February 13, 2012

Getting paid and preserving a vital business relationship

The goods were dispatched on time but transit problems meant that the goods arrived at the customer’s workshop five days past the due date. Although delays are commonplace and are usually of little consequence, our client was not that lucky. The customer claimed that he had missed the opportunity to fulfill a lucrative contract, leaving our client with an unpaid invoice and a potential claim for damages against him. If that wasn’t bad enough, he also risked losing a valued customer relationship.

When in doubt, you should consult the contract but this is not always easy without proper advice. Our dispute resolution team thoroughly assessed all of the parties’ contracts – the manufacturing client, the customer and the carrier – and it turned out that the customer’s legal position was far from clear and was open to contradiction.

Working closely with our manufacturing client we were able to successfully argue that our client’s terms of business should apply and that any late delivery was the carrier’s responsibility, not our client’s. Our client was then able to pass on the customer’s losses to the carrier which meant our client was fully paid, avoided costly damages and was able to protect and maintain a key business relationship for the future.

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