Opinion ID: 895305
Heading Depth: 3
Heading Rank: 2

Heading: General Standing Ordinances as Unilateral Contracts

Text: Relying on Overton v. City of Houston , the City contends that general standing ordinances, however detailed, can never constitute a unilateral employment contract. 8 See 564 S.W.2d at 403–04. In Overton , employees relied on city ordinances in asserting a right to termination pay. Id. at 402. The First Court of Appeals declined to treat the ordinances as a contract for purposes of determinating the appropriate statute of limitations governing the case, stating: “The ordinances alone . . . cannot form a contract with the plaintiffs in this case.” Id. at 403–04 (emphasis added). To the extent the reasoning in Overton suggests an ordinance alone can never establish a unilateral contract, we disapprove it, and conclude that, in some circumstances, an ordinance or group of ordinances can constitute a unilateral contract. A municipality utilizes ordinances as a means to conduct its business. Cf. Cent. Power & Light Co. v. City of San Juan , 962 S.W.2d 602, 613 (Tex. App.—Corpus Christi 1998, pet. dism’d w.o.j.). It is therefore unsurprising that this Court has implicitly recognized that municipalities sometimes contract with third parties by way of ordinance. See City of San Antonio v. Frizzell , 91 S.W.2d 1056, 1056–57 (Tex. 1936) (noting that an ordinance evidenced the entire contract between a city and a third party). When an ordinance evidences a contract, and is sought to be enforced as one, we have construed it as any other contract. See id. (construing the ordinance as a contract, and ruling accordingly). We have further concluded that a statute (and ordinances passed pursuant to it) authorizing a pension plan for policemen and firefighters was “necessarily a part of the contract of employment.” Byrd v. City of Dallas , 6 S.W.2d 738, 740 (Tex. 1928). In Byrd , by virtue of their employment with the city and acceptance of the pension scheme, the policemen and firemen’s participation in the pension plan became “as much a part of the agreed compensation as is the monthly stipend.” Id. at 741. Although the pension scheme at the time of the decision was derived from a statute, it was also realized through ordinances. See id. at 739. Similarly, a franchise agreement between a municipality and a gas company was “embodied” in a city ordinance, apparently standing alone. See S. Union Co. v. City of Edinburg , 129 S.W.3d 74, 76 (Tex. 2003). In reviewing the City of Edinburg’s contract claims against a natural gas utility, we construed the city’s ordinance as a contract, discerning from it the parties’ intent and the scope of their respective obligations. See id. at 84–85. We have also read two ordinances and related documents together as a single agreement, and noted that “a court may determine, as a matter of law, that multiple documents comprise a written contract.” Fort Worth Indep. Sch. Dist. v. City of Fort Worth , 22 S.W.3d 831, 840–41 (Tex. 2000). It is “well-established law that instruments pertaining to the same transaction may be read together to ascertain the parties’ intent.” 9 Id. at 840. In addition, the multiple documents need not contain all of the terms; instead, only the essential terms are required. Osborne v. Moore , 247 S.W. 498, 499 (Tex. 1923). Therefore, different ordinance sections can potentially be read together in a single contract. See City of Fort Worth , 22 S.W.3d at 840–41. Further, no particular words are required to create a contract; therefore the fact that an ordinance does not contain the word “contract” in its text does not preclude it from having contractual effect. See 14 Tex. Jur. 3d Contracts § 46 (2006); Farmers’ State Bank & Trust Co. v. Gorman Home Refiner y, 3 S.W.2d 65, 66 (Tex. Comm’n App. 1928, judgm’t adopted); Coffman v. Woods , 696 S.W.2d 386, 387–88 (Tex. App.—Houston [14th Dist.] 1985, writ ref’d n.r.e.).