IN THE SUPREME COURT OF IOWA

No. 13–0253

Filed November 7, 2014

SHELBY COUNTY COOKERS, L.L.C., an Iowa Limited Liability

Company,

Appellee,

vs.

UTILITY CONSULTANTS INTERNATIONAL, INC., a Michigan

Corporation,

Appellant.

On review from the Iowa Court of Appeals.

Appeal from the Iowa District Court for Shelby County, James M. 

Richardson, Judge.

A utility bill review consultant seeks further review after the 

district court and court of appeals both concluded the consultant’s 

short-lived contract with a bacon producer was a contract for services 

terminable at will. COURT OF APPEALS DECISION VACATED;

DISTRICT COURT DECISION REVERSED AND CASE REMANDED.

M. Brett Ryan of Watson & Ryan, P.L.C., Council Bluffs, for 

appellant.

James G. Powers and April N. Hook of McGrath North Mullin & 

Kratz, P.C. L.L.O., Omaha, Nebraska, for appellee.
2

HECHT, Justice.

Hoping to reduce its expenses, a company contracted with a 

consultant whose business is reviewing utility bills and pursuing refunds

of overpayments. The company terminated the contract after the 

consultant reviewed four utility bills and informed the company it was 

entitled to a substantial refund for sales tax overpayments. The 

company sought a declaratory judgment establishing it had no remaining 

contractual obligation to the consultant, and the consultant 

counterclaimed for breach of contract. The district court determined the 

company’s liability under the contract was limited to services the 

consultant provided prior to termination and dismissed the consultant’s 

counterclaim on the ground no payment was owed to the consultant 

until the company actually receives a refund. The consultant appealed, 

and the court of appeals affirmed. We granted the consultant’s 

application for further review.

I. Background Facts and Proceedings.

The following facts are supported by substantial evidence in the 

summary judgment record. Utility Consultants International, Inc. (UCI)

conducts utility billing reviews for its customers searching for errors or 

overpayments that might lead to refunds or other savings. In late July 

2011, Shelby County Cookers, LLC (SCC) received an unsolicited phone 

call from Jackie Tanguay, a representative of UCI. Troy Schaben, SCC’s 

plant controller, took the call. Tanguay told Schaben about UCI’s 

services and offered to perform a utility review for SCC.1 

1During this telephone call, Tanguay did not reveal that UCI’s billing reviews 

commonly scrutinized customers’ utility bills for sales tax overpayments. She explained 

generally to Schaben that UCI could review SCC’s utility bills and search for any 

possible errors.

 
3

Schaben expressed interest in UCI’s services during the initial 

phone conversation with Tanguay, but no contract for services was 

formed that day. Tanguay and Schaben had additional telephone 

conversations over the next several days. Tanguay urged Schaben to 

send to UCI copies of SCC’s utility bills covering a period of three 

months. Tanguay proposed that UCI would perform a “free preliminary 

review” of the bills. Schaben agreed to UCI’s proposal, sending four of 

SCC’s utility bills to Tanguay.2 

In early August 2011, Tanguay contacted Schaben again, 

indicating UCI had completed its preliminary review of the four SCC 

utility bills. Tanguay informed Schaben that the preliminary review led 

UCI to conclude it could obtain “a large refund” for SCC. During this 

conversation, Tanguay did not specify the source or anticipated amount 

of the potential refund, nor did she explain the process through which a 

refund could be pursued.

On August 9, 2011, Schaben signed UCI’s form contract, 

indicating he did so as SCC’s plant controller. UCI’s president, David 

Dawson, signed the contract for UCI. The contract provides, in its 

entirety:

This agreement authorizes UTILITY CONSULTANTS 

INTERNATIONAL, INC. to pursue refunds and bill 

reductions, on your behalf, on your utility billings. 

If UTILITY CONSULTANTS INTERNATIONAL, INC. is 

successful in obtaining a refund(s) for your company(ies), 

you[r] fee obligation is 50% of the refund(s). Payable only if 

and when a credit has been applied to your account or a 

check has been issued to you. The future cost reductions, 

as defined by when the utility adjusts your account(s) strictly 

accrue to you.

2The record does not explain why Schaben actually sent only four bills to UCI, 

instead of bills for the previous three months as Tanguay requested.

 
4

If you accept our money saving proposal, please sign where 

indicated.

Thank you,

UTILITY CONSULTANTS INTERNATIONAL, INC.

After UCI received the signed contract from SCC, Tanguay called 

Schaben and requested that SCC transmit copies of its utility bills for the 

previous thirty-six months.3 During this conversation, Tanguay first 

disclosed to Schaben the reason for the potential refund: overpayments 

of sales taxes detected in SCC’s utility bills.4 It is undisputed that SCC 

did not know it had a claim for a refund of sales tax overpayments until 

Tanguay disclosed the information to Schaben after the parties formed 

their contract.

Upon learning UCI’s review had revealed a potential refund claim, 

Schaben notified SCC’s secretary and treasurer, Bradley Poppen. 

Poppen instructed Schaben not to release more information to UCI until 

SCC clarified the scope of UCI’s services. When Tanguay called later to 

ask why SCC had not yet sent the additional utility bills she had 

requested, Schaben explained that Poppen’s approval of the transaction

was required and that Poppen was now handling the matter. After this 

call, Schaben had no further communication with UCI. However, he 

3It does not appear from the record that the term of thirty-six months was 

discussed before the parties signed the written agreement. However, it appears 

Tanguay requested billings for thirty-six months because UCI understood tax refund 

claims are time-limited. See Iowa Code § 422.73(1) (2011) (allowing taxpayers three 

years to claim refunds). 

4UCI’s president, David Dawson, explained in his deposition that UCI’s primary 

business focus is on sales tax reviews. Dawson further testified it is UCI’s practice not 

to tell clients—until after a written contract with UCI is signed—that refunds will likely 

be based on sales tax overpayments. According to Dawson, UCI follows this approach 

because if potential clients realized the utility bill review would be focused on tax 

overpayments, they would not hire UCI, and instead assign the project to their tax 

accountants.

 
5

decided to investigate SCC’s tax payments to determine how much tax

SCC had overpaid on its utility bills.

On September 2, 2011, Poppen sent an email message to Dawson

requesting specific details about the scope of UCI’s services and a 

proposed percentage or hourly rate for those services. Dawson 

interpreted Poppen’s message as suggesting the parties should form a 

new contract. Dawson’s response to Poppen asserted no new contract 

was needed because the parties already had a signed agreement for UCI’s 

services.

The parties’ relationship deteriorated. Poppen presented an 

ultimatum to UCI: unless an acceptable agreement could be reached as 

to the precise scope of UCI’s proposed work, SCC would terminate the 

existing contract. Dawson responded that the existing contract was 

sufficiently detailed and also asserted UCI had already performed when it 

“identified erroneous taxes that [SCC was] being charged.”5 On 

September 20, 2011, Poppen sent a letter to UCI, denying the existence 

of a valid contract between the parties6 and stating alternatively that “to 

the extent [the] agreement is valid, it is hereby TERMINATED effective as 

of today’s date.” UCI performed no additional services for SCC after 

receiving the notice of termination. SCC hired an accounting firm to 

pursue a refund for sales tax overpayments.

SCC filed a petition for declaratory judgment requesting the court’s 

determination that the parties had no binding agreement and that UCI 

5The record does not reveal whether UCI disclosed to SCC a projected or 

estimated amount of the potential refund before litigation of this case began.

6Although SCC initially denied the written agreement was supported by valid 

consideration and claimed Schaben was not authorized to sign the written agreement 

with UCI, this argument was later abandoned and is not before us on appeal. 

 
6

was not authorized to pursue refunds on SCC’s behalf. UCI 

counterclaimed, alleging SCC breached the parties’ contract by refusing 

to provide UCI with copies of SCC’s utility bills and denying UCI the 

opportunity to procure the refunds.

SCC filed a motion for summary judgment. The district court 

granted the motion, holding the contract was limited in duration to the 

period between August 9, 2011, when Schaben signed the contract for 

SCC, and September 20, 2011, when Poppen’s letter terminated it. The 

district court also determined that although the parties’ signed writing 

left the scope of the agreement unspecified, their actions indicated the 

only service UCI actually provided was its review of four utility bills. 

Thus, the district court ruled UCI was entitled to fifty percent of any

refund SCC receives for overpayment of sales taxes on those four bills. 

The court further concluded, however, that UCI is owed nothing under 

the contract until the Iowa Department of Revenue actually refunds any

overpayments to SCC.7 

UCI appealed, and we transferred the case to the court of appeals. 

The court of appeals affirmed the district court’s ruling. UCI sought, and 

we granted, further review.

II. Scope of Review.

Generally our standard of review for declaratory judgment actions 

“is determined by the manner in which the action was tried to the district 

court.” SDG Macerich Props., L.P. v. Stanek Inc., 648 N.W.2d 581, 584 

(Iowa 2002). However, in this case we need not determine whether the 

7When the motion for summary judgment was filed, SCC’s application for a 

refund of more than $250,000 from the state was pending. As SCC had not yet received 

a refund, however, the district court concluded UCI’s claim for contract damages was 

not yet ripe. Accordingly, the court dismissed UCI’s counterclaim.

 
7

case was tried at law or in equity, because we are reviewing the district 

court’s decision to grant summary judgment. “Thus, we base our review 

on the propriety of the district court’s summary judgment ruling, not the 

declaratory judgment.” Boelman v. Grinnell Mut. Reins. Co., 826 N.W.2d 

494, 500 n.1 (Iowa 2013); see also Ferguson v. Allied Mut. Ins. Co., 512 

N.W.2d 296, 297 (Iowa 1994). We review the district court’s summary 

judgment ruling for correction of errors at law. Boelman, 826 N.W.2d at 

500; SDG Macerich Props., 648 N.W.2d at 584. Because UCI is the 

nonmoving party, we make all reasonable factual inferences in its favor. 

Boelman, 826 N.W.2d at 501.

III. The Parties’ Positions.

The parties’ main disagreement concerns the effect of SCC’s letter 

of September 20, 2011. SCC insists the letter constituted reasonable 

notice that it was terminating a written contract for services which 

included no durational term. In contrast, UCI characterizes the letter as 

a repudiation of the contract constituting a material breach.

A. Utility Consultants. UCI maintains that while it only reviewed 

four of SCC’s utility bills before repudiation, the information it revealed

to SCC after reviewing those bills constituted performance with value far 

exceeding the potential refund expected for sales tax overpayments on 

those four bills. Accordingly, UCI asserts the district court committed 

legal error in deciding UCI’s expectation interest is limited to damages 

based on any refund derived from only the four bills it reviewed before 

SCC repudiated the contract. UCI further contends a genuine issue of 

material fact on the damage issue precludes summary judgment.

B. Shelby County Cookers. SCC urges us to affirm the district 

court’s judgment and the decision of the court of appeals. As the written 

contract for services had no specific duration, SCC contends it was 
8

lawfully terminated, not repudiated, by the September 20 letter. SCC 

further contends the scope of the contract was properly limited to any 

refunds derived from the four bills UCI actually reviewed. Finally, SCC 

asserts the district court correctly concluded UCI had no claim for

damages at the time summary judgment was entered because SCC had 

not yet received a tax refund.

IV. Analysis.

Our adjudication of the contract’s durational term significantly 

affects the merits of the parties’ contentions. Accordingly, we address

that subject first.

A. Duration of the Contract. To determine whether SCC’s 

September 20 letter constituted evidence of a lawful termination or an 

anticipatory repudiation precluding the summary judgment granted by 

the district court, we first ask whether “the language within the four 

corners of the document” expresses the contract’s duration. Clinton 

Physical Therapy Servs., P.C. v. John Deere Health Care, Inc., 714 N.W.2d 

603, 615 (Iowa 2006) (noting contract analysis almost always begins with 

the contract’s plain language). In this instance, however, the contract 

document does not prescribe a durational term for the parties’ 

relationship.

“The law in Iowa is not well developed regarding the duration of 

contracts where the parties fail to specify a duration.” Keppy v. 

Lilienthal, 524 N.W.2d 436, 439 (Iowa Ct. App. 1994). SCC relies heavily 

on language from Hess v. Iowa Light, Heat & Power Co., 207 Iowa 820, 

221 N.W. 194 (1928) (per curiam), in asserting the contract with UCI was 

indefinite and SCC’s termination was proper under the circumstances 

presented here. In Hess we stated, “where no time limitation is inserted 

in a contract for the performance of services, . . . the contract is regarded 
9

as terminable by either party on reasonable notice.” Hess, 207 Iowa at 

826, 221 N.W. at 196–97. However, SCC’s reliance on Hess is misplaced.

In Hess, the plaintiff sued on a contract entitling him to receive 

free heat and electricity “in consideration of [his] services as director of 

the Carroll Light & Heat Company . . . .” Id. at 822, 221 N.W. at 195

(emphasis omitted). Carroll Light subsequently went out of business and 

the Iowa Light, Heat & Power Company succeeded it. Id. The successor 

company sent a letter to Hess, notifying him that he would no longer 

receive free utilities because he was no longer serving as a director of 

Carroll Light. Id. Hess maintained he was entitled to continue receiving 

free electricity and heat indefinitely and sued to enjoin Iowa Light from

discontinuing the arrangement. Id. at 823, 221 N.W. at 195–96. The 

district court dismissed the action, and we affirmed on the ground that

Iowa Light owed Hess no obligation under his contract with Carroll Light. 

Id. at 825, 221 N.W. at 196. We reasoned further that, because Hess no 

longer served as a corporate director of Carroll Light, he had no 

continuing entitlement for free utilities under the express terms of the 

contract. Id. Put another way, our decision in Hess was firmly based on 

our interpretation of an express contract term. It is therefore clearly not 

dispositive in this case, which turns on a term not expressed in the 

parties’ written contract.

SCC points to the above-quoted language in our Hess opinion

suggesting that even if the contract had conferred upon Hess an

entitlement with no express time limitation, Iowa Light could have 

terminated the contract for services at will upon reasonable notice. See 

id. at 826, 221 N.W. at 196–97. That language is clearly dicta, however,

and does not control our decision in this case.
10

Because Hess is not controlling, we look to other courts’ decisions 

for guidance and find a commonly expressed framework applied in cases 

addressing contracts omitting a durational term. A California court has 

described the framework in this way:

The court first seeks an express term. If one is absent, the 

court determines whether one can be implied from the 

nature and circumstances of the contract. If neither an 

express nor an implied term can be found, the court will 

generally construe the contract as terminable at will.

Zee Med. Distrib. Ass’n, Inc. v. Zee Med., Inc., 94 Cal. Rptr. 2d 829, 835 

(Ct. App. 2000); see also Consol. Theatres, Inc. v. Theatrical Stage Emps. 

Union, Local 16, 447 P.2d 325, 333 (Cal. 1968). Other courts utilize a 

similar framework. See, e.g., Loftness Specialized Farm Equip., Inc. v. 

Twiestmeyer, 742 F.3d 845, 853 (8th Cir. 2014) (applying Minnesota law 

and noting termination of an indefinite contract is allowed upon 

reasonable notice, but only if the contract has neither an express 

durational term nor a term that can be implied); S. Bell Tel. & Tel. Co. v.

Fla. E. Coast Ry., 399 F.2d 854, 858 (5th Cir. 1968) (“[A] contract in 

which the parties express no period for its duration and no definite time 

can be implied . . . can be terminated at will by either party . . . .” 

(emphasis added)); Haines v. City of New York, 364 N.E.2d 820, 822 (N.Y. 

1977) (“It is generally agreed that where a duration may be fairly and 

reasonably supplied by implication, a contract is not terminable at will.”).

Finding no express durational term in the contract between SCC 

and UCI, we next inquire whether the omitted term can be implied from 

the nature and circumstances of the contract. To aid us in this inquiry, 

we look to the Restatement (Second) of Contracts section 204. This 

section provides that when contracting parties “have not agreed with 

respect to a term which is essential to a determination of their rights and 
11

duties, a term which is reasonable in the circumstances is supplied by 

the court.” Restatement (Second) of Contracts § 204, at 96–97 (1981); 

see also Nat’l Util. Serv., Inc. v. Cambridge-Lee Indus., Inc., 199 F. App’x 

139, 144 (3d Cir. 2006) (“A contract whose obligations are of indefinite 

duration should be interpreted to require performance for a reasonable 

period of time.”); Haines, 364 N.E.2d at 822 (“[W]here the parties have 

not clearly expressed the duration of a contract, the courts will imply 

that they intended performance to continue for a reasonable time.”).

The durational term of the contract between UCI and SCC is 

essential in adjudicating whether UCI has a viable claim for breach of 

contract. As the durational term of the asserted contract is essential, it 

is a term properly within the purview of section 204. Although we have 

not previously applied section 204 in this precise context, we relied on it 

when parties to a loan commitment agreement did not expressly state 

their obligations in the event the borrower defaulted on its payments to a 

third party. Taylor Enter., Inc. v. Clarinda Prod. Credit Ass’n, 447 N.W.2d 

113, 116 (Iowa 1989). We have also endorsed the Restatement (Second)’s 

approach in many other contract contexts. See, e.g., Rucker v. Taylor, 

828 N.W.2d 595, 602 (Iowa 2013); Pavone v. Kirke, 807 N.W.2d 828, 833 

(Iowa 2011); Lewis Elec. Co. v. Miller, 791 N.W.2d 691, 695 (Iowa 2010). 

We find the approach instructive in reaching our decision in this case.

Section 204 provides a framework for adjudicating contract 

disputes that cannot be resolved by interpreting express contract terms. 

Restatement (Second) of Contracts § 204 cmt. c, at 97 (“[S]upplying . . . 

an omitted term is not within the definition of interpretation.”); see also 

Richard E. Speidel, Restatement Second: Omitted Terms and Contract 

Method, 67 Cornell L. Rev. 785, 798 (1982) [hereinafter Speidel] 

(“[S]ection 204 is inapplicable until . . . the process of contract 
12

interpretation is completed.”). In supplying a reasonable durational term

not expressed by the parties, we consider several factors. Most 

important are the parties’ intent and the contract’s main purpose. See 

Koenigs v. Mitchell Cnty. Bd. of Supervisors, 659 N.W.2d 589, 594–95 

(Iowa 2003) (determining the duration of maintenance obligations 

contained in an express easement); Keppy, 524 N.W.2d at 439 

(considering that one party “entered the agreement in order to revitalize 

their [swine] herd and earn money”). “[T]he probability that a particular 

term would have been used if the question had been raised” also bears

upon reasonableness. Restatement (Second) of Contracts § 204 cmt. d, 

at 98. This probability inquiry is a factor, but is not dispositive. The 

court’s ultimate goal is reasonableness—not just an approximation of a 

term the particular parties might hypothetically have negotiated. See id.; 

Speidel, 67 Cornell L. Rev. at 803. A term is reasonable in this context 

when it “comports with community standards of fairness and policy.” 

Restatement (Second) of Contracts § 204 cmt. d, at 98. We deem a 

contract for services terminable at will only if we cannot ascertain a 

durational term by considering these factors.

The circumstances surrounding the contract between SCC and 

UCI reveal the parties’ common purpose. UCI does not volunteer detailed 

information about its services unless the client demands it before signing 

a written contract because UCI recognizes the information it provides is

valuable and worthy of protection. Thus, UCI enters contracts with 

clients before revealing the specific source and amount of their potential 

refunds. Because its compensation under the standard contract is based 

on a percentage of the refund its clients receive, UCI’s goal is to maximize 

the size of clients’ refunds. Although SCC did not know the amount of 

its potential refund or how many bills UCI would need to examine to
13

maximize the potential refund recovery, its primary purpose for 

contracting was also to recover the largest possible refund. 

Having identified the parties’ common purpose of achieving as 

large a refund for SCC as possible, we consider the duration of the 

agreement the parties would have deemed reasonable had the question 

been raised. It seems indisputable that both parties likely would have 

characterized their agreement as extending for the period of time 

necessary to complete a review of SCC’s bills and obtain the largest 

possible refund from the appropriate authority. See Keppy, 524 N.W.2d 

at 439 (discussing the district court’s finding that an oral contract with 

no express duration was “intended . . . to be in effect until [the] herd [of 

pigs] could be revitalized and the parties could make a profit”). As we 

have noted, the maximum refund is dictated by the three-year limitation 

period for tax refunds.

We next consider whether supplying a reasonable durational term 

under the circumstances presented here comports with our state’s 

“standards of fairness and policy.” Restatement (Second) of Contracts 

§ 204 cmt. d, at 98. Iowa law affirms the proposition that information 

can be valuable and attests the principle that valuable information 

deserves protection. See Comes v. Microsoft Corp., 775 N.W.2d 302, 311 

(Iowa 2009) (discussing a protective order intended “to protect valuable 

business information . . . from disclosure,” and concluding that a 

modified protective order would still keep valuable information shielded); 

cf. Iowa Code § 550.2(4) (2013) (defining “trade secret” as information 

that, in part, has actual or potential economic value). Therefore, we

conclude supplying a durational term that protects the value of UCI’s

information is consistent with standards of fairness and this state’s 

policy. 
14

Other utility review cases disclose some disagreement about 

whether consultants performing services similar to UCI’s provided 

valuable information to their clients. Compare Nat’l Util. Serv., Inc. v. 

Callahan Mining Corp., 799 F. Supp. 1004, 1006 (N.D. Cal. 1990) 

(suggesting the client may have intended “to stiff” the consultant by 

using the provided information and not paying for it, and refusing to 

permit “such shenanigans”), with Wis-Pak, Inc. v. Nat’l Util. Serv., Inc., 65 

F. App’x 84, 92–93 (7th Cir. 2003) (refusing to compensate the 

consultant for providing a recommendation when the client discovered its 

utility overcharges through entirely independent means). However, when 

viewed in the light most favorable to UCI, we conclude the summary 

judgment record includes evidence from which a reasonable fact finder 

could find both parties believed the information UCI supplied was 

valuable. 

SCC did not know it was overpaying sales tax before UCI revealed

that fact. Armed with new knowledge, SCC undertook its own 

investigation to determine how large the potential refund might be. 

Then, after sending the September 20 letter terminating the contract

with UCI, SCC hired an accounting firm to pursue a refund. The new 

and valuable information UCI supplied was essential to this sequence of 

events leading to SCC filing a refund claim. See Terrell v. Star Coal Co., 

327 N.W.2d 771, 774 (Iowa Ct. App. 1982) (finding that a contract to 

reveal possible mining locations “conveyed new, valuable knowledge . . . 

for which plaintiff should be compensated,” because Star Coal had no 

idea there were coal deposits “in their own ‘backyard’ ”); see also Nat’l 

Util. Serv., Inc. v. Blue Circle, Inc., 793 F. Supp. 52, 55 (N.D.N.Y. 1992) 

(“No consideration had been given by [Blue Circle] to the use of 

interruptible power prior to . . . plaintiff’s recommendation. Plaintiff is 
15

thus entitled to receive the benefits of its recommendation.”); cf. Masline 

v. N.Y., N.H. & H. R.R., 112 A. 639, 640 (Conn. 1921) (“[I]mparting 

[valuable] information in a situation like this must involve an active 

process resulting in arousing or suggesting ideas or notions not before 

existent in the mind of the recipient.”); Soule v. Bon Ami Co., 195 N.Y.S. 

574, 575 (App. Div. 1922) (denying recovery to a plaintiff claiming he 

provided valuable information, because his idea to increase profits by 

increasing prices “was not new, it was not original,” and was simply 

“call[ing] attention to a fact already known”). 

SCC acted on the valuable information it obtained from UCI, and 

the summary judgment record suggests it could derive value from the 

contract far beyond the four bills UCI reviewed. See Nat’l Util. Serv., Inc.

v. Hop-In Food Stores, Inc., No. 92–74460, 1993 WL 839797, at *4 (E.D. 

Mich. Nov. 10, 1993) (“By its very actions, Michigan Hop-In . . . took 

advantage of the information supplied by NUS pursuant to the 

agreement.”); Nat’l Util. Serv., Inc. v. J.R. Sexton, Inc., No. N–88–324(JAC), 

1989 WL 343048, at *2–3 (D. Conn. Nov. 3, 1989) (awarding summary 

judgment to the consultant after the client implemented a 

recommendation the consultant made, but never “forward[ed] its utility 

bills . . . or ma[d]e payments of any kind”); see also Apfel v. PrudentialBache Sec. Inc., 616 N.E.2d 1095, 1097 (N.Y. 1993) (“[Prudential] 

received something of value here; its own conduct establishes that.”). 

Because the value SCC derived from the contract could far exceed a 

refund derived from overpayments on the four utility bills UCI reviewed, 

it is reasonable that the term of the contract should not be limited to the 

short period covered by those bills.

SCC protests that UCI’s employee, Tanguay, never uttered the 

word “tax” until after the contract was signed. Although the record 
16

supports a finding Schaben expected UCI’s review to focus on amounts 

paid for utility services—not on tax overpayments—the contracting

parties’ fundamental objectives were clear: SCC wished to obtain refunds 

of money it paid to a utility company, and UCI wanted compensation 

from SCC for producing refunds. The source of, or reason for, any

refunds obtained as a result of the contract was inconsequential to 

achieving these objectives. “When the parties’ intent is ascertained, a 

reviewing court may not b[y] judicial construction create a new contract 

based on one party’s unilateral understanding of the terms.” Terrell, 327 

N.W.2d at 774; see also Peak v. Adams, 799 N.W.2d 535, 544 (Iowa 

2011) (refusing to credit one party’s “unilateral intent” regarding a 

contract); Waechter v. Aluminum Co. of Am., 454 N.W.2d 565, 568 (Iowa 

1990) (noting we evaluate contracts according to the parties’ objective 

intent, not any “undisclosed intention they may have had in mind, or 

which occurred to them later”).

Applying the relevant factors identified in Restatement (Second) of 

Contracts section 204, we conclude a reasonable durational term under 

the circumstances in this case is determined by the limitation period

prescribing the maximum possible tax refund. Stated another way, the 

contract permitted UCI to review SCC’s utility bills and seek a tax refund 

on as many of SCC’s utility bills as the law allows. Because tax refund

claims are limited to three years, see Iowa Code § 422.73(1), UCI’s 

expectation interest is limited to compensation at the contract rate on 

refunds received for that duration. This term prevents SCC from 

“eva[ding] . . . the spirit of the bargain.” See Restatement (Second) of 

Contracts § 205 & cmt. d (noting the duty of good faith inherent in every 

contract and suggesting that evading the spirit of the bargain might 

violate that duty). Most importantly, the durational term based on the 
17

three-year limitation period will allow UCI to claim the value of the 

information it conferred upon SCC. This durational term will also

effectuate both contracting parties’ fundamental purposes.8

B. Remaining Issues. 

1. UCI’s counterclaim. The determination of whether a party has 

breached a contract is ordinarily for the fact finder. Kern v. Palmer Coll. 

of Chiropractic, 757 N.W.2d 651, 658 (Iowa 2008); Iowa-Ill. Gas & Elec. 

Co. v. Black & Veatch, 497 N.W.2d 821, 825 (Iowa 1993). As we have 

determined a reasonable durational term for the contract that was not 

found by the district court, we conclude the district court erred in 

granting summary judgment in favor of SCC. On remand, the district 

court shall determine whether SCC’s September 20 letter constituted a 

repudiation amounting to an anticipatory breach of the contract

supporting a judgment in favor of UCI on its counterclaim. See Lane v. 

Crescent Beach Lodge & Resort, Inc., 199 N.W.2d 78, 82 (Iowa 1972)

(stating “[a]nticipatory breach requires a definite and unequivocal 

repudiation of the contract” indicating the intent to refuse future 

performance); see also Restatement (Second) of Contracts §§ 250, 253, at 

272, 286. 

2. Damages. If the fact finder determines on remand that SCC 

breached the contract, the damages, if any, resulting from the breach 

8However, we acknowledge the seeming dissonance between our holding in this 

case and one of the time-honored principles aiding our interpretation of contracts. We 

typically resolve contract ambiguities or deficiencies against the drafter. Peak, 799 

N.W.2d at 548; Vill. Supply Co. v. Iowa Fund, Inc., 312 N.W.2d 551, 555 (Iowa 1981). 

Although the reasonable durational term we supply is—under the peculiar 

circumstances of this case—advocated by and beneficial to the drafter, UCI, contracting 

parties are urged to reach an express agreement on the important terms of their 

bargains. It of course goes without saying that express agreements produce more 

predictable results than implied terms supplied by courts.

 
18

shall also be found. See Midland Mut. Life Ins. Co. v. Mercy Clinics, Inc., 

579 N.W.2d 823, 831 (Iowa 1998) (noting the measure of damages for a 

breach of contract should place the nonbreaching party “in as good a 

position as [they] would have occupied had the contract been 

performed”); Restatement (Second) of Contracts § 344(a), at 102. 

V. Conclusion.

The district court erred in granting SCC’s motion for summary 

judgment. Accordingly, we vacate the court of appeals decision, reverse 

the district court’s order granting summary judgment, and remand the 

case for further proceedings consistent with this opinion.

COURT OF APPEALS DECISION VACATED; DISTRICT COURT 

DECISION REVERSED AND CASE REMANDED.