98 So. 3d 449
Miss.2012Background
- Precision Welding provided hourly construction services to Denbury Onshore under an oral, hourly-rate contract from 2002–2006.
- The contract had no written end date or defined quantity of work; both parties understood work would continue as needed.
- Denbury terminated Precision in July 2006 after discovering misdeeds by Precision’s employees, at a stage where Barksdale I was partially complete and Barksdale II had not begun.
- Precision sued for tortious interference, breach of good faith, and other claims, but trial focused on breach of contract and good faith/breach claims.
- The jury awarded Precision $1,500,000, but the trial court denied post-trial motions; the court of appeals reversed and remanded for a new trial on reasonable notice, holding the contract was terminable at will.
- The court held the oral contract was for hourly labor with indefinite duration, thus terminable at will; it remanded for a jury to decide reasonable notice and, if none, damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is there a valid oral contract for hourly labor? | Precision asserts an oral contract existed for hourly rates. | Denbury contends no contract existed beyond an open-ended agreement to hire at hourly rates. | Yes; a valid contract existed for hourly labor. |
| Was the contract indefinite in duration and terminable at will? | The contract should be construed as requiring ongoing work. | The contract lacked a definite end date and amount of work, making it terminable at will. | Yes; contract was indefinite and terminable at will. |
| Did Precision receive reasonable notice of termination? | Reasonable notice was provided under the circumstances. | Reasonable notice was not required if the contract was terminable at will, or not properly given. | Remand for trial on reasonable notice; the issue to be decided by the jury. |
| Are damages recoverable for lack of reasonable notice? | Damages proximately caused by improper termination should be recoverable. | Damages depend on whether reasonable notice was provided. | If jury finds lack of reasonable notice, damages may be awarded; otherwise not. |
| Was Denbury's termination tainted by bad faith/fair dealing? | Denbury acted in bad faith by terminating over unrelated issues. | Termination was within rights of an indefinite, at-will contract. | No separate ruling on this issue due to remand on notice. |
Key Cases Cited
- American Chocolates, Inc. v. Mascot Pecan Co., Inc., 592 So.2d 93 (Miss.1991) (contracts for indefinite periods terminable on reasonable notice; objective standard to determine definiteness)
- Deer Creek Constr. Co., Inc. v. Peterson, 412 So.2d 1169 (Miss.1982) (reasonable time implied when no time for performance is given)
- Leach v. Tingle, 586 So.2d 799 (Miss.1991) (price may be inferred when mathematically deducible; open terms may be filled by reasonable standards)
- Duke v. Whatley, 580 So.2d 1267 (Miss.1991) (option/first-refusal contexts require specific price; otherwise default rules apply)
- Natchez Elec. & Supply Co. v. Johnson, 968 So.2d 358 (Miss.2007) (recites standard for evaluating contract terms and notice)