You placed that big order for plates a month ago. You restaurant is scheduled for its grand opening this Friday. Rumor has it that the best and most feared restaurant critic in Florida is going to be there. And you have no plates to serve your guests because your vendor has just notified you that there is a problem with the order. They can't fill it in time.
Fortunately, you have a contact with another restaurant supply company that can help you out. You will now be paying more than twice for the same style and brand of plates you contracted for with the original vendor, but you will be ready for opening night.
Now you're wondering if you have some sort of recourse against the vendor that was unable to meet the terms of the supply contract.
Read below for some basics of handling a breach of contract with a vendor.
Breach of contract
In legal terms, the vendor has breached the contract. This occurs when one party to a binding contact fails to meet the specified obligations. In this case, your restaurant supply vendor wasn't able to complete the order for your plates in the time specified by the contract.
You have the right to recover from any financial burden you were subjected to due to the vendor's breach. In this case, not only are you entitled to recover any payments you made toward your original order, but you may also be able to sue for the difference between the original cost and the inflated cost you had to pay at the last minute.
As a result of the vendor's breach of contract, you have the right to receive some form of remedy. This includes damages, specific performance, or restitution.
Damages can be compensatory, such as the vendor paying you the difference for the extra money you had to spend to have another company fill your order. They can also be punitive, which go beyond simply reimbursing you.
Specific performance would occur if the court ordered the vendor to supply your order completely and on time. With only three days to go, this would more than likely not be an option.
In this case, restitution would occur if you cancelled the contract as a result of the breach and you were then returned to the same state you were in before there was an agreement.
When a vendor breaches their contract with you, it can be harmful to your business. Be sure to understand the terms of any contracts you enter into as well as your recourse options should the contract be breached.