Maybe you run a restaurant and rely on a local farmer for the produce that becomes your popular salad bar. Perhaps you run a manufacturing facility and depend on chemical suppliers to deliver fixed amounts of industrial solvents and other chemicals so that your production lines can continue turning out products.
Drafting and signing a vendor contract is an act that should protect you from someone else flaking out on their responsibilities to your business. Unfortunately, it is quite common for even those bound by written agreements with another company to violate those contracts. A vendor breach of contract could mean idling your factory for days or angering your regular customers who counted on you for a quick and healthy lunch.
How do you resolve a breach of contract issue with a vendor who didn’t deliver what they should?
Notify them to request a prompt resolution
Occasionally, a non-delivery issue is the result of a vehicle collision or a change in management. There could be a reasonable explanation for why the company did not follow through with its contractual obligations.
If you notify them of the failure, they may resolve the issue quickly and may even offer compensation, like a discount on your next order. If they do not resolve the issue, then you may need to go to court.
A judge can award you damages
When you can show direct financial harm caused by the other party’s non-delivery, you could request damages from your vendor in a civil suit. This process will be particularly straightforward if you have an agreement in your contracts allowing for specific damages. The judge can also theoretically order the other party to refund any payments you have made or dissolve the contract so that you have no future obligations to the other party.
A judge can order specific performance
Sometimes, you don’t really have noteworthy damages to claim, but you are still in need of the goods that the vendor did not supply. A judge can order specific performance and effectively compel the other party to make good on their contractual promises to your business.
Although enforcing your contract might damage your relationship with the vendor, maintaining a relationship with an unreliable vendor may not be the best arrangement for your business. Knowing what steps to take when dealing with a breach of contract issue with a vendor can help you mitigate the consequences of that other party’s failure for your company.