When a supplier breaches a contract, the consequences for your company can be severe: production delays, financial losses, reputational damage, or even lost clients. If you find yourself in this situation, it’s important to react quickly and with a well-defined legal strategy that protects your interests and minimizes damages.
At BUFET GÓMEZ FERRÉ we are lawyers specializing in supplier claims, contractual debts, and non-payments between companies. In this article, we explain the legal steps to follow when a supplier fails to meet their obligations, distinguishing this scenario from cases where the conflict is due to unpaid invoices.
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Important Note: If the problem is not in the execution of the contract, but in the non-payment of invoices by another company, consult our specific guide on
how to claim a debt without breaking the business relationship.
When is a supplier considered to have breached a contract?
A supplier is considered to have breached a contract when they fail to comply with what was agreed upon or do so defectively, directly or indirectly affecting your business. This breach can manifest in various ways, including:
The breach can be partial, when only part of what was agreed is delivered but with defects or outside the deadline, or total, when the service is simply not provided or the product is not delivered.
In any case, to claim a breach of contract, it will be essential to prove what was agreed and the damages suffered by gathering all possible documentation and/or any evidence demonstrating the contractual relationship and the damage caused.
Step 1: Contract review and evidence collection
Before initiating any claim, it’s essential to carefully review the contract signed with the supplier. Pay attention to aspects such as:
- Delivery deadlines and agreed conditions
- Required quality standards
- Penalty clauses for breach or delays
- Commercial and service warranties
- Specific obligations of each party
At the same time, gather all available documentation that supports your case, as we mentioned, such as:
- Contracts, quotes, or signed purchase orders
- Issued invoices
- Delivery notes or proof of delivery
- Emails, WhatsApp, or other communications
- Photographs, technical reports, or any evidence demonstrating compliance or breach.
All this information will allow a lawyer to prepare the claim with a solid foundation, increasing the chances of success and avoiding problems due to lack of evidence.
Step 2: Formal demand to the supplier
Once the documentation has been analyzed, the next step is to send a formal and documented communication, ideally via certified mail or certified email. This serves to leave reliable proof that you have attempted to resolve the conflict in an extrajudicial manner before going to court. The communication should detail:
- What obligations have been breached
- The solution or remedy demanded (delivery of material, replacement, refund of amounts, compensation, etc.)
- The deadline within which they must comply with the request
- Warning of legal action if they do not respond
For example, a basic text could be:
“We require that you, within 7 calendar days, proceed with the delivery of the material in accordance with what was agreed in the contract. Otherwise, we will be forced to exercise the corresponding legal actions.”
This step strengthens your legal position and provides an essential formal record in case it becomes necessary to initiate legal proceedings.
Step 3: Negotiation or mediation before filing a lawsuit
Before going to court, in many cases it’s advisable to attempt an amicable agreement with the supplier. This route can be faster and less costly, as well as allowing you to maintain the business relationship if it’s still strategic for your company.
Some advantages of negotiating or mediating include:
- Saving time and costs compared to a complete legal process.
- Possibility of maintaining the business relationship, avoiding future conflicts.
- Avoiding long and complex procedures, reducing stress and complications.
However, attempting an agreement doesn’t always pay off. It may not be useful when:
- The supplier stops responding.
- If there are high financial losses due to the delay.
- There are clear signs of bad faith or intention to breach.
In these cases, a lawyer specialized in commercial law can manage the negotiation or mediation strategically, ensuring that any agreement is safe and beneficial while protecting your company’s interests.
Step 4: Legal action if the supplier doesn’t respond
If after the formal demand the supplier continues to fail to comply or offer a solution, it will be necessary to take the next step and activate the available legal channels to protect your rights. Depending on the type of breach and the damages caused, a lawyer can evaluate different options, which may include:
- Claim for damages and losses, to recover the costs and losses generated by the breach.
- Contract termination, when trust has been broken or it no longer makes sense to continue the business relationship.
- Claim for debts between companies, if in addition to the breach there is an unpaid invoice.
- Payment order procedure for unpaid invoice, a fast route to judicially demand payment of amounts owed.
- Lawsuit for breach of contract, when a complete judicial response is needed to declare the supplier’s liability.
The timelines for these procedures can vary, but they usually range between 6 and 18 months, depending on the court workload and the complexity of the case. Even so, initiating the claim as soon as possible increases the chances of recovering the amount owed or the damages suffered.
Frequently Asked Questions
While you can attempt to manage the conflict on your own, having a lawyer specialized in non-payments and commercial claims significantly increases the chances of success, who will help you:
- Evaluate the legal viability of your claim.
- Prepare and gather all necessary documentation correctly.
- Manage negotiations or mediations strategically.
- Initiate legal actions effectively if there is no agreement, protecting your interests and minimizing risks.
You can claim both actual damages (direct costs suffered, such as defective material or urgently hiring another supplier) and lost profits (profits that your company has ceased to obtain).
Example: if a delay in delivery prevented the completion of an important order, you can claim the loss of that client as financial damage.
Although the options are reduced, there are still avenues: you can communicate your credit in the bankruptcy, study actions against the administrators if there was mismanagement, or evaluate civil alternatives. Acting quickly is essential because bankruptcy deadlines are very strict.
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In such cases, it may be of interest to consult our article on
how to claim debts from bankrupt companies without assets.
If the supplier does not respond to formal demands, the next step is to initiate legal proceedings to claim contract compliance or the damages caused.
Communications by email, purchase orders, invoices, recorded conversations, and witnesses can serve to prove what occurred. It’s always advisable to document the business relationship.
In most cases, the deadline to file a claim is 5 years, although waiting can make damage recovery more difficult. Ideally, you should act as soon as possible.
Yes. If the supplier has breached the contract, you can terminate the contract without penalty and, in addition, claim the damages that this breach has caused you.
Free lawyer consultation – Lawyer specializing in unpaid debts claims and breached contracts in Barcelona
Free lawyer consultation: If a supplier has breached a contract, don’t assume the losses. At Bufet Gómez Ferré we are lawyers specialized in non-payment claims and contractual disputes between companies, offering a free initial consultation to help you recover your money and protect your business. Additionally, our fees are adapted to the outcome and complexity of the case, so you can act with the peace of mind of having a transparent and results-oriented service.
You can review our services as lawyers for non-payments if you wish to learn about all the solutions we make available to you.