Utah Court of Appeals
Can oral cost-plus contracts be enforceable despite indefinite pricing? Electrical Contractors v. Westwater Farms Explained
Summary
Westwater Farms contracted orally with Electrical Contractors for construction services on a cost-plus basis but failed to pay the full amount owed. The district court granted summary judgment for ECI after deeming ECI’s statement of facts admitted due to Westwater’s inadequate opposition response under Rule 7.
Analysis
Background and Facts
In September 2010, Westwater Farms entered into an oral contract with Electrical Contractors, Inc. (ECI) for general and electrical contracting services on a cost-plus basis for a water disposal system project. ECI provided approximately $1,028,849 in services but received only $152,061.24 in payments. When ECI sued for breach of contract, Westwater opposed summary judgment by arguing the oral contract was too indefinite to be enforceable because it lacked specific pricing and work details.
Key Legal Issues
The primary issues were whether an oral cost-plus contract with indefinite terms could be legally enforceable, and whether Westwater properly disputed ECI’s statement of material facts under Rule 7 of the Utah Rules of Civil Procedure. The court also addressed whether exhibits attached to ECI’s complaint created genuine issues of material fact and whether the parol evidence rule applied.
Court’s Analysis and Holding
The Utah Court of Appeals affirmed the district court’s grant of summary judgment. The court held that a contract may be enforced even with missing terms if the essential terms are not so uncertain that there is no basis for determining whether the agreement was kept or broken. Here, the parties agreed ECI would serve as general and electrical contractor with a clear cost-plus payment structure including specific markup percentages. The court found these essential terms were sufficiently definite to create an enforceable contract.
Regarding procedural issues, the court noted that Westwater failed to properly dispute ECI’s statement of facts under Rule 7, resulting in those facts being deemed admitted. The court also rejected Westwater’s parol evidence rule argument since there was no integrated written contract between the parties to which the rule would apply.
Practice Implications
This decision demonstrates that cost-plus contracts can be enforceable even without predetermined total costs, provided the essential terms and calculation methods are clear. Practitioners should ensure that when opposing summary judgment, they strictly comply with Rule 7 requirements by providing verbatim restatements of controverted facts with proper explanations and citations. The case also reinforces that district courts are not obligated to search the record for evidence supporting factual disputes when parties fail to properly raise them.
Case Details
Case Name
Electrical Contractors v. Westwater Farms
Citation
2016 UT App 60
Court
Utah Court of Appeals
Case Number
No. 20141166-CA
Date Decided
March 31, 2016
Outcome
Affirmed
Holding
An oral cost-plus contract with essential terms established is enforceable even without a precise price, and parties must properly dispute material facts under Rule 7 to avoid summary judgment.
Standard of Review
Summary judgment reviewed for correctness; denial of motion to file supplemental documents reviewed for abuse of discretion
Practice Tip
When opposing summary judgment, ensure your response complies with Rule 7 by providing verbatim restatements of controverted facts with explanations and citations to supporting materials.
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