ÿWPCï “ˆ /#j'¸¥£ª=Þ1ºÌàýÓgב)C«ŸÿÜ#Cwlgy<'–ñûÅ€l°íѧ¯È ©iêq$§…3†äÈý1ß ~c%E„üXSÍ›*vÛ?ìšg щzð—2±÷Ò‹º…É×zÚ(B‚õy_Ï e7¾š2Ì?Îü3ŸO¥èjGyòtÀ8þî7 š¿à¢ã`sñàõ”¨„6Ä+C âTxÉ;œ'9”ZéD¨ëüm½AÏõÂA‹æØ½5?á7_‘èaÌÀç•`# @UNK %™ 0(Ÿw@Ç4  * D bL bT J\ 0P¦ Jö 0z@ 0dº 0R Jp 0Lº  0X -f b“ b• 0X™ ñ U:ô .U:111 AQkƼ 0D‚‚ 0DÆÆ D/   B9 D3VVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVV B‰‰‰‰‰‰‰‰‰ 0D¦¦¦¦¦¦¦¦¦ Aê D?i BG¨˜HP LaserJet 4SiHPPCL5MS,ü,,,,,ü0nLlÎ(ÖÃ9 Z ‹6Times New Roman RegularX($¡¡ •D–D—D˜D™Dš›IœÓ€§Õcl&tttttt3|x«waiver- ù--2-c:\office\wpwin\template\opinion.wpt((3/Q$««Ý ƒ!ÝÝ  ÝÔ d Ôc:\office\wpwin\template\opinion.wpt((*2êî$¤¤Ý ƒ!ÝÝ  ÝÓ  Óà  àòòÚ  Ú0Ú  Úóó€€(Wf|$ÄÄò òòòà@ìì*ìàÔ  ÔÔ AÔó óóó(WÙë$ÅÅò òòòÔ  ÔÔ Ôó óóóc:\office\wpwin\template\opinion.wpt(WV $ÆÆò òÔ  ÔÔ Ôó ó(_7©$ÇÇà0  àò òÔ  ÔÔ 8Ôó ó #Ñ#€Xÿÿd#Ñ2(_¸Ç$ÈÈà0  àòòÔ  ÔÔ 8Ôóó ùÝ ƒ"¯"ÝÝ  ÝÔ€X¬X XXXÔÔ€3f  XX¬XÔÓ  Óò òÔ Ad ÔFILEDÔ€X¬X X 3fÔÐ  ÐÌMarch€25,€1999ÌÌCecil€Crowson,€Jr.ÌAppellate€Court€ClerkÔdAhÔó ó,c½¬AZ‹"Arial Regular ùÝ ƒ"¯"ÝÝ  ÝÔ€X¬X XXXÔÔ€3f  XX¬XÔÓ  Óò òÔ Ad ÔFILEDÔ€X¬X X 3fÔÐ  ÐÌMarch€25,€1999ÌÌCecil€Crowson,€Jr.ÌAppellate€Court€ClerkÔdAhÔó ó,c½¬AZ‹"Arial Regular!"T$&Cþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 5(3¯$¢¢Ý ƒ!ÝÝ  Ý($$””ò òÚ  Ú1Ú  Úó ó(('÷ÿ dxdüÿP PdKKKK'ÿÿdxd d(3¯$££Ý ƒ!ÝÝ  ÝTyúÿ  <<= 8fæÿÿÿÿÿÿÿÿÿÿCÿÿ____3 TripledxdCTriple 1+| d d dÝ ƒ!ÝÝ  ÝÒ€°ÒÒ„°ÒÔ‡¼ X¼XXÔÓ'€Ð‡Xè“X°œX'ÓÑTR[¤ AØ'ÿ Legal3Ø' AØ'ÿ Legalÿ3Ø'TÑÑ  ÑÑ€úÑñ§ñññßr€ )<,(j 8` `€€@Eô±` 8ttxP,°ð  rßñññ§ññ§ññ§ñFREDERIC›€R.€HARRIS,€INC.,à 8 àà  à)à è àÐ ° Ðà Ø àà 0 àà ˆ àà à àà 8 àà  à)ÌÓ6€ü(‚X˜‘X€Ð‡Xè“X6Óñ§ñœßt€ )>.*jxÆÜ` `€€@Eº¬` 8ttxPòäð È tß›ñ§ñà Ø àPlaintiff/Appellant,à  à)à  àAppeal€No.Ð Ð  Ðà Ø àà  à)à  àœ01„A„01„980ñ™ñ2ñ™ññšñ3ñšñ„CH„00ñ›ñ082›ñ›ññœñ130ñœñÐ à0 Ðv.à Ø àà  à)Ð ð@ Ðà Ø àà  à)à  àDavidson€ChanceryÐ  P ÐTHE€METROPOLITAN€à  à)à  àNo.€95„537„IIÐ  ` ÐGOVERNMENT€OF€NASHVILLEà  à)Ð  p Ðand€DAVIDSON€COUNTY,à  à)Ð 0 € ÐTENNESSEE,à  à)Ð @  Ðà Ø àà  à)Ìà Ø àDefendant/Appellee.à  à)à  àÐ `°  Ðà Ø àà  à)ÌÌÌÔ#†X6"X¼¼ X7#ÔÔ‡»Œ[ »XX6"ÔÓ  ÓCOURT€OF€APPEALS€OF€TENNESSEEÐ  ð ÐÌÌAPPEAL€FROM€THE€CHANCERY€COURT€FOR€DAVIDSON€COUNTY,ÌÌAT€NASHVILLE,€TENNESSEEÌÌÌTHE€HONORABLE€CAROL€L.€McCOY,€CHANCELLORÌÓ9°,X‚Xì“X€ü(‚X˜‘X9ÓÌÌÌÌÌÓ  ÓPETER€H.€CURRYÌTuke€Yopp€&€SweeneyÌNationsBank€Plaza,€Suite€1100Ì414€Union€StreetÌNashville,€Tennessee€€37219ÌÔ#†X6"X »»Œ[°#Ôà Ø àÔ€¼ X¼XX6"ÔATTORNEY€FOR€PLAINTIFF/APPELLANTÐ Ð( $" ÐÌÌJOHN€L.€KENNEDYÌMetropolitan€AttorneyÌThe€Department€of€Law€of€TheÌMetropolitan€Government€ofÌNashville€and€Davidson€CountyÌ204€Metropolitan€CourthouseÌNashville,€Tennessee€€37201Ìà Ø àATTORNEY€FOR€DEFENDANT/APPELLEEÌÌÓ  ÓÌÌREVERSED€AND€REMANDEDÌÌññÑúÑÑ7€6"XXdìXXdì7ÑÑ  ÑÑúÑÑ#€Xÿÿd#ÑÑ  ÑññÌññÑúÑÑ7€6"XXdìXXdì7ÑÑ  ÑññÓ  ÓWILLIAM€B.€CAIN,€JUDGEÐ à:063d ÐÑúÑÑ7€6"XXdìXXdì7ÑÑ  ÑññÑúÑÑ7€_XXdìXXdì7ÑÑ  ÑññÔ‡„¹ „¼¼ XÔÓ  ÓòòO€P€I€N€I€O€NÐ ° ÐóóÌÓ€ÓÓ  Óà Ø àÔ#†¼ X¼„„¹ . #ÔFrederic€R.€Harris,€Inc.€(FRH),€formerly€PRC€Engineering,€Inc.,€enteredÐ pÀ Ðinto€a€contract€with€the€Metropolitan€Government€of€Nashville€and€DavidsonÏCounty€(Metro),€whereby€FRH€agreed€to€provide€computer€design€services€toÏMetro€on€a€cost„plus„fee€basis.€€FRH€promised€to€provide€engineering€services€forÏthe€design€and€implementation€of€a€Computerized€Traffic€Signal€System€forÏMetro.€€The›€original€contract,€dated€October€21,€1985,€œprovided›€for€theÏcompensation€and€performance€of€one€ð ðSystem€Design€Phaseðð€with€an€option€toÏcontinue€the€relationship€over€five€additional€phases.€œ€The›€eventual€goal€was€thatÏthis€new€system€would€utilize€a€special€type€of€software€to€control€traffic€at€fiveÏhundred€and€fifty€(550)€intersections€throughout€the€city€of€Nashville.€€ÌÌI.€€Contract€TermsÌà Ø àThe€documents€executed€by€the€parties€contained€ten€general€articles€andÏone€exhibit€denominated€ð ðScope€of€Services.ðð€€Among€those€general€provisions,ÏArticles€6,€7€and€10€are€of€particular€importance€to€the€resolution€of€the€issueÏbefore€us.ÌÌà Ø àThey€read€in€pertinent€part:Ìà8 Ø àò òòòArticle€6.€€Limitation€of€Costó óóóÐ $p&Ø ü!Ø ü! ÐÓ6€ü(‚X¸ è“X°,X‚Xì“X6ÓÓ€Óà8 Ø àà0¸ Ø ü!Ø ü!àà Ø àA.à ¸ àIt€is€estimated€that€the€total€cost€to€the€CLIENT,€exclusive€ofÐ µ%!( Ðany€fixed€fee,€for€the€performance€of€work€pursuant€to€thisÏagreement,€shall€not€exceed€THREE€HUNDRED€FORTY„¼TWO€THOUSAND,€FOUR€HUNDRED,€TWENTY„FOURÏDOLLARS€($342,424.00).€€This€amount€reflects€the€estimatedÏcosts€for€the€SYSTEM€DESIGN€PHASE€„€CONTRACT€ITEMÏ1€as€detailed€in€the€attached€Scope€of€Services€(Exhibit€A).Ð ¸ ü!¸ ü! ÐÌà8 Ø àThe€CONTRACTOR€agrees€to€exert€its€best€efforts€to€perform€theÏwork€as€specified€in€Exhibit€A,€ð ðScope€of€Services,ðð€and€allÏobligations€under€this€Agreement€within€such€estimated€costs.€œ€If›€atÏany€time€the€CONSULTANT€has€reason€to€believe€that€the€costs€toÏbe€incurred€against€this€Agreement€within€the€next€succeeding€sixtyÏ(60)€days,€when€added€to€all€costs€previously€incurred,€exclusive€ofÏany€fixed€fee,€will€be€substantially€greater€or€less€than€the€estimatedÏtotal€costs€set€forth€in€this€Article€6,€the€CONSULTANT€shall€notifyÏthe€CLIENT€in€writing€to€that€effect,€giving€the€revised€estimate€ofÏsuch€total€cost€for€the€performance€of€this€Agreement.Ð Ø ü!Ø ü! Ð̜Рå955; Лà8 Ø àà0¸ Ø ü!Ø ü!àà Ø àB.à ¸ àThe€CLIENT€shall€not€be€obligated€to€reimburse€theÐ ° ÐCONSULTANT€for€costs€incurred€in€excess€of€the€estimatedÏcost€set€forth€in€this€Article€6,€unless€and€until€the€CLIENTÏshall€have€notified€the€CONSULTANT€in€writing€that€suchÏestimated€cost€has€been€increased€and€shall€have€specified€inÏsuch€notice€a€revised€estimated€cost€which€shall€thereuponÏconstitute€the€estimated€cost€of€this€Agreement.Ð ¸ ü!¸ ü! ÐÌÓ  Ó*€€€*€€€*ÌÓ  Óà8 Ø àò òòòArticle€7.€€Paymentó óóóÐ@ Ø ü!Ø ü! ÐÌà8 Ø àà0¸ Ø ü!Ø ü!àà Ø àA.à ¸ àFor€the€performance€of€this€Agreement,€the€CLIENT€shall€payÐ ^®  Ðthe€CONSULTANT€allowable€costs€in€accordance€with€theÏterms€and€conditions€as€set€forth€above.€€In€addition€to€theÏpayments€for€œallowable›€costs€as€hereinbefore€provided,€theÏCLIENT€agrees€to€pay€the€CONSULTANT€the€sum€ofÏTHIRTY„FOUR€THOUSAND,€TWO€HUNDRED€FORTY„¼TWO€DOLLARS€($34,242.00),€and€it€is€agreed€and€understoodÏthat€this€will€constitute€full€compensation€to€theÏCONSULTANT€for€fixed€fee€covering€all€services€and€workÏrequired€by€the€contract€items€covered€under€this€AgreementÏunless€such€amount€shall€be€amended€in€writing€by€theÏCLIENT.Ð ¸ ü!¸ ü! ÐÌà8 Ø àà0¸ Ø ü!Ø ü!àà Ø àB.à ¸ àOnce€each€month,€the€CONSULTANT€shall€submit€to€theÐ .~ ÐCLIENT€a€certified€invoice€for€allowable€costs€incurred€in€theÏperformance€of€this€Agreement.Ð ¸ ü!¸ ü! ÐÌÓ€ÓÓ  Ó€*€€€*€€€*ÌÓ€ÓÓ  Óà8 Ø àòòò òArticle€10.€€General€Provisionsó óóóÐ$VØ ü!Ø ü! ÐÌà8 Ø àThe€following€general€provisions€are€incorporated€herein€and€madeÏa€part€hereof:Ð Ø ü!Ø ü! ÐÌÓ9€ü(‚X¸ z @’X€ü(‚X¸ è“X9Óà8 Ø àà8¸ Ø ü!Ø ü!àà0z ¸  ¸  àà ¸ àA.à z àòòChangesóó.€€The€parties€hereto€may€from€time€to€timeÐ T)¤$# Ðrequire€changes€in€the€Scope€of€services€and€the€timeÏof€performance€as€set€forth€herein.€€Such€changes,Ïincluding€any€increase€or€decrease€in€the€amount€ofÏthe€compensation€to€the€CONSULTANT,€which€areÏmutually€agreed€upon€by€and€between€the€partiesÏhereto,€shall€be€incorporated€as€written€amendmentsÏto€this€Agreement.€€Any€claim€by€theÏCONSULTANT€for€an€adjustment€under€this€clauseÏmust€be€asserted€within€thirty€(30)€days€from€the€dateÏof€the€receipt€by€the€CONSULTANT€of€theÏnotification€of€change;€provided,€however,€that€theÏCLIENT€may,€if€equity€is€obtained,€receive€and€actÏupon€any€such€claim€asserted€at€any€time€prior€toÏfinal€payment€under€this€Agreement.Ð z  z   ÐÐ D9”42 ÐÓ€ÓThe€phases€of€this€agreement€were€divided€into€tasks€and€subtasks.€€Phase€I,€TaskÏA,€was€designated€as€System€Design.€Of€particular€importance€are€the€subtasks€ofÏTask€A,€which€read€as€follows:ÌÓ€?ÓÌà8 Ø àò òòòSubtask€A.2.€€Functional€Designó óó󀄀The€control€system€to€beÐ ˆ Ø Ðprovided€shall€be€based€on€UTCS€concepts,€in€particular€the€UTCSÏEnhanced€software.€€However,€design€tasks€to€adapt€the€UTCSÏconcepts€for€the€Metro€Nashville€and€Davidson€County€system€shallÏbe€performed€by€[FRH].Ð Ø ü!Ø ü! ÐÌÓ  Ó*€€€*€€€*ÌÓ  ÓÌÓ  Óà8 Ø àò òòòSubtask€A.3.€€Computer€System€Designó óó󀄀The€tradeoff€shall€beÐ  \ Ðmade€of€alternate€computer€configurations€for€the€Metro€System€forÏboth€the€initial€implementation€phases€and€expanded€(550)€systemÏconfigurations.€€The€configurations,€which€[FRH]€shall€consider,Ïshall€be€based€on€the€basic€UTCS€control€concepts.€€The€UTCSÏsoftware€and€any€special€functions,€such€as€EVRP,€shall€beÏexamined€and€their€requirements€translated€into€computerÏrequirements.Ð Ø ü!Ø ü! ÐÌÌà8 Ø àMajor€trade€off€considerations€shall€includeÐ Ø ü!Ø ü! Ðà Ø àà ¸ àð-ðà z àSpeedÐ À Ðà Ø àà ¸ àð-ðà z àStorage€capacityÐ Ð  Ðà Ø àà ¸ àð-ðà z àInstruction€repertoireÐ à 0 Ðà Ø àà ¸ àð-ðà z àI/O€capacityÐ ð!@ Ðà Ø àà ¸ àð-ðà z àPeripheral€complementÐ #P Ðà Ø àà ¸ àð-ðà z àProtective€operating€proceduresÐ $` Ðà Ø àà ¸ àð-ðà z àProduct€line€status€(previous€usage)Ð  %p  Ðà Ø àà ¸ àð-ðà z àReliabilityÐ 0&€!! Ðà Ø àà ¸ àð-ðà z àCostÐ @'"" Ðà Ø àà ¸ àð-ðà z àMaintenance€serviceÐ P( ## ÐÌÌÓ€ÓIn€addition€to€representing€the€key€portions€of€the€contract€in€this€courtððsÏestimation,€the€above€citations€exemplify€the€far„reaching€and€comprehensiveÏscope€of€the€agreement€of€the€parties€with€regard€to€the€design€and€implementationÏof€a€computerized€traffic€control€system.€ÌÌII.€€Contractual€Relationship€and€System€LimitationsÌà Ø àThe€record€reveals€that,€although€this€contractual€relationship€began€withÏmuch€hope€and€anticipation€for€the€new€computerized€signal€system,€UTCSÏEnhanced€software€was€not€what€either€party€to€the€agreement€had€hoped€it€wouldÏbe.€€With€the€onset€of€the€personal€computer€age,€the€mainframe„based€softwareÐ Ø9(58 Ðdesigned€by€Honeywell,€Inc.,€proved€ill€fit€for€the€task€of€managing€the€trafficÏsignals€of€large€U.S.€cities.€€Cities€across€the€country€attempting€to€implement€theÏUTCS€Enhanced€software€had€reported€extensive€problems€with€regard€to€theÏfunctionality€of€the€œsystem.€›€The€deposition€of€Mr.€Gregor€reveals€that€as€early€asÏNovember€of€1988,€both€parties€became€aware€of€limitations€as€to€the€number€ofÏintersections€that€could€be€governed€by€the€system.€€Says€Mr.€Gregor:ÌÓ€Óà8 Ø àà ¸ àQ.à z àAnd€when€did€the€City€first€become€aware€that€there€wereÐ @  Ðlimitations€inherent€to€the€UTCS€program?Ð Ø ü!Ø ü! Ðà Ø àà8 ¸ àA.à z àIt€would€have€been€either€late€1988€or€early€1989.Ð`° ¸ t"¸ t" Ðà8 Ø àà ¸ àQ.à z àOkay.€€In€response€to€interrogatories€in€this€case,€the€cityÐ pÀ  Ðindicated€that€they€were€verbally€made€aware€in€November€of€ðð88.€ÏDoes€that€sound€about€right?Ð Ø ü!Ø ü! Ðà8 Ø àà ¸ àA.à z àI€believe€the€word€approximately€was€used.РðØ ü!Ø ü! Ðà8 Ø àà ¸ àQ.€à z àRight.€€And€to€whom€was€that€awareness€conveyed?Ð°Ø ü!Ø ü! Ðà8 Ø àà ¸ àA.à z àThe€consultant€convened€a€meeting€with€us€in€Mr.Ð À ÐHarperððs€office,€and€I€was€there,€and€Mr.€Harper€was€there,€I€believeÏElvis€was€there.€€I€was,€in€spite€of€my€best€efforts,€unable€to€findÏmeetings€„„€the€notes€for€it,€and€thatððs€why€I€couldnððt€give€you€theÏexact€date€of€that€meeting€happened.Ð Ø ü!Ø ü! Ðà8 Ø àà ¸ àQ.à z àAnd€who€else€was€there?€€You,€Mr.€Harper,€Mr.€Moore?Ð`Ø ü!Ø ü! Ðà8 Ø àà ¸ àA.à z àRight.€€The€consultants,€of€course.€€I€believe€Ken€Keitt€wasÐ  p Ðthere€on€behalf€of€the€consultant.€€Again,€without€my€notes,€I€donððtÏremember€exactly€who€was€there.Ð Ø ü!Ø ü! Ðà8 Ø àà ¸ àQ.à z àOkay.€€And€what€did€the€consultants€say€at€that€meeting?ÐP  Ø ü!Ø ü! Ðà8 Ø àà ¸ àA.à z àBasically€they€conveyed€that€they€were€having€problemsÐ `!° Ðwith€UTCS,€that€they€had€hit€an€internal€limit€of€about€240Ïintersections€and€that€was€causing€them€problems,€and€they€felt€thatÏthey€needed€to€drop€the€UTCS€and€go€to€a€different€concept,€whichÏwould€have€been€a€customized€development€approach.€€And€theyÏconveyed€that€they€could€do€that€within€the€contract.Ð Ø ü!Ø ü! Ðà8 Ø àà ¸ àQ.à z àAnd€what€do€you€mean€they€conveyed€that€they€could€doÐ À'#$ Ðit€within€the€contract.Ð Ø ü!Ø ü! Ðà8 Ø àà ¸ àA.à z àMy€œunderstanding›€was€that€there€was€going€to€be€noÐ à)0%& Ðadditional€cost€to€the€government.Ð Ø ü!Ø ü! ÐÓ€¦*ÓÌÓ€ÓÌÓ€Óà Ø àThe€concerns€discussed€in€that€meeting€were€addressed€again€in€a€1991Ïletter€from€FRHððs€Systems€Engineering€Director€to€George€C.€Harper,€ExecutiveÏDirector€and€Secretary€of€the€Metro€Traffic€and€Parking€Commission.€€That€letterÏoutlined€FRHððs€proposed€œapproach›€to€fulfilling€the€obligations€of€the€originalÏ1985€agreement€as€follows:€ÌÓ€Óà8 Ø àFaced€with€the€objective€of€developing€an€expandable€softwareÏpackage€that€could€control€an€ultimate€system€size€of€550Ïintersections,€and€interact€with€additional€system€enhancements€(i.e.Ïcolor€graphics,€multi„terminal€access,€etc.),€FRH€exhaustivelyÐ Ð9 58 Ðpursued€expansion€of€the€ENHANCED€UTCS€package€until€forcedÏto€adopt€a€major€course€correction€in€the€Nashville€SystemÏImplementation.€€This€consisted€of€embarking€on€an€independentÏdevelopment€of€a€completely€new€control€software€package€whichÏwould€be€free€from€the€Enhanced€UTCSððs€size€limitation€whileÏproviding€substantially€all€of€its€functional€capabilities.€€TheÏmagnitude€of€effort€associated€with€such€major€softwareÏdevelopment€programs€is€usually€measured€in€manyears.Ð Ø ü!Ø ü! ÐÌà8 Ø àIn€conclusion,€in€order€to€accomplish€this€task,€Frederic€R.€HarrisÏincurred€time,€manhour,€and€direct€costs€far€in€excess€of€what€couldÏbe€estimated€if€the€size€limitations€of€the€Enhanced€package€had€beenÏclearly€documented€in€FHWA€release€manuals.€€These€factors€wereÏclearly€beyond€the€control€of€Frederic€R.€Harris€who€sustainedÏdiligent€prosecution€of€project€work€in€good€faith.Ð Ø ü!Ø ü! ÐÌÌÓ€Óà Ø àThe€record€below€shows,€consistent€with€the€aforementioned€letter€andÏ1988€meeting,€that€beginning€in€1988,€FRH,€Inc.€incurred€expenses;€the€record,Ïhowever,€is€unclear€as€to€what€portion€of€the€expenses€in€question€went€toÏdeveloping€new€software€and€what€portion€financed€the€ill„fated€attempt€to€tailorÏEnhanced€UTCS€for€the€Nashville€System.€€The€parties€below€agree€that€theÏexpenses€connected€with€this€attempted€customization€are€the€very€subject€of€thisÏdispute.€€It€further€appears€from€the€conduct€of€the€parties€here,€that€the€bulk€ofÏthese€expenses€in€issue€were€probably€incurred€prior€to€December€31,€1991,€whenÏFRH€submitted€the€sixth€change€order,€requesting€reimbursement€in€the€amountÏof€$287,028.81.€œ€Almost›€two€years€later,€May€12,€1993,€George€Harper,€theÏTraffic€and€Parking€Commission€Chairman,€informed€FRH,€that€œ$122,ñ‹ñ€ñ‹ñ673›€ofÏthose€costs€had€been€approved€and€that€FRH€was€to€submit€a€change€order€forÏpayment.€œ€This›€approval€was€made€conditional€upon€Metroððs€acceptance€of€theÏsystem€and€its€unrestricted€use€of€the€software.€€For€the€purposes€of€summaryÏjudgment,€however,€both€parties€stipulated€below€that€œFRH,›€Inc.ððs€duties€under€theÏcontract€had€all€but€been€completed.€€Although€Metro€did€stipulate€for€the€purposeÏof€summary€judgment€that€FRH,€Inc.€had€agreed€to€Metroððs€unrestricted€use€of€theÏcustomized€software,€Metro€did€dispute€FRHððs€allegation€that€Metro€had€finallyÏaccepted€the€system.€€Metro€terminated€the€contract€for€the€convenience€of€theÏgovernment€pursuant€to€Art.€10,€section€D.€of€the€contract€February€7,€1994.€€TheÏchange€order€submitted€by€FRH€was€never€signed€by€the€Purchasing€Agent,ÏDirector€of€Finance€and€the€Mayor.€€At€the€Summary€Judgment€Proceeding€below,Ïand€at€all€points€in€the€proceeding€here,€Metro€has€urged€that€since€the€sixthÐ Ð9 5= Ðchange€order€was€not€so€signed€pursuant€to€Metro€Code€ðð€4.24.020,€FRHððs€claimÏfor€expenses€incurred€prior€to€that€change€order€cannot€be€recovered.€€TheÏgovernment€argues€that€the€change€order€sought€modification€of€an€existingÏfinancial€liability€and€that€payment€thereof€without€approval€of€the€PurchasingÏAgent,€Director€of€Finance€and€Mayor€would€be€an€ultra€vires€act.€€òòCity€ofÐ  ` ÐLebanon€v.€Baird,€756€S.W.2d€236,€244€œ(Tenn.ñ‘ñ€ñ‘ñ1988);óó›€òòLaidlaw€Envtl.€Servs.€ofÐ ¨ ø  ÐSouth€Carolina,€Inc.€v.€Metropolitan€Govððt.€of€Nashville€and€Davidson€County,Ð @  ÐóóNo.òò€óó01A01-9610-CH-00479,€1997€WL€706614€œ(Tenn.ñ’ñ€ñ’ñCt.ñ“ñ›€ñ“ñApp.›€Nov.€14,€1997).€Ð Ø(  ÐThe€court€below€found,€based€on€òòLaidlawóó€that€the€execution€of€a€change€order€wasÐ pÀ  Ðnecessary€to€bind€Metro.€€This€court€is€of€the€opinion€that€òòLaidlawóó€is€œdistinguishñ”ñ„Ð X Ðñ”ñable›€from€the€case€at€bar€on€its€facts.ÌÌà Ø àLaidlaw€Environmental€Services€of€South€Carolina,€Inc.€(Laidlaw),Ïcontracted€with€Metro€regarding€the€removal€of€fly€ash€generated€by€the€NashvilleÏThermal€Transfer€Plant.€€The€original€contract€terms€required€Laidlaw€to€removeÏonly€15„25€tons€of€ash€per€day,€with€a€15„ton€minimum€charge€paid€by€Metro.€ÏWhen€it€became€apparent€to€both€parties€that€the€contract€was€not€meeting€MetroððsÏneeds,€the€parties€attempted€a€modification.€œLaidlaw,›€*2.€€œ"Laidlaw's€estoppelÏargument€was€premised€on€what€it€characterized€as€a€city€employee'sÏ'interpretation'€of€a€written€contract.€€We€held€that€the€purported€interpretation€wasÏactually€an€oral€contract€modification€that€was€barred€by€Metropolitan€Code€ððÏ4.24.020."€€The€terms€of€the€contract€in€òòLaidlawóó€were€clear€and€unambiguous.€Ð (&x!* ÐòòLaidlaw,€*6.€€óóIn€the€case€at€bar,€however,€the€contracting€parties€allowed€for€theÐ À'#, Ðelastic€nature€of€their€relations€by€contracting€on€a€cost„plus„fee€basis€where€costsÏwere€estimated€and€subject€to€change.€€In€the€plain€language€of€the€contract,€FRHÏand€METRO€allowed€for€certain€ð ðtrade„offsðð€regarding€Enhanced€UTCSÏadaptation.€€The›€parties€admit€that€the€majority€of€the€costs€requested€in€the€sixthÏchange€order€were€incurred€prior€to€submission€of€the€proposed€change€order.€€AsÏsuch,€the€cost€term€in€FRHððs€contract€is€distinguishable€from€the€unambiguousÏlanguage€in€Laidlawððs€agreement.€œ€Metro›€is€actually€doing€in€this€case€what€theÏcontractor€òòclaimed€óóMetro€did€inòò€Laidlawóó.€€Since€we€distinguish€the€contract€inÐ €4Ð/< ÐòòLaidlawóó,€we€remove€œthe›€major€barrier€to€estoppel€which€existed€in€that€caseòò.Ð 6h1> ÐÌœóóññÐ H9˜4B ÐññIII.›€Ultra€Vires,€Estoppel€and€Executed€ContractsÌœà Ø àThe€Supreme€Court€of€Tennessee€has€held:ÌÓ€Óà8 Ø à›Under€Tennessee€law,€a€municipal€action€may€be€declared€òòultra€viresóóÐ à0 Ðfor€either€of€two€reasons:€€(1)€because€the€action€was€wholly€outsideÏthe€scope€of€the€city's€authority€under€its€charter€or€a€statute,€or€(2)Ïbecause€the€action€was€not€undertaken€consistent€with€the€mandatoryÏprovisions€of€its€charter€or€a€statute.€€thus,€the€law€recognizes€aÏdifference€between€the€existence€of€a€municipal€power€and€theÏmanner€or€mode€of€exercising€municipal€power€legitimately.€ÏòòCompare€City€of€Chattanooga€v.€Tennessee€Electric€Power€Co.óó,€172Ð P   ÐTenn.€524,€112€S.W.2d€385€(1938)€(existence€of€power)€òòwithÐ `°  ÐRutherford€v.€City€of€Nashvilleóó,€168€Tenn.€499,€79€S.W.2d€581Ð pÀ  Ð(1935)€(manner€of€exercise).€€As€this€Court€observed€in€òòMemphisÐ €Ð  ÐStreet€Ry.€Co.€v.€Rapid€Transit€Co.óó,€138€Tenn.€594,€607„608,€198Ð à ÐS.W.€890,€893€(1917),€"[i]t€is€to€be€observed€that€.€.€.€power€existedÏin€the€municipality€to€[do€the€act]€in€question,€but€it€was€limited€orÏqualified€as€to€the€mode€of€exercise.€€So€it€is€in€the€case€underÏreview;€power€to€act,€proceeding€properly,€was€not€lacking,€but€theÏlimitations€on€its€exercise€were€not€regarded."Ð Ø ü!Ø ü! Ðà8 Ø àà ¸ àWhen€a€municipality€has€no€power€whatsoever€to€do€an€act,€thatÏany€attempt€to€undertake€such€action€is€òòultra€viresóó€is€readily€seen;€theÐ P Ðmore€difficult€question€is€the€consequences€of€a€city's€failure€to€doÏan€authorized€act€in€the€manner€prescribed€by€its€charter€or€by€theÏstatute€under€which€it€is€attempting€to€act.€€In€some€cases,€if€the€CityÏdoes€an€act€that€does€not€comply€with€the€law€controlling€the€mannerÏin€which€it€is€to€be€done,€the€city€will€be€estopped€from€denying€theÏvalidity€of€its€act€for€equitable€considerations€arising€on€the€facts€ofÏthe€particular€case,€òòLawrence€County€v.€Whiteóó,€200€Tenn.€1,€8,€288Ð p"À ÐS.W.2d€735,€738€(1956),€usually€because€the€city€has€accepted€theÏbenefits€of€an€act€it€induced€another€to€perform,€òòe.g.,€Brown€v.€CityÐ $à Ðof€Manchesteróó,€722€S.W.2d€394,€397„398€(Tenn.App.1986),€orÐ  %ð  Ðbecause€the€city€induced€a€detrimental€act€of€another,€òòe.g.,€BledsoeÐ °&"! ÐCounty€v.€McReynoldsóó,€703€S.W.2d€123,€145„125€(Tenn.1985).ÐÀ'#"Ø ü!Ø ü! Ѐ€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€*€*€*Ìà8 Ø àà ¸ àUltimately,€the€application€of€estoppel€or€implied€contract€mustÏbe€determined€on€the€facts€and€equities€of€the€particular€case.€€TheÏprinciples€of€estoppel€are€well€settled€and€not€every€case€will€requireÏapplication€of€estoppel€or€of€implied€contract.€€The€classic€case€ofÏestoppel€in€the€present€context€is€the€acceptance€of€the€benefits€of€aÏcontract€and€the€subsequent€refusal€of€a€city€to€pay€for€the€benefitsÏreceived.€€òòSee,€e.g.,€Trull€v.€City€of€Lobelvilleóó,€554€S.W.2d€638,€641„Ð @0+* Ð642€(Tenn.App.1976).Ð Ø ü!Ø ü! МÌòòCity€of€Lebanon€v.€Baird,óó€756€S.W.2d€236,€241„42,€244€(Tenn.1988).Ð p3À.- ÐÌ̛ӀÓà Ø àThe€courts€of€this€state€have€long€recognized€that€a€city€may€be€estoppedÏfrom€asserting€the€ultra€vires€nature€of€an€act€if€the€aggrieved€contractor€can€showÏthat€the€ultra€vires€contract€is€partially€or€fully€executed.€œòò€Mayor›€and€City€CouncilÐ Ð9 54 Ðof€Nashville€v.€óóHagan,€68€Tenn.€495,€507€(1876);€Cityòò€of€Lebanon€v.€Bairdóó,€756Ð ° ÐS.W.2d€236,€244€œ(Tenn.ñ•ñ€ñ•ñ1988);›€òòTrull€v.€City€of€Lobelvilleóó,€554€S.W.2d€638,€641„42Ð H˜ М(Tenn.Ct.App.ñ–ñ€ñ–ñ1976).›€€This€well€settled€rule€of€equity€and€common€sense€cannotÏbe€avoided€when€a€municipality€contracts€for€a€benefit,€receives€and€retains€it,€andÏthen€refuses€to€compensate€the€contractor€for€that€benefit€solely€because€the€cityÏfailed€to€follow€its€own€procedures€with€regard€to€the€compensation.€ÌœÌ›IV.€€Termination€for€the€Convenience€of€the€ClientÌà Ø àIt€bears€noting€that€Metro€terminated€this€contractual€relationship€underÏsection€10.D€of€the€contract€with€FRH.€€That€œsection€reads€in€pertinent€part:ÌÓ€Óà8 Ø à›D.à ¸ àòòTermination€for€Convenience€of€Clientóó.€€The€CLIENT€mayÐ  ð Ðterminate€this€Agreement€at€any€time€by€giving€written€notice€to€theÏCONSULTANT€of€such€termination€and€specifying€the€effectiveÏdate€thereof,€at€least€fifteen€(15)€days€before€the€effective€date€ofÏsuch€termination.€€In€that€event,€all€finished€or€unfinished€documentsÏand€other€materials€shall,€at€the€option€of€the€CLIENT,€become€itsÏproperty.€€If€this€Agreement€is€terminated€by€the€CLIENT€asÏprovided€herein,€the€CONSULTANT€will€be€paid€incurred€cost€forÏcompleted€or€partially€completed€work,€plus€a€pro€rata€portion€of€theÏFixed€Fee.Ð Ø ü!Ø ü! ÐÌÓ€ÓThis€section€of€the€contract€clearly€states€that€some€amount€is€owed€to€FRH€uponÏtermination€for€the€convenience€of€the€government.€€Metro€seems€to€argue€that€theÏplain€unambiguous€language€of€subsection€D€of€the€contract€is€trumped€by€ððÏ4.24.020,€which€states€in€pertinent€part:ÌÓ€Óà8 Ø àà ¸ àA.à z àApproval€by€purchasing€agent.€€Before€any€change,Ð °&"' Ðrevision€or€modification€shall€be€made€in€any€contract€requiring€theÏexpenditure€of€money€or€the€relinquishment€of€rights€or€privilegesÏby€the€metropolitan€government,€such€change,€revision€or€alterationÏshall€be€approved€by€the€purchasing€agent.€€The€purchasing€agentÏshall€disapprove€any€change,€revision€or€alteration€of€such€contract,Ïif€in€his€opinion,€the€best€interests€of€the€metropolitan€governmentÏrequire€that€a€new€procurement€be€initiated€for€the€items€included€inÏthe€proposed€change€or€modification.€€The€mayor€shall€make€theÏfinal€determination€if€the€director€of€any€affected€departments,Ïcommission,€board€or€agency€objects€to€the€decision€of€theÏpurchasing€agent.Ð Ø ü!Ø ü! Ðà8 Ø àà ¸ àB.à z àApproval€by€Mayor€and€director€of€law.€€Any€change,Ð p3À.3 Ðrevisions€or€alterations€of€contracts,€deeds,€leases€or€otherÏinstruments€in€writing€in€which€the€metropolitan€government€isÏconcerned€shall€be€approved€by€the€department€of€law,€as€providedÏby€section€8.602(e)€of€the€Metropolitan€Charter,€and€shall€be€signedÏby€the€mayor.Ð Ø ü!Ø ü! Ðà8 Ø àœÐÐ9 59Ø ü!Ø ü! Ðà8 Ø à›à ¸ àC.à z àAvailability€of€Funds.€€Where€any€change,€revision€orÐ ° Ðalteration€of€a€contract€in€which€the€metropolitan€government€isÏconcerned€requires€an€expenditure€of€money€the€director€of€financeÏor€his€designee€must€approve€the€change.€€Funds€must€be€availableÏor€obtainable€by€means€authorized€in€the€Charter€or€in€ordinances.€Ï(Ord.€92„210€ðð€1€(6„102),€1992).Ð Ø ü!Ø ü! ÐÌÓ€ÓTo€œapplyññinterpretññ›€a€statute€which€covers€modifications€of€contract€duties€to€a€contractÏwhich€seeks€only€the€satisfaction€of€existing€duties€seems€to€strain€the€plain€intentÏof€both.€€Metro€and€FRH€provided€the€methods€of€termination€in€their€agreement.€ÏMetro€chose€the€method€by€which€it€must€now€live€and€pay.€€The€question€of€howÏmuch€costs€it€must€pay€is€clearly€a€question€of€fact€for€the€court€below€to€addressÏon€remand.ÌÌà Ø àSince€this€case€is€here€on€appeal€from€the€grant€of€summary€judgment,€ourÏburden€is€clear.€€We€must€determine,€viewing€the€record€below€in€the€light€mostÏfavorable€to€the€non„movant,€whether€a€material€issue€of€fact€exists€which€wouldÏpreclude€entry€of€judgment€for€the€movant.€œòò€See›€Byrd€v.€Hallóó,€847€S.W.2d€208,Ð ` Ð210„211€œ(Tenn.ñ—ñ€ñ—ñ1993).›€œ€The›€de€novo€review€of€summary€judgment€on€appealÏentails€no€presumption€of€correctness.€€òòCity€of€Tullahoma€v.€Bedford€Countyóó,€983Ð @ ÐS.W.2d€408,€412€œ(Tenn.ñ˜ñ€ñ˜ñ1997).›€€The€finding€below€centered€only€on€theÏapplication€of€òòLaidlawóó€to€the€undisputed€facts€regarding€the€change€order.€€TheÐ p"À# Ðcourt€below€did€not€delve€into€the€course€of€dealing€of€the€parties,€nor€whether€theÏbenefits€of€this€arrangement€were€actually€retained€under€circumstances€whichÏwould€make€it€unfair€for€FRH€to€go€œuncompensated.€›€Thus,€it€is€not€necessary€forÏthis€court€to€address€the€accuracy€of€FRHððs€alleged€costs€under€the€contract.€€NorÏis€it€necessary€to€decide€the€appropriateness€of€Metroððs€offer€to€settle€the€costÏissue.€€It€is€enough€to€state€that€œthe€contract€between€FRH€and€Metro€was€withinÏthe€power€of€Metro€to€authorize.€€It€is€a€question€of€material€fact€whether€or€notÏthe€contract€on€the€part€of€FRH€is€partially€executed€or€fully€executed€in€mattersÏrelating€to€change€order€number€six.€€òòLaidlawóó€is€not€applicable€and€summaryÐ È0,5 Ðjudgment€was€inappropriate.ÌÌà Ø àThe€order€of€the€court€below€granting€summary€judgment€to€theÏMetropolitan€Government€of€Nashville€and€Davidson€County€is€therefore€reversedÏand€the€cause€remanded€for€a€trial€on€the€merits.€€Costs€on€appeal€are€taxed€againstÐ À84? Ðthe€city.€ÌÌÓ?€ü(‚X¸ z À˜‘X€ü(‚X¸ z @’X?ÓÓ€ÓññÌññà Ø àà ¸ àà z àà À àÌà Ø àà ¸ àà z àà À à________________________________________›Ìà Ø àà ¸ àà z àà À àœWILLIAM›€B.€CAIN,€JUDGEÌœÌÌ›ÌÌCONCUR:̛̜Ì____________________________________ÌBEN€H.€CANTRELL,€P.J.,€M.S.ÌÌÌ____________________________________ÌWILLIAM€C.€KOCH,€JR.,€JUDGEÌÌà Ø àà ¸ à