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2 steps to take when a supplier breaches their contract

On Behalf of | Dec 2, 2022 | Business Litigation |

If you run a retail outlet, a restaurant or a manufacturing business, you need reliable suppliers to remain in business. 

Unfortunately, a supplier might breach their deal with your business for a variety of reasons. They might stop making deliveries unannounced, leaving you in a lurch. Or, they might reduce the quantity that you agreed on or seek to alter the contract terms midway. All these can end up costing your business. 

So. what do you do if a supplier breaches a contract? Here are some options:

1. Try to find out what is going on.

If you have been in business with the supplier in question for years without issues, then you could give them the benefit of doubt. Getting in touch to establish what led to the breach can be a great starting point. 

Sometimes, all you need to do is make a simple call to settle the issue. However, if this does not work, then you may need to issue a formal demand letter. If you cannot get a satisfactory response or nothing changes, then you might have to seek legal redress. 

2. Consider legal action.

Your supplier might take you seriously and be open to negotiation or mediation if you file a civil lawsuit against them. However, before coming to the negotiation table, be sure to understand what is in your company’s best interests.

If you can no longer trust the supplier to follow through with the contract, then you should push for a termination. However, while doing so, ensure that you seek a refund and applicable damages for undelivered supplies. If only this supplier will due, you may want to push for specific performance, where a court orders them to uphold their end of the deal.

Business contracts are legally binding and enforceable. Knowing your legal options can help you protect your rights and business interests when dealing with a supplier who has breached a business contract.