As a business owner, it is your job to keep everything running smoothly. Whether you run a manufacturing facility where you produce products or you run a restaurant or retail business, you are dependent on your suppliers for the materials you need to make your products or to provide goods and services to your customers.
When a supplier fails to fulfill their obligation to you and does not deliver materials on time, you could have many financial consequences for that failure. While flexibility with suppliers is important, and issues can arise that they have no control over, major failures can have big implications for your business. What can you do if a supplier isn’t delivering contracted goods as you agreed?
Failing to deliver goods as agreed is a breach of contract
When you place an order with a company, whether it is a one-time order or an ongoing, recurring purchase, you expect that they will abide by their promised delivery date and provide you with the materials you need to keep your business running.
In some cases, a company runs into issues with its own suppliers or facilities that prevent them from fulfilling their obligations. Generally, when that happens, the company will reach out to their buyers to alert them about the circumstances. However, some companies might sign a contract or even take payment for a delivery that they know they will not be able to complete.
When a company does not intend to make good on their contractual obligation to you, they have breached your agreement and opened themselves up to a potential lawsuit.
What compensation can a lawsuit provide?
There are many different ways for a company to handle a breach of contract. In some scenarios, the best option will involve asking the court to compel the other parties who either fulfill their agreed-upon supply obligation or to refund any payments made for goods and materials you did not receive.
In other situations, such as a promised delivery of critical materials, your company may have provable financial losses, such as wages paid to employees who had nothing to do that day. When a breach of contract is substantial and produces financial consequences for your company, you may have the option of pursuing compensation through business litigation for those verifiable damages as well.