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We have all been there. The disappointment of your order not quite being what you expected. Whether it arrives via online shopping or the newest restaurant in town, it happens. Often the answer is simple, send it back or order something different next time.

Unfortunately the answer is not always as straightforward in business. This is understandable, that overdone sirloin steak hasn’t been subjected to the same level of due diligence crucial to many commercial supplies, as outlined in Frederica’s top tips when dealing with international suppliers.

 

What should you look for in a good supplier relationship?

Firstly, as Frederica points out, due diligence is key. Once completed, this process should make it clear whether or not this supplier can meet the needs of your business in key areas, significantly; quality, timeliness, competitive service, pricing and payment terms.

Importantly, your requirements need to be clearly communicated to the supplier so they know what to expect and can assess if they are able to satisfy these expectations.

These are the basics and the benefits of getting it right are obvious but just one flaw can mean everyone loses, leading to time consuming and costly disputes. So what do you do when it goes wrong?

 

Identify the issue

You know your order, you know what you’re entitled to and you know you haven’t got it. Wait, do not dive straight in. By no means should you accept the wrong order but firing off a sharp email or immediately picking up the phone to issue demands and ultimatums whilst outlining your rights is not the way forward.

This could well be a simple oversight resulting in a one-off. Even if this is not acceptable the issue, its cause and solution should be identified.

What were the precise details of your order? What does the contract say? What was stated by the parties at the time? In what way does your item or service received not meet expectations? What needs to be done to correct the situation? Of course time will not always allow for a full investigation but these are some of the considerations before you should inform the supplier.

 

Outline the issue and a solution with the supplier

Even if you have managed to fix the issue at your end the supplier needs to know. The supplier needs to know the impact of their actions. They may have thought they were doing you a favour with an early delivery whereas they are in fact ramping up your storage costs.

This should prevent the same issue cropping up again, giving both parties opportunity to identify a permanent remedy.

Whatever the remedy both parties should be clear why the solution is required, how it should be achieved and by when. Put it in writing, at the very least an email confirming what has happened and how it is to be resolved.

 

Next steps

Now that both parties are fully aware of the situation a satisfactory solution should be at hand and business can continue as envisaged. The issue has been fixed and measures to prevent the same thing happening again can be put in place.

It may be that a change in the market or circumstance of either party dictates that any agreement needs to be tailored suitably.

But, if the supplier is consistently letting you down do not be held to ransom. If the supplier cannot reassure you that your custom is still valued then it is time to move on.

Not a step to be taken lightly, you need to be sure your business is in a strong position. Can you ensure supply continues, be it through another supplier or enforcing your current supplier to fulfil their contractual obligations?

This brings you back full circle to ensuring that you have a robust contract in place from the outset to best protect your business and enable you to take appropriate steps when things do go wrong.

 

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If you need any advice in relation to litigation or disputes please contact the head of our Dispute Resolution Team, Jim Morris on 01244 354 821 or jim.morris@dtmlegal.com.

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