Has a commercial vendor breached your supply agreement? If so, you could be entitled to pursue a commercial lawsuit against them. Take the following steps to protect your interests and assert your right to a fair resolution.
Review the Terms of the Contract
You should review the terms of your supply agreement carefully before taking any action in response to a vendor’s potential breach. Critical terms to review include:
- Delivery deadlines
- Quality standards
- Notice requirements
- Payment terms
- Designated remedies for a breach, such as actual or liquidated damages
You should also check whether the contract includes force majeure or limitation of liability clauses, which may absolve the vendor of liability for a breach under certain circumstances or limit the amount of money you could recover from the vendor. Also, check whether your contract includes an alternative dispute resolution clause, which may require you to submit a breach claim to mediation or arbitration, or a choice of forum clause that designates the jurisdiction where you must file a lawsuit.
Once you’ve reviewed the contract, you can better determine whether the vendor made a minor or material breach. A minor breach does not absolve you of your obligation to continue performing under the contract, whereas a material breach entitles you to stop performing.
Document the Breach
Next, you should gather evidence of the vendor’s breach, such as emails, invoices, delivery receipts, inspection reports, and photographs. A clear, comprehensive record of your communications with the vendor can bolster your claim that the vendor breached their contractual obligations.
You should also begin to document the losses you’ve suffered because of the vendor’s breach, including costs of obtaining replacement supplies, production delays, or lost sales. Keeping thorough records of your losses can improve your chances of obtaining a complete financial recovery should you bring a claim against the vendor.
Communicate with the Vendor
If possible, consider reaching out to the vendor directly. Professional, straightforward communication about the breach may help you resolve the dispute efficiently without the need for costly, time-consuming litigation. An attorney can send the vendor a formal written notice of breach, which should detail how the vendor failed to fulfill their contractual obligation(s) and suggest corrective action(s). Maintaining open communication with the vendor can help you negotiate a favorable resolution, which may include revised delivery terms, replacement goods, refunds, or future discounts. As you communicate with the vendor, remember to keep things professional and avoid angry comments or a hostile tone.
Explore Legal Remedies
Should the vendor fail to remedy their breach after you provide notice, there are various remedies you might pursue in settlement negotiations, arbitration, or litigation, such as:
- Financial compensation for your losses
- Specific performance, which requires the vendor to fulfill their obligations under the contract
- Termination or rescission of the contract
The remedies available to you will depend on the governing law for the contract and the parties’ agreement on applicable remedies (such as liquidated damages). You should talk to a commercial litigation attorney before taking action to discuss your rights under the contract and your legal options for pursuing remedies.
Contact a Contract Attorney Today
If a supplier has failed to deliver conforming goods on time, you may have a legal claim to recover compensation for expenses or losses resulting from the vendor’s breach of contract. Contact August Law, PLLC today for an initial consultation with a commercial agreements lawyer in Michigan. We’ll explain your rights and help you explore your options for securing accountability and compensation.