Coyle's Pest Control, Inc. v. Andrew Cuomo, Secretary of Housing and Urban Development
154 F.3d 1302 | Court of Appeals for the Federal Circuit | 1998
What This Case Means for Subcontractors
Coyle's Pest Control signed a contract with HUD to provide termite control services across Texas counties, but the contract didn't specify a minimum number of properties HUD had to assign. When HUD assigned far fewer properties than expected, Coyle sued for $1.5 million in lost profits. The court ruled the contract was unenforceable as written and said Coyle could only collect payment for work actually performed. This matters because vague contracts without guaranteed minimums leave you exposed to getting little or no work.
Key Takeaways
- •Never sign a contract labeled 'indefinite quantity' unless it includes a written minimum quantity guarantee or exclusive purchasing requirement—otherwise you have no enforceable right to any work
- •Fixed unit rates mean nothing without a minimum volume commitment; the client can assign zero work and owe you nothing beyond what they actually order
- •Get specific numbers in writing: minimum properties per month, minimum annual volume, or exclusive right to perform the service—vague 'as-needed' language will not hold up in court
Coyle is entitled to payment only for services actually ordered by HUD and provided by Coyle.
Frequently Asked Question
Can I enforce a contract that says work will be assigned 'as-needed' without a minimum guarantee?
No. Courts will not enforce 'as-needed' contracts as indefinite quantity agreements unless they include a written minimum quantity term or exclusive purchasing clause. You'll only be paid for work the client actually assigns you, which could be zero. Always negotiate a minimum volume commitment in writing before signing.
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