Background
AHA Mechanical Contractors (“Contractor”) agreed to replace the HVAC system at Riverview K-8 School under a contract with Shelby County Board of Education (“SCBE”). The contract’s Scope of Work required that the concrete base for the new cooling tower be “reviewed and verified to meet load & current code criteria.” The contract did not define “load,” specify which building codes applied, or state who bore responsibility for such verification.
After the contract was signed, SCBE and Contractor disputed what this language required. Contractor modified the existing concrete base (filling it with crushed concrete and reinforcing it with steel), but its engineer, Marshall Davis, declined to certify that the modified base met all load and code requirements. In October 2020, Davis wrote only that the “as-built condition meets the overall design intent”—language SCBE argued fell short of the contractual requirement. After SCBE sent three letters demanding explicit engineer verification, SCBE terminated the contract in January 2021, claiming breach. Contractor sued for unlawful termination; SCBE counterclaimed for $61,540 in temporary cooling costs and attorney’s fees.
The trial court granted SCBE’s motion for summary judgment and awarded $52,421 in attorney’s fees. Contractor appealed, arguing that contract ambiguities and factual disputes precluded summary judgment.
The Court’s Holding
The Tennessee Court of Appeals reversed, holding that summary judgment was improper because the contract language is ambiguous and the parties’ parol evidence creates genuine disputes of material fact. The court noted that the contract neither defined “load” nor specified which “current code criteria” applied. The engineer’s October 2020 letter—stating only that the as-built condition met “overall design intent” rather than explicitly certifying compliance with load and code requirements—created genuine ambiguity about whether it satisfied the contract’s verification requirement.
The court emphasized that when contract language is ambiguous and parol evidence demonstrates factual disputes, summary judgment must be reversed even if one party argues the other failed to comply. The contract, drafted by SCBE, must be interpreted against the drafter when ambiguous. The extensive communications between the parties—including emails, letters, and engineer reports—created genuine factual issues about what the parties actually intended and whether Contractor’s performance satisfied the original contract terms versus subsequently imposed demands.
Key Takeaways
- Ambiguous contract language that fails to define key terms (“load,” “current code criteria”) creates questions of fact unsuitable for summary judgment resolution.
- An engineer’s certification that work meets “overall design intent” may be insufficient to satisfy a contractual requirement for verification that a foundation meets specific “load and code criteria” when the terms are undefined.
- Parol evidence of parties’ communications, site visits, and post-signing demands can create genuine disputes of material fact, precluding summary judgment on breach claims.
- Contracts drafted by one party are construed against that drafter when ambiguous, particularly in construction agreements where field conditions may require clarification.
Why It Matters
This decision reinforces that contract ambiguities—especially undefined critical terms in construction agreements—survive summary judgment and must proceed to trial. SCBE, as the contract drafter, bore the burden of clarity. Here, SCBE demanded engineer verification of the concrete base but neither the original IFB nor the contract itself specified which structural engineer, which code standards, or what form of verification was required. The fact that SCBE’s own director of construction clarified the requirement in an October 2020 email (rather than in the original contract) created a factual question about whether this constituted a unilateral contract modification or interpretation of ambiguous original terms.
For construction professionals, this case underscores that vague specifications like “meet load and current code criteria” invite litigation when field conditions require modifications. Contractors should seek written clarification of critical specifications before performance begins, while owners should draft precise performance requirements upfront and obtain written consent for any field changes. The court’s reversal signals that even a school board’s post-termination summary judgment motion cannot avoid trial when the underlying contract language is genuinely ambiguous and the parties’ conduct creates factual disputes about compliance.