Tennessee Breach of Contract Cases: What Issues Are Juries Allowed to Decide?

If you file a breach of contract case in Tennessee and demand a jury, what are the chances that the jury will actually decide if there was a contract, and/or if it was breached?  In my experience, in many Tennessee breach of contract cases, those issues are decided before they ever make it to a jury —— by a motion for summary judgment or by the court, after the trial has begun and proof has been taken, but before the case can be submitted to the jury.  So, the short answer is that, in many breach of contract cases where a jury is demanded, the jury will never decide whether the defendant is liable for breach of contract.

Why is it that, even if a jury is demanded, the jury might not resolve a breach of contract case?  The domain of juries in Tennessee is to resolve disputes about facts. Under Tennessee law, it is the role of the court, not the jury, to construe and to interpret the terms of a contract if the terms are clear and unambiguous.

Even if the terms of a written contract are not clear and unambiguous, it is not for the jury to decide the parties’ intent unless the court cannot resolve their intent using the recognized rules to be applied to aid in the construction of contracts (e.g., terms of a written contract are to construed against the drafter).  Similarly, the court can even interpret an ambiguous contract by considering facts extraneous to the written terms of the contract (parol evidence) if such facts are not conflicting and lead to only one conclusion about the parties’ intent.

There are breach of contract cases, however, that may make it the jury.  Such cases involve disputes about facts and not about how written agreements should be interpreted.  For example, if ABC Company alleges that it had a verbal contract with Doe to buy 100 widgets, but Doe denies that there was ever such an agreement, a jury would have to decide whether there was a contract.

Here are a couple of Tennessee breach of contract cases where a jury made the final decision:

Hibernia Bank & Trust Co. v. Boyd (Tenn. 1932):  An executive of a company guaranteed a loan from a Bank to his company.  His company defaulted on the loan. The executive alleged that he delivered certain collateral to the bank, after he made the guarantee.  In the written agreement with the Bank memorializing the delivery of the collateral, there was no mention of whether the Bank was or was not accepting the collateral in full satisfaction of the debt of the executive to the Bank.  The executive’s witnesses testified that the Bank orally agreed, at the time of the delivery of the collateral, that it would accept the collateral in full satisfaction of the executive’s guarantee.  The Bank denied this.  The Supreme Court of Tennessee reversed both the trial court and the court of appeals and held that the case involved a controversy of fact that had to be resolved by the jury.

Forde v. Fisk University (Tenn. Ct. App. 1983):  In this case, the parties, a professor and Fisk University, had a written contract. The term of the contract was for the “academic year,” but “academic year” was not further defined.  The professor alleged that the “academic year” ended on May 7.  The University alleged that it included all of May.  The court of appeals held that it was a proper case for the jury to decide because there was conflicting evidence about when the “academic year” ended.

This blog has focused on jurors’ roles in deciding issues related to liability, but not on the likelihood that a jury will determine the damages to which a plaintiff who proves a breach of contract is entitled. In my experience, questions about what damages should be awarded in a breach of contract case are often jury questions because they frequently require the resolution of disputed facts such as whether damages were foreseeable; what damages (like lost profits) were proven to a reasonable degree of certainty, if any; the reasonable amount of the damages; and, whether, and by what amount, the plaintiff could have mitigated its damages.


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