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What should you do if your supplier fails to deliver on time?

On Behalf of | Apr 28, 2023 | Business Law |

Partnerships are an excellent way for businesses to form connections and gain valuable resources. One of the most common partnerships is that between businesses and suppliers. Suppliers play a huge role in running a business because they provide the necessary materials companies need to sell their products and services. This means that if a supplier fails to deliver an order on time, it can cause damage to a business. So, what should a business do if this happens?

Going back to the contract

Failure to deliver on time constitutes a breach of contract. Typically, parties include a breach of contract clause in their agreement. This can include terms, such as penalties or obligations to fulfill. If the damages are minor, the contract parties usually discuss and settle among themselves.

Deciding to bring the matter to court

When the damages are material and the parties fail to settle on their own, the wronged party can bring the matter to court. In Ohio, you must file a lawsuit for breach of contract within four years of the cause of action.

It is good to note, however, that the court will not punish the defendant for breach of contract since it is not considered a crime. Normally, the court will order the defendant to pay the wronged party the amount that would bring the latter back to their original economic state if the breach did not occur. This includes the cost of direct losses caused by the breach.

There are, however, special circumstances when the court orders payment of other damages, such as consequential damages for missed opportunities or reliance damages for expenses the business incurred while relying that the supplier will deliver on time.

Protecting the present and future of your business

While partnerships are important in a business’s growth, it is equally important to protect the company from actual and anticipatory damages. Having a well-written contract would benefit a business in the long run. Moreover, knowing the available remedies would better prepare a business in case they face a breach of contract.


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