City of Scottsbluff v. Waste Connections of Neb.

C ity of SCottSbluff, a muniCipal Corporation,
appellee , v. WaSte C onneCtionS of
nebraSka , inC., appellant.
809 N.W.2d 725
Filed December 9, 2011. 	No. S-10-753.
1. Contracts: Parties: Intent: Words and Phrases. 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.
2. Contracts: Intent. If the parties’ conduct is sufficient to show an implied con-
tract, it is just as enforceable as an express contract.
3. Contracts. A claim that the parties created an enforceable contract generally
presents an action at law.
4. Contracts: Restitution: Unjust Enrichment. A claim that a court should imply
a promise or obligation to prevent unjust enrichment is sometimes referred to
as an “implied-in-law contract” or a “quasi-contract.” Quasi-contract claims are
restitution claims to prevent unjust enrichment.
5. Contracts: Restitution. Any quasi-contract claim for restitution is an action
at law.
6. Actions: Contracts: Equity: Restitution. An action in assumpsit for money had
and received may be brought where a party has received money that in equity and
good conscience should be repaid to another. When a party uses an assumpsit
action in this sense, it is a quasi-contract claim sounding in restitution.
7. Judgments: Appeal and Error. 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. An appellate court does not reweigh the evidence
but considers the judgment in a light most favorable to the successful party and
resolves evidentiary conflicts in favor of the successful party. And that party is
entitled to every reasonable inference deducible from the evidence.
8. ____: ____. An appellate court independently reviews questions of law decided
by a lower court.
9. Contracts. Contract interpretation presents a question of law.
10. Contracts: Restitution. When a plaintiff claims that a contract governs the par-
ties’ rights and obligations and, alternatively, that it is entitled to restitution under
a quasi-contract claim, a court should address the contract claim first.
11. Contracts: Restitution: Unjust Enrichment. Restitution is subordinate to con-
tract as an organizing principle of private relationships, so the terms of an
enforceable agreement normally displace any claim of unjust enrichment within
their reach.
12. Contracts: Parties: Intent. 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.
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13. Contracts: Parties. 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.
14. ____: ____. Unless the parties have stated otherwise in an express agreement,
extrinsic standards can only provide a basis for understanding a contract.
15. Breach of Contract: Parties: Intent. The circumstances must show that the
parties manifested an intent to be bound by a contract. Their manifestations are
usually too indefinite to form a contract if the essential terms are left open or are
so indefinite that a court could not determine whether a breach had occurred or
provide a remedy.
16. Contracts: Parties: Intent. If the parties’ manifestations or conduct shows that
they do not intend to be bound by a contract unless they agree upon the price for
services and they fail to agree, there is no contract.
17. Contracts: Proof. The standard of proof for a quasi-contract claim is a prepon-
derance, or proof by the greater weight, of the evidence.
18. Restitution: Unjust Enrichment. To recover under a theory of unjust enrich-
ment, the plaintiff must allege facts that the law of restitution would recognize as
unjust enrichment.
19. Unjust Enrichment: Words and Phrases. Unjust enrichment means a transfer of
a benefit without adequate legal ground. It results from a transaction that the law
treats as ineffective to work a conclusive alteration in ownership rights.
20. Duress. 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. but exceptions exist if the
plaintiff shows that its consent was imperfectly voluntary, or ineffective, for a
legally recognized reason.
21. Unjust Enrichment: Restitution: Duress. Duress is an exception to the vol-
untary payment rule. If a plaintiff’s overpayment to the defendant was induced
by duress, the plaintiff can seek restitution to the extent that the defendant was
unjustly enriched.
22. Contracts: Parties: Restitution. If one party to a contract demands from the
other a performance that is not in fact due by the terms of their agreement, under
circumstances making it reasonable to accede to the demand rather than to insist
on an immediate test of the dispute obligation, the party on whom the demand is
made may render such performance under protest or with reservation of rights,
preserving a claim in restitution to recover the value of the benefit conferred in
excess of the recipient’s contractual entitlement.
23. Duress: Words and Phrases. Duress is coercion that is wrongful as a matter
of law. Lawful coercion becomes impermissible when employed to support a
bad faith demand: one that the party asserting it knows (or should know) to be
unjustified.
24. Breach of Contract: Parties: Duress. 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 the circumstances that would be created by its
breach of an agreement.
CITy oF SCoTTSbLUFF v. WASTe CoNNeCTIoNS oF Neb. 	849
Cite as 282 Neb. 848

25. Contracts: Duress. 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.
26. ____: ____. The economic duress rules apply to modifications of a contract.
27. ____: ____. Whether a plaintiff voluntarily or involuntarily made a payment
under a claim of right is a question of fact.
28. Contracts: Parties: Duress. A weaker party’s assent to a unilateral contract
modification, which is to that party’s disadvantage, should not be implied from
its conduct when the weaker party has shown that its assent was obtained through
economic duress.
29. Restitution: Unjust Enrichment. The measure of restitution is normally a
defendant’s unjust gain.
30. Contracts: Courts. A court will not supply a term necessary to create a bind-
ing contract. Nor will a court rewrite a contract or speculate as to terms of the
contract which the parties have not seen fit to include. It is not the province of a
court to rewrite a contract to reflect the court’s view of a fair bargain.
31. Contracts. 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 sup-
plied by the court. This rule applies to circumstances showing that the parties to
a binding contract have failed to negotiate a term to cover a future contingency.
32. ____. A court should not engage in a hypothetical bargaining analysis if applying
interpretative principles shows that the parties did not agree on a contract term
necessary to determining their rights and duties. In that circumstance, it must
supply a term that comports with community standards of fairness and policy.
33. ____. Good faith performance excludes an abuse of a power to specify the terms
of a contract.
Appeal from the District Court for Scotts bluff County: leo
D obrovolny, Judge. Affirmed in part, and in part reversed and
remanded for further proceedings.
Stephen D. Mossman and patricia L. Vannoy, of Mattson,
Ricketts, Davies, Stewart & Calkins, for appellant.
Howard p. olsen, Jr., and John F. Simmons, of Simmons
olsen Law Firm, p.C., for appellee.
H eaviCan, C.J., C onnolly, G errarD, StepHan, mCC ormaCk ,
and miller-lerman, JJ.
C onnolly, J.
I. SUMMARy
This dispute is over the rates that the appellant, Waste
Connections of Nebraska, Inc. (Waste Connections), charged
850 	282 NebRASkA RepoRTS

to dispose of solid waste for the City of Scottsbluff (the City).
The parties had two separate contracts. Under the first con-
tract, 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.
II. bACkGRoUND
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 com-
pany 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.
1. tHe SWap C ontraCt
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
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Cite as 282 Neb. 848

the waste for some smaller communities, but the City’s waste
accounted for about 70 percent of Waste Connection’s busi-
ness. 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 com-
munities in its service area.
2. roll-off C ontraCt
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.
3. WaSte C onneCtionS inCreaSeS itS rateS
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
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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 accept-
ing 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.
4. tHe C ity enterS into an
aGreement WitH G erinG
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 busi-
nesses 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 compac-
tor 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
CITy oF SCoTTSbLUFF v. WASTe CoNNeCTIoNS oF Neb. 	853
Cite as 282 Neb. 848

collection services that Waste Connections had been perform-
ing 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. Green responded that Waste Connections would continue
to provide services under the roll-off contract until July 2008
unless otherwise notified.
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.
5. C ourt’S orDer
(a) The Court’s Award Under
the SWAp Contract
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 reason-
able 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
854 	282 NebRASkA RepoRTS

their contractual relationship after the SWAp contract expired
but had failed to agree on a price.
The court concluded that immediately after the SWAp con-
tract 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 cir-
cumstances, it rejected Waste Connections’ defenses of waiver,
estoppel, and failure to mitigate.
(b) The Court’s Award Under
the Roll-off Contract
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 deter-
mined 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 plead-
ings, 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 was
unjustly enriched by the amount that it had received above
the rate of $42.50 per ton. It awarded the City $48,124.11 for
these overpayments.
III. ASSIGNMeNTS oF eRRoR
Waste Connections assigns that the district court erred
as follows:
(1) ruling that the expired SWAp contract controlled the dis-
posal rate under the roll-off contract;
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Cite as 282 Neb. 848

(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 reason-
able 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 con-
tract 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 dam-
ages 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.
IV. NATURe oF THe CITy’S CLAIMS
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’ argu-
ments 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.
1. implieD C ontraCtS verSuS
Q uaSi-C ontraCtS
[1-3] 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
856 	282 NebRASkA RepoRTS

been expressed in words. An implied contract arises where the
intention of the parties is not expressed but where the circum-
stances are such as to show a mutual intent to contract.1 If the
parties’ conduct is sufficient to show an implied contract, it is
just as enforceable as an express contract.2 A claim that the
parties created an enforceable contract generally presents an
action at law.3
[4] In contrast, a claim that a court should imply a promise
or obligation to prevent unjust enrichment is sometimes referred
to as an “implied-in-law contract” or a “quasi-contract.” A
quasi-contract is not a contract. These claims are distinct from
implied contract claims. Quasi-contract claims are restitution
claims to prevent unjust enrichment.4 Quasi-contractual obliga-
tions do not arise from an agreement. The law imposes them
when justice and equity require the defendant to disgorge a
benefit that he or she has unjustifiably obtained at the plain-
tiff’s expense.5 The defendant’s liability arises under the law
of restitution, not contract.6 In our analysis, the term “implied
contract” refers only to an “implied-in-fact contract.”
2. nature of Q uaSi-C ontraCt C laimS
[5] 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
1 See, Turner v. Fehrs Neb. Tractor & Equip., 259 Neb. 313, 609 N.W.2d
652 (2000); Kaiser v. Millard Lumber, 255 Neb. 943, 587 N.W.2d 875
(1999).
2 See Restatement (Second) of Contracts § 4 & comment a. (1981).
3 See, Donaldson v. Farm Bureau Life Ins. Co., 232 Neb. 140, 440 N.W.2d
187 (1989); Gard v. Pelican Publishing Co., 230 Neb. 656, 433 N.W.2d
175 (1988).
4 See 1 Dan b. Dobbs, Dobbs Law of Remedies § 4.2(3) (2d ed. 1993).
5 See, Professional Recruiters v. Oliver, 235 Neb. 508, 456 N.W.2d 103
(1990); Siebler Heating & Air Conditioning v. Jenson, 212 Neb. 830,
326 N.W.2d 182 (1982), quoting 66 Am. Jur. 2d Restitution and Implied
Contracts § 2 (1973); First Nat. Bank v. Fairchild, 118 Neb. 425, 225 N.W.
32 (1929); Dobbs, supra note 4, § 4.1(1).
6 Restatement (Third) of Restitution and Unjust enrichment § 1, comment a.
(2011).
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Cite as 282 Neb. 848

scope of review.7 As stated, quasi-contract claims are restitu-
tion claims. Historically, restitution, in different forms, devel-
oped separately in both courts of law and courts of equity.8
All quasi-contract claims developed out of the assumpsit form
of action, which a party brought in a court of law.9 So we
hold that any quasi-contract claim for restitution is an action
at law.10
3. C laimS preSenteD in C ity’S C omplaint
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, how-
ever, 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.11 As
stated, the City’s claim that the parties created an enforceable
contract is an action at law.12
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 Waste Connections to disgorge the City’s overpayments
that it had received.
7 See State ex rel. Wagner v. Amwest Surety Ins. Co., 274 Neb. 121, 738
N.W.2d 813 (2007).
8 See Dobbs, supra note 4, §§ 1.1 and 1.2.
9 See id., §§ 4.2(1) and 4.2(3).
10 See Restatement (Third) of Restitution and Unjust enrichment, supra
note 6, § 4, comments c. and d.
11 See Neb. Ct. R. pldg. § 6-1115(b).
12 See, Donaldson, supra note 3; Gard, supra note 3.
858 	282 NebRASkA RepoRTS

[6] We have held that
[a]n action in assumpsit for money had and received may
be brought where a party has received money [that] in
equity and good conscience should be repaid to another.
In such a circumstance, the law implies a promise on the
part of the person who received the money to reimburse
the payor in order to prevent unjust enrichment.13
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.14 And we have
stated several times that an assumpsit action for money had and
received is an action at law.15
because the City sought to disgorge overpayments to pre-
vent unjust enrichment, its allegations presented an assumpsit
claim for restitution16 under the alleged continuation of the
SWAp contract and the roll-off contract. And the court granted
restitution by imposing a quasi-contractual obligation. We con-
clude that the City’s purported separate theories of “implied
contract” and “unjust enrichment” claims presented a quasi-
contract claim, which is an action at law.
V. STANDARD oF ReVIeW
[7-9] In a bench trial of a law action, the trial court’s fac-
tual 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 favor-
able 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.17 but
13 In re Margaret Mastny Revocable Trust, 281 Neb. 188, 201, 794 N.W.2d
700, 711 (2011).
14 Restatement (Third) of Restitution and Unjust enrichment, supra note 6,
§ 1, comment b.
15 See, e.g., Kissinger v. Genetic Eval. Ctr., 260 Neb. 431, 618 N.W.2d 429
(2000).
16 See Fackler v. Genetzky, 257 Neb. 130, 595 N.W.2d 884 (1999).
17 See Hastings State Bank v. Misle, ante p. 1, 804 N.W.2d 805 (2011).
CITy oF SCoTTSbLUFF v. WASTe CoNNeCTIoNS oF Neb. 	859
Cite as 282 Neb. 848

we independently review questions of law decided by a lower
court.18 Contract interpretation presents a question of law.19
VI. ANALySIS
1. CHarGeS for D iSpoSal ServiCeS at tHe tranSfer
Station after tHe SWap C ontraCt expireD
(a) The parties Were Not bound by the Terms
of the expired SWAp Contract
Waste Connections argues that the court erred in conclud-
ing 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.
[10,11] When a plaintiff claims that a contract governs the
parties’ rights and obligations and, alternatively, that it is enti-
tled to restitution under a quasi-contract claim, a court should
address the contract claim first. We have held that a contract
claim will supersede a quasi-contract claim arising out of the
same transaction to the extent that the contract covers the sub-
ject matter underlying the requested relief.20 Stated differently,
restitution is subordinate to contract as an organizing prin-
ciple of private relationships: “[T]he terms of an enforceable
agreement normally displace any claim of unjust enrichment
within their reach.”21 So we first address the City’s claim that
the parties were continuing to perform their SWAp contract
obligations.
18 Johnson v. Johnson, ante p. 42, 803 N.W.2d 420 (2011).
19 See Brook Valley Ltd. Part. v. Mutual of Omaha Bank, 281 Neb. 455, 797
N.W.2d 748 (2011).
20 See Professional Recruiters, supra note 5.
21 Restatement (Third) of Restitution and Unjust enrichment, supra note 6,
§ 2, comment c. at 17.
860 	282 NebRASkA RepoRTS

The parties obviously could have agreed to extend the SWAp
agreement before it expired.22 but the contract did not provide
for automatic renewals, and the City concedes that it expired.
Whether they intended to be bound by a new contract with the
same terms presents a factual question, and, except in the clear-
est cases, the question is for the finder of fact to resolve.23
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?
[12,13] 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.24 A binding mutual understanding or meeting of the
minds sufficient to establish a contract requires no precise for-
mality 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.25
In limited circumstances, the parties’ failure to specify an
essential term does not prevent the formation of a contract. The
Restatement (Second) of Contracts26 provides that “the actions
of the parties may show conclusively that they have intended
to conclude a binding agreement, even though one or more
terms are missing or are left to be agreed upon.” The parties’
reference to an extrinsic standard can render an essential term
reasonably certain.27 Sometimes, a court can also ascertain
22 See, Pennfield Oil Co. v. Winstrom, 272 Neb. 219, 720 N.W.2d 886 (2006);
Moreland v. Transit Auth. of Omaha, 217 Neb. 775, 352 N.W.2d 556
(1984).
23 See Gerhold Concrete Co. v. St. Paul Fire & Marine Ins., 269 Neb. 692,
695 N.W.2d 665 (2005).
24 Id.
25 Id.
26 Restatement (Second) of Contracts, supra note 2, § 33, comment a. at 92.
27 See, Gerhold Concrete Co., supra note 23; Davco Realty Co. v. Picnic
Foods, Inc., 198 Neb. 193, 252 N.W.2d 142 (1977).
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the meaning of a party’s promise by referring to the parties’
course of dealing with each other, or a general reasonableness
standard.28
[14-16] but unless the parties have stated otherwise in an
express agreement, extrinsic standards can only provide a
basis for understanding a contract.29 The circumstances must
still show that the parties manifested an intent to be bound by
a contract. And their manifestations are usually too indefinite
to form a contract if the essential terms are left open or are so
indefinite that a court could not determine whether a breach
had occurred or provide a remedy.30 “The more important the
uncertainty, the stronger the indication is that the parties do not
intend to be bound[.]”31 As relevant here, if the parties’ mani-
festations or conduct shows that they do not intend to be bound
by a contract unless they agree upon the price for services and
they fail to agree, there is no contract.32
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 serv-
ices. 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 sta-
tion under an implied agreement to continue the terms of the
SWAp contract.
(b) An Implied Contract existed
for Temporary Services
Despite the court’s incorrect conclusion that the parties
were operating under the terms of the expired SWAp contract,
28 See Restatement (Second) of Contracts, supra note 2, § 33.
29 See, e.g., id., § 223.
30 See id., § 33.
31 Id., comment f. at 95.
32 See id., comment e.
862 	282 NebRASkA RepoRTS

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 conversa-
tions 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 testi-
fied 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 con-
tract expired, Waste Connections increased its rate at the trans-
fer 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 vol-
ume of waste without planning, and its negotiations with the
City showed that it was not treating the City as just another
customer. If that were true, in August 2007, it would have also
raised its price to $60 per ton for all customers. In sum, the
evidence showed that the parties negotiated for services, that
the City assented to Waste Connections’ price ($42.50 per ton),
and that an implied contract existed between the parties for
temporary disposal services at the transfer station.
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Cite as 282 Neb. 848

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.
(c) Standard of proof for
Quasi-Contract Claims
before reaching the merits of Waste Connections’ chal-
lenge 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 con-
structive fraud.33
[17] An action to impose a constructive trust is an equitable
action.34 In contrast, we do not impose a clear and convincing
burden of proof for fraud claims in actions at law.35 As dis-
cussed, a quasi-contract claim is an action at law. We recognize
that some courts have imposed a clear and convincing standard
of proof in actions to avoid a contract because of duress.36 but
the City was not seeking to avoid a contract. It was seeking to
recover an overpayment under a valid contract to prevent unjust
enrichment. Courts generally require proof by a preponderance,
or the “greater weight,” of the evidence for quasi-contract
33 See, Eggleston v. Kovacich, 274 Neb. 579, 742 N.W.2d 471 (2007), citing
Trieweiler v. Sears, 268 Neb. 952, 689 N.W.2d 807 (2004).
34 See Johnson v. Anderson, 278 Neb. 500, 771 N.W.2d 565 (2009).
35 See, Four R Cattle Co. v. Mullins, 253 Neb. 133, 570 N.W.2d 813 (1997);
Tobin v. Flynn & Larsen Implement Co., 220 Neb. 259, 369 N.W.2d 96
(1985).
36 See 28 Samuel Williston, A Treatise on the Law of Contracts § 71:10
(Richard A. Lord ed., 4th ed. 2003).
864 	282 NebRASkA RepoRTS

claims.37 We conclude that a preponderance standard is appro-
priate here.
(d) While the parties Were operating Under Their
Implied Contract, the City paid Waste
Connections’ $60-per-Ton Rate
Under economic Duress
Relying on our decision in Wrede v. Exchange Bank of
Gibbon,38 Waste Connections contends that the court erred in
failing to require the City to articulate a specific legal prin-
ciple underlying its theory of unjust enrichment. In Wrede,
we stated:
Although it appears we have not expressly so written
heretofore, there must be some specific legal principle
or situation which equity has established or recognized
to bring a case within the scope of assumpsit for money
had and received. . . . Stated otherwise, one who is
free from fault cannot be held to be unjustly enriched
merely because one has chosen to exercise a legal or con-
tract right.39
We have stated this rule in other cases since Wrede was
decided.40 but as we have explained, much of the law of resti-
tution developed in actions at law. So this rule is incorrect
to the extent that it implies that a restitution claim for unjust
enrichment is always an action in equity. As stated, an assump-
sit action for money had and received is a quasi-contract claim
for restitution, which presents an action at law. So the rule also
incorrectly implies that a plaintiff must advance an equitable
theory of recovery to prevail in an action at law.
[18] The confusion reflected in this rule stems from the
equitable nature of restitution liability even when it is imposed
37 See, e.g., Key Pontiac, Inc. v. Blue Grass Sav. Bank, 265 N.W.2d 906
(Iowa 1978); 66 Am. Jur. 2d Restitution and Implied Contracts §§ 87 and
164 (2011).
38 Wrede v. Exchange Bank of Gibbon, 247 Neb. 907, 531 N.W.2d 523
(1995).
39 Id. at 917, 531 N.W.2d at 530.
40 See, Kissinger, supra note 15; Kramer v. Kramer, 252 Neb. 526, 567
N.W.2d 100 (1997).
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Cite as 282 Neb. 848

in an action at law. It is also true that a court exercises its equi-
table 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 inde-
pendent basis of liability in common-law legal systems—com-
parable in this respect to a liability in contract or tort.”41 And
as explained, the origin of that liability could have been in an
action at law or equity. So we clarify our holding in Wrede as
follows: To recover under a theory of unjust enrichment, the
plaintiff must allege facts that the law of restitution would rec-
ognize as unjust enrichment.
[19] 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 enrichment42 clarifies that
its categories of unjust enrichment do not constitute an exclu-
sive list. but it is a bedrock principle of restitution that unjust
enrichment means a “transfer of a benefit without adequate
legal ground.”43 “[I]t results from a transaction that the law
treats as ineffective to work a conclusive alteration in owner-
ship rights.”44
[20] The issue here involves Waste Connections’ purported
unilateral modification of its agreement with the City for tem-
porary 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.45 but exceptions exist if the plaintiff shows that its
41 See Restatement (Third) of Restitution and Unjust enrichment, supra
note 6, § 1, comment a. at 3.
42 See Restatement (Third) of Restitution and Unjust enrichment, supra
note 6.
43 Id., § 1, comment b. at 6.
44 Id. at 5.
45 See, Malec v. ASCAP, 146 Neb. 358, 19 N.W.2d 540 (1945); Restatement
(Third) of Restitution and Unjust enrichment, supra note 6, § 6, com-
ment e.; 66 Am. Jur. 2d, supra note 37, § 92. Compare First Nat. Bank,
supra note 5.
866 	282 NebRASkA RepoRTS

consent was imperfectly voluntary, or ineffective, for a legally
recognized reason.46
[21,22] one of the exceptions to the voluntary payment
rule is duress.47 If a plaintiff’s overpayment to the defendant
was induced by duress, the plaintiff can seek restitution to
the extent that the defendant was unjustly enriched.48 The
Restatement (Third) of Restitution and Unjust enrichment
specifically includes restitution claims for performance in
excess of contractual requirements that result in the recipient’s
unjust enrichment:
(1) If one party to a contract demands from the other a
performance that is not in fact due by the terms of their
agreement, under circumstances making it reasonable to
accede to the demand rather than to insist on an imme-
diate test of the dispute obligation, the party on whom
the demand is made may render such performance under
protest or with reservation of rights, preserving a claim in
restitution to recover the value of the benefit conferred in
excess of the recipient’s contractual entitlement.49
[23] “Duress is coercion that is wrongful as a matter of law.”50
“Lawful coercion becomes impermissible when employed to
support a bad-faith demand: one that the party asserting it
knows (or should know) to be unjustified.”51 Coercion does
not include hard bargaining, but it can include circumstances
in which
the stronger party exploits the other’s vulnerability in a
manner that passes the bounds of economic self-interest.
Legitimate self-interest (and lawful coercion) encom-
passes the usual freedom to deal with another on one’s
46 See Restatement (Third) of Restitution and Unjust enrichment, supra note
6, ch. 2, Introductory Note. Compare Wendell’s, Inc. v. Malmkar, 225 Neb.
341, 405 N.W.2d 562 (1987).
47 See, Malec, supra note 45; First Nat. Bank, supra note 5.
48 See Restatement (Third) of Restitution and Unjust enrichment, supra note
6, § 14, and comment g.
49 Id., § 35(1) at 571.
50 Id., § 14(1) at 181.
51 Id., comment g. at 188.
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Cite as 282 Neb. 848

own terms or not at all. So long as the stronger party
is not responsible for the other’s vulnerability, driving a
hard bargain does not constitute duress. but the exploita-
tion of a superior bargaining position will predictably be
found wrongful when the stronger party seeks additional
leverage by exploiting a vulnerability to which the weaker
party (in dealing the stronger) is not properly subject.
. . . Threats to exercise what would normally be a legal
right may constitute duress when employed to achieve an
advantage unrelated to the interests that the legal right is
supposed to protect.52
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.”53 And we have clarified that
duress can occur even if the defendant had a legal right to take
a threatened action:
This rule has been stated in a form which arguably
implies that no threat is wrongful unless there would be
independent liability for the threatened act. . . . If the
implication was made, the rule was overstated. An unjust
and inequitable threat is wrongful, although the threat-
ened act would not be a violation of a duty in the sense
of an independent actionable wrong in the law of crimes,
torts, or contracts.54
[24] economic duress may be found in threats, or implied
threats, to cut off a supply of goods or services when the per-
forming party seeks to take advantage of the circumstances
that would be created by its breach of an agreement.55 We have
52 Id. at 190.
53 See McCubbin v. Buss, 180 Neb. 624, 627, 144 N.W.2d 175, 178 (1966).
54 Id. at 628, 144 N.W.2d at 178. Accord First Data Resources, Inc. v.
Omaha Steaks Int., Inc., 209 Neb. 327, 307 N.W.2d 790 (1981).
55 See, Restatement (Third) of Restitution and Unjust enrichment, supra note
6, § 14, comment g.; Restatement (Second) of Contracts, supra note 2,
§ 175, comment b.
868 	282 NebRASkA RepoRTS

applied the doctrine of economic duress in a case involving
circumstances similar to those in this appeal.
In Carpenter Paper Co. v. Kearney Hub Pub. Co.,56 a news-
paper publisher had a year-to-year contract with a distributor
to supply it with newsprint until either party canceled the con-
tract. The distributor later decided that it was more profitable
for it to purchase all the newsprint from its sole paper mill
source and sell it directly to its customers. As a direct seller,
the distributor increased its price per ton. The publisher paid
the increased price under protest until it could obtain supplies
from a different source. We agreed that it had no other practical
source for newsprint.
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 think the making of a contract may be done under
such circumstances of business necessity or compulsion
as will render the same involuntary and entitle the party
so coerced to recover back any money paid thereunder or
excuse him from performing the contract. . . . The same
would be true of an agreement obtained to cancel an
existing contract and to enter into a new one.57
[25] 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 agree-
ment itself must be unjust, unconscionable, or illegal.’”58 We
stated that the distributor had a right to sell the newsprint on
a more profitable basis unless it made “unjust demands upon
56 Carpenter Paper Co. v. Kearney Hub Pub. Co., 163 Neb. 145, 78 N.W.2d
80 (1956).
57 Id. at 151, 78 N.W.2d at 83-84.
58 Id. at 151, 78 N.W.2d at 84, quoting Newland v. Child, 73 Idaho 530, 254
p.2d 1066 (1953). Accord, Kosmicki v. State, 264 Neb. 887, 652 N.W.2d
883 (2002); First Data Resources, Inc., supra note 54.
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Cite as 282 Neb. 848

[the publisher] in view of all the circumstances then existing.”59
Under the new agreement, the distributor increased its price
by 4.6 percent over the direct mill price. We concluded that
this increase did not result in an unjust agreement: “We do
not find such a raise to be unjust, considering the increased
cost of doing business which occurred during these years, and
certainly not a factual situation which would permit the [pub-
lisher], on the grounds of business compulsion, to avoid the
effect of its agreement . . . .”60
[26] Under the Restatement’s principles, we believe that
these economic duress rules apply to modifications of a con-
tract also. but the facts here are different from those in
Carpenter Paper Co.
[27] Whether a plaintiff voluntarily or involuntarily made a
payment under a claim of right is a question of fact.61 The court
specifically found that the City was in a disadvantaged bargain-
ing position because it had to dispose of 40 tons of solid waste
each day. It specifically found that the City had no reasonable
alternative immediately available for disposing of its waste
except to pay Waste Connections’ $60-per-ton rate.
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 cir-
cumstances 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 exi-
gency that its denial of services would create by unjustifiably
increasing its price only for the City.
59 Carpenter Paper Co., supra note 56, 163 Neb. at 152, 78 N.W.2d at 84.
60 Id. at 153, 78 N.W.2d at 84.
61 See, Raintree Homes v. Village of Long Grove, 389 Ill. App. 3d 836, 906
N.e.2d 751, 329 Ill. Dec. 553 (2009); Crown Life Ins. Co. v. Smith, 657
So. 2d 821 (Ala. 1994); Speckert v. Bunker Hill Arizona M. Co., 6 Wash.
2d 39, 106 p.2d 602 (1940). See, also, Kosmicki, supra note 58, citing
Lustgarten v. Jones, 220 Neb. 585, 371 N.W.2d 668 (1985).
870 	282 NebRASkA RepoRTS

In contrast to the 4.6-percent price increase that we con-
sidered 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 sta-
tion 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 person-
nel 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 explana-
tions 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 justifica-
tion for its price increase.
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Cite as 282 Neb. 848

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 to Waste Connections’ claim that the court incorrectly
determined the restitution award.
(e) Court’s Restitution Award Was Correct
Waste Connections contends that even under the City’s
unjust enrichment claim, the court erred in requiring it to dis-
gorge 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 conclud-
ing 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 previ-
ous 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
872 	282 NebRASkA RepoRTS

economic self-interest.62 but we conclude that this reasoning
does not apply when a plaintiff has proved that its assent to
a unilateral modification of an implied contract was obtained
under duress.
[28] 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.63 but a modification of an existing contract
that substantially changes the liability of the parties requires
mutual assent.64 That assent may be express or implied.65 but
a weaker party’s assent to a unilateral contract modification,
which is to that party’s disadvantage, should obviously not be
implied from its conduct when the weaker party has shown that
its assent was obtained through economic duress. Without any
new consideration or negotiations for the modification, a court
should not analyze whether the defendant’s profit from the
duress was reasonable.
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.
[29] The measure of restitution is normally a defendant’s
unjust gain.66 When a party to a contract shows that because of
duress, it agreed under protest to the other party’s demands for
overperformance of its obligation, it may seek restitution for
“the value of the benefit conferred in excess of the recipient’s
contractual entitlement.”67 So the court correctly determined
that the City was entitled to recover its involuntary payments
62 See Restatement (Third) of Restitution and Unjust enrichment, supra
note 6, § 14, comment g.
63 See, e.g., Pennfield Oil Co., supra note 22.
64 See, e.g., Whorley v. First Westside Bank, 240 Neb. 975, 485 N.W.2d 578
(1992).
65 See Waite v. A. S. Battiato Co., 238 Neb. 151, 469 N.W.2d 766 (1991).
66 See Smeal Fire Apparatus Co. v. Kreikemeier, 279 Neb. 661, 782 N.W.2d
848 (2010).
67 Restatement (Third) of Restitution and Unjust enrichment, supra note 6,
§ 35(1) at 571.
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Cite as 282 Neb. 848

that were over the City’s contractual obligation to pay $42.50
per ton after the SWAp contract expired. We affirm its restitu-
tion award for these overpayments.
because 	the 	City 	protested 	the 	charges 	under 	circum-
stances that showed it was reasonable for it to accede to
Waste Connections’ demand, the court properly rejected Waste
Connections’ waiver and estoppel claims.68
2. priCe of ServiCe unDer tHe
roll-off C ontraCt
(a) parties’ Contentions
The court concluded that because the roll-off contract incor-
porated 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 obli-
gated 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
68 See id.
874 	282 NebRASkA RepoRTS

value of Waste Connections’ disposal services was $42.50
per ton.
(b) parties Created a binding Contract
[30] 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.69
Nor will a court rewrite a contract or speculate as to terms of
the contract which the parties have not seen fit to include.70 It
is not the province of a court to rewrite a contract to reflect the
court’s view of a fair bargain.71 but this is 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.
In their written roll-off contract, the parties agreed on the
services to be performed through April 30, 2008. before that
term expired, however, the parties had stated in writing their
intent to continue performing their obligations under the con-
tract until July 2008. So the contract was modified to include
the longer term. The roll-off contract also contained a term
for the price by incorporating the rate charged under the
SWAp 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
69 Kubicek v. Kubicek, 186 Neb. 802, 186 N.W.2d 923 (1971).
70 Davenport Ltd. Partnership v. 75th & Dodge I, L.P., 279 Neb. 615, 780
N.W.2d 416 (2010).
71 Berens & Tate v. Iron Mt. Info. Mgmt., 275 Neb. 425, 747 N.W.2d 383
(2008).
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roll-off contract. Here, the question is what rule governs the
gap-filling that the omission in their contract requires.
(c) Court Could Supply a Reasonable
Term to Cover the Gap
[31] 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 reason-
able in the circumstances is supplied by the court.”72 As this
case illustrates, this rule does not apply when the parties’ mani-
festations or conduct show that they do not intend to be bound
unless they agree upon a term and they fail to agree. but we
agree with this rule, and adopt it, for circumstances showing
that the parties to a binding contract have failed to negotiate a
term to cover a future contingency.
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.
[32] 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.”73 but a court should not engage in a
hypothetical bargaining analysis if applying interpretative prin-
ciples shows that the parties did not agree on a contract term
necessary to determining their rights and duties. In that circum-
stance, it must supply a term that “comports with community
standards of fairness and policy.”74
72 Restatement (Second) of Contracts, supra note 2, § 204 at 96-97.
73 See id., comment c. at 97.
74 See id., comment d. at 98.
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[33] We reject Waste Connections’ contention that because a
nonnegotiated contingency occurred, Waste Connections could
charge the City whatever it wished. Such a term would obvi-
ously be contrary to the implied covenant of good faith and fair
dealing that every contract carries.75 Good faith performance
excludes an “abuse of a power to specify terms.”76
but here, neither the agreed-upon terms of the roll-off
contract nor the circumstances would permit a court to find
the parties had a tacit agreement on the price to use for this
contingency. The evidence showed that the parties entered the
roll-off contract under the assumption that the rate under the
roll-off contract would be the same as the rate under the SWAp
contract. by the time the SWAp contract expired, however, they
clearly did not agree on the price of disposal services.
Nonetheless, for the period that the parties’ implied agree-
ment 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 sup-
plying 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 con-
sidered to be a fair price in the absence of a long-term commit-
ment 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
75 See RSUI Indemnity Co. v. Bacon, ante p. 436, 810 N.W.2d 666 (2011).
76 Restatement (Second) of Contracts, supra note 2, § 205, comment d.
at 101.
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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 bar-
gaining 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’ serv-
ices on remand, the court may consider the fair market value
of disposal services in the region when Waste Connections’
services were rendered.77 This factor could include the price
that Waste Connections was charging to other municipalities
in the area for comparable services. The court should also con-
sider whether its solution treats the parties evenhandedly given
their objectives.78
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.”79 As applied here,
this factor permits the court to consider the profit margin that
Waste Connections had previously considered reasonable under
the parties’ roll-off contract and whether its increased fuel costs
were affecting that margin.
77 See, Sachau v. Sachau, 206 N.J. 1, 17 A.3d 793 (2011); KW Const. v.
Stephens & Sons Concrete, 165 S.W.3d 874 (Tex. App. 2005).
78 See Browning-Ferris Industries v. Casella, 79 Mass. App. 300, 945 N.e.2d
964 (2011).
79 Restatement (Second) of Contracts, supra note 2, § 204, comment d.
at 98.
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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.80
VII. CoNCLUSIoN
We conclude that the parties did not intend to be bound
by the terms of their expired SWAp contract. but we con-
clude 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 overpay-
ments under the implied contract.
Under the parties’ roll-off contract, we conclude that the par-
ties formed a binding agreement despite their failure to negoti-
ate 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’ serv-
ices 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.
80 See Borley Storage & Transfer Co. v. Whitted, 271 Neb. 84, 710 N.W.2d
71 (2006).
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