You ordered materials weeks ago. You paid the deposit. You have customers waiting. But the delivery truck never showed up, or perhaps it did, but the goods were defective, wrong, or damaged.
In the global supply chain, delays happen. But when a supplier’s failure to deliver crosses the line from a minor annoyance to a breach of contract that causes actual financial loss, you have rights. In New Jersey, you are not expected to simply absorb the cost of a vendor’s incompetence.
Identifying the Type of Breach
Not all mistakes are legal breaches. If a supplier is one day late with a shipment that wasn’t time-sensitive, it’s unlikely a court will award you significant damages. However, if the failure affects the core of the deal, it is actionable.
- Failure to Deliver: The goods never arrived.
- Defective Goods: The items received are unusable or do not meet the specifications outlined in the vendor/supplier contract.
- Late Delivery: If “Time is of the Essence” was stipulated in your agreement, lateness is a material breach.
Calculating Your Losses: Direct vs. Consequential Damages
This is the most critical part of a supplier dispute. To get compensation, you must prove you lost money.
Direct Damages are the immediate costs. If you paid $10,000 for lumber that never arrived, your direct damage is $10,000 plus the cost to buy it elsewhere.
Consequential Damages are the ripple effects. This is where businesses really suffer.
- Did you lose a major client because you couldn’t fulfill their order on time?
- Did your production line shut down, costing you labor hours?
- Did your reputation take a hit?
Recovering consequential damages is difficult but possible if the supplier could have reasonably foreseen that their failure would cause these specific losses. This is why having a business transaction attorney review your initial contracts is vital—we ensure clauses regarding damages are drafted in your favor.
The First Step: The Notice of Breach
Don’t run to the courthouse immediately. The first legal step is usually a formal “Notice of Breach.”
This letter serves two purposes:
- Cure Period: It gives the supplier a specific timeframe (e.g., 7 days) to fix the mistake (cure the breach).
- Evidence: It serves as formal proof that you attempted to mitigate the issue.
Many disputes are resolved here. A supplier might ignore a phone call, but a formal letter on law firm letterhead regarding breach of contract disputes often motivates them to settle or expedite a refund.
What If They Have a “Force Majeure” Clause?
In recent years, suppliers love to hide behind “Force Majeure” clauses—claiming that “acts of God,” pandemics, or supply chain disruptions excuse their performance.
Don’t take their word for it. These clauses are interpreted very strictly in New Jersey courts. Just because material costs went up or shipping is difficult does not automatically void a contract. A lawyer needs to review the specific wording. If the event wasn’t truly unforeseeable, they are likely still on the hook for your losses.
When to Litigate
If the supplier refuses to refund you or cover your losses, litigation or arbitration is the next step.
For smaller amounts, New Jersey Special Civil Part handles cases up to $15,000. For larger commercial disputes involving significant business losses, you will file in the Law Division.
We recently handled a case where a maintenance company recovered a $900k award in a breach of contract arbitration. These results are possible when you have a clear paper trail and aggressive representation.
If your business is bleeding money because a vendor didn’t do their job, don’t wait. Statutes of limitations apply. Review your contract, calculate your total losses (including lost profits), and demand what you are owed.
