount of work would be awarded to the contractor. As the contract did not explicitly address whether it created an expectation of work, the contractor asserted that evidence of the parties’ conduct could supplement or add meaning to the contract. The contractor wished to introduce parol evidence to show that the owner breached the contract when it notified the contractor that it would no longer be allowed to perform work at the paper mill. The contract contained no ambiguous language needing interpretation, however, and there were no terms of art requiring explanation. The contract did not contain language promising the contractor work or the opportunity to bid on work. The contractor wished to use course-of-dealing evidence to insert a new provision into the contract, rather than using the evidence to aid with the interpretation of contractual language. Furthermore, the written contract contained a merger clause stating that the contract constituted the entire agreement between the parties and superseded all previous agreements. Because the course-of-dealing evidence could not be used to add an additional term to the contract, the contractor could not identify a term in the written contract that the owner breached. The owner’s breach of contract claim was dismissed. The owner’s summary judgment motion was granted.
The owner asserted that the contractor was unable to identify an actual term of the written contract that was breached. The contractor responded that the course of dealing between the parties created an expectation that a certain amount of work would be awarded to the contractor. As the contract did not explicitly address whether it created an expectation of work, the contractor asserted that evidence of the parties’ conduct could supplement or add meaning to the contract. The contractor wished to introduce parol evidence to show that the owner breached the contract when it notified the contractor that it would no longer be allowed to perform work at the paper mill. The contract contained no ambiguous language needing interpretation, however, and there were no terms of art requiring explanation. The contract did not contain language promising the contractor work or the opportunity to bid on work. The contractor wished to use course-of-dealing evidence to insert a new provision into the contract, rather than using the evidence to aid with the interpretation of contractual language. Furthermore, the written contract contained a merger clause stating that the contract constituted the entire agreement between the parties and superseded all previous agreements. Because the course-of-dealing evidence could not be used to add an additional term to the contract, the contractor could not identify a term in the written contract that the owner breached. The owner’s breach of contract claim was dismissed. The owner’s summary judgment motion was granted.
