Utah Court of Appeals
Can contract provisions be modified by implication after signing? Mardesich v. Sun Hill Homes Explained
Summary
Homeowners sued their builder after pool construction caused settling problems, claiming the builder had a duty to investigate soil suitability. The trial court initially ruled for homeowners but granted builder’s motion for new trial, finding the purchase contract explicitly placed responsibility for future improvements on the homeowners.
Analysis
The Utah Court of Appeals addressed important questions about contract modification and risk allocation in Mardesich v. Sun Hill Homes, providing guidance on when parties can successfully claim implied modifications to written agreements.
Background and Facts
The Mardesichs purchased a home from Sun Hill Homes under a Real Estate Purchase Construction Contract (REPC) that included an express provision releasing the builder from liability for “future improvements by Buyer, including walls, fencing, grading, landscaping or excavation work” unless properly engineered. After flooding, the builder added substantial soil to the property. When the homeowners later built a pool that experienced settling problems due to unsuitable soil conditions, they sued the builder, claiming breach of the REPC.
Key Legal Issues
The central issues were whether the builder had a contractual duty to investigate soil suitability for the homeowners’ future pool construction, and whether the parties had modified the REPC’s express risk allocation provision after adding soil to the property.
Court’s Analysis and Holding
The Court of Appeals affirmed the trial court’s grant of a motion for new trial in favor of the builder. The court emphasized that paragraph 14.3 of the REPC explicitly placed responsibility for proper engineering of future improvements on the homeowners. Regarding the claimed modification, the court applied the principle that valid contract modification requires “a meeting of the minds of the parties, which must be spelled out, either expressly or impliedly, with sufficient definiteness.” The homeowner’s subjective “understanding” that the entire yard would be suitable for improvements fell far short of establishing mutual assent to modify the express contractual provision.
Practice Implications
This decision reinforces that courts will not imply contract terms when the agreement explicitly addresses the disputed issue. Practitioners should note that contract interpretation favors express provisions over claimed implied duties, and parties seeking to prove contract modification must present clear evidence of mutual agreement rather than unilateral expectations or understandings.
Case Details
Case Name
Mardesich v. Sun Hill Homes
Citation
2017 UT App 33
Court
Utah Court of Appeals
Case Number
No. 20150730-CA
Date Decided
February 24, 2017
Outcome
Affirmed
Holding
A real estate purchase contract provision that explicitly assigns responsibility for proper engineering of future improvements to the buyer cannot be modified without clear evidence of mutual assent to the modification.
Standard of Review
Abuse of discretion for the motion for new trial; correctness for questions of law underlying the ruling
Practice Tip
When challenging contractual risk allocation provisions, ensure you have clear evidence of mutual assent to modification rather than relying on one party’s subjective understanding.
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