## Facts

- Fields Excavating, Inc. (Fields) purchased ductile iron pipe from Clow Water Supply/Clow Water Systems Company (Clow) over a long commercial relationship.
- Fields and Clow executed a written credit agreement governing Fields’ purchases.
- The credit agreement required modifications to be in writing (a no-oral-modification term).
- The agreement also included a nonwaiver/antiwaiver term providing that a waiver or failure to enforce once would not waive enforcement for later breaches.
- Over the years, Fields claimed that some Clow pipe was defective (including pipe that was “out-of-round” or did not fit together properly), causing Fields extra labor, equipment, and related project costs.
- On multiple prior occasions, Fields submitted invoices to Clow seeking reimbursement for those defect-related costs, and Clow—after negotiation—paid the invoices (at least in whole on one project and in part on another).
- On a later project, Fields submitted a similar extra-cost invoice tied to alleged pipe defects, but Clow refused to pay.
- Fields sued Clow’s corporate parent, McWane, Inc. (McWane), claiming Clow’s repeated prior payments created and then breached a course-of-performance modification (or waiver) that required reimbursement of defect-related costs.
- The trial court enforced the written agreement’s no-oral-modification and antiwaiver terms and granted summary judgment for McWane.
- Fields appealed to the Ohio Court of Appeals, Twelfth Appellate District.

## Issues

1. Whether Clow’s repeated payment of Fields’ defect-related invoices could create a genuine issue of material fact that the parties modified the written agreement, or that Clow waived enforcement of contract terms, despite no-oral-modification and antiwaiver language.
2. Whether the trial court erred by treating the no-oral-modification and antiwaiver provisions as dispositive as a matter of law and entering summary judgment for McWane.

## Decision

- The court of appeals reversed the summary judgment for McWane and remanded.
- The court held that, on this record, Clow’s prior negotiations and payments of similar defect-related invoices could allow a factfinder to conclude that Clow waived or modified the written terms through the parties’ course of performance.
- The court ruled that the existence and effect of waiver or modification by conduct presented fact questions not appropriate for resolution on summary judgment.

## Legal Principles

- Under Ohio’s UCC, a “course of performance” between the parties may be used to interpret their agreement and may support findings of modification or waiver based on how the parties actually performed over repeated occasions.
- A contract term requiring written modifications does not automatically foreclose proof that the parties later changed their arrangement through conduct; waiver or modification may be shown by performance and acquiescence.
- A nonwaiver/antiwaiver clause is relevant evidence, but it does not automatically eliminate the possibility that a party’s repeated conduct surrendered contractual protections in practice.
- Whether a no-oral-modification clause or an antiwaiver clause has itself been waived by the parties’ actions is generally a question of fact.
- Summary judgment is improper when evidence, viewed most favorably to the nonmoving party, could lead reasonable factfinders to different conclusions about waiver or modification.

## Conclusion

Because Fields presented evidence that Clow had repeatedly negotiated and paid prior defect-related invoices before refusing a similar later invoice, the court of appeals held that a factfinder could find waiver or a course-of-performance modification notwithstanding the contract’s written-modification and nonwaiver terms, so summary judgment for McWane was reversed and the case was remanded.


Fields Excavating, Inc. v. McWane, Inc., 2009 WL 3721013 (2009)