When a vendor fails to follow through on their commitment, it can immediately disrupt your business. It may lead to a loss of customers or stalled operations. Missing supplies or services that you never received can also result in significant financial strain. These setbacks do more than just hurt your daily workflow. They can threaten the stability of a business you have worked hard to build.
If their failure to deliver goes against the terms of your contract, you are not without recourse. You may have specific legal options available to address the situation and seek a resolution.
Seek compensatory damages or consequential damages
Compensatory damages aim to cover the money your business lost because the vendor did not deliver. For example, if a medical supply vendor fails to provide equipment, you might be able to seek the difference in cost to buy it from another source. You can also seek consequential damages. These cover indirect losses, such as profits you lost while your business was unable to operate, provided those losses were reasonably foreseeable.
Request a specific performance
In some cases, the goods or products involved are one-of-a-kind and cannot be found anywhere else. If a vendor is the only source for a unique piece of technology or a rare product, you may be able to request a court to order “specific performance.” This extraordinary remedy requires the vendor to deliver the exact item promised.
Formally rescind the contract
If it was a material breach of contract, and the relationship with the vendor has fallen apart entirely, you may choose to formally rescind the contract. This effectively “undoes” the agreement and treats it as if it never existed. This option can be ideal when you want to walk away from the deal and recover any payments you already made.
Assess your situation and your contract first
Before taking action against a vendor, it is vital to fully assess the strengths and weaknesses of your contract with a legal professional. Not only can they help you get clarity on your options, but they can also help you understand the long-term implications of your choices according to New Jersey state law.