Vendor disputes can disrupt business and cost money. When a supplier is late, sends bad goods or breaks payment terms, a business may be able to recover damages depending on the contract and the law that applies.
Compensatory damages address direct losses
Compensatory damages try to put the injured party in the position it would have been in if the contract had been performed.
For example, if a vendor does not deliver goods and you must buy replacements at a higher price, you may be able to recover the difference between the contract price and the replacement cost. Lost profits may also be available in some cases if you can prove them with reasonable certainty.
Records such as purchase orders, customer contracts, sales data and invoices can help support the claim.
Consequential damages may cover related losses
A breach can also cause losses beyond the cost of replacement goods or services. Depending on the contract and the law, a business may be able to recover certain consequential damages.
These losses may include added expenses or other harm that was foreseeable. To recover them, the business usually must show that the losses came from the breach, were foreseeable and can be proven. The business also must take reasonable steps to reduce its losses.
Contract terms shape available remedies
The vendor agreement can change what damages are available. Some contracts include liquidated damages clauses that set a specific amount or formula for damages after a breach. Other contracts limit or exclude certain damages.
Reviewing these terms before bringing a breach-of-contract claim can help you understand what recovery may be available.
Building a strong damages claim
Detailed records can strengthen a vendor dispute. Keep emails, invoices, delivery records, replacement costs and financial documents that support the loss.
A lawyer who handles commercial contract disputes can review the agreement, identify possible damages and help build a claim through negotiation or litigation.
