Dispute with Supplier

When do you need legal assistance in a dispute with your supplier?

A supplier who fails to deliver, delivers late, or supplies defective products or services—it directly impacts the continuity of your business. You have obligations to your own customers, and every day the problem persists, the damage mounts.

The risk is that you wait too long or react too cautiously in order to preserve the relationship with the supplier. However, from a legal perspective, complaining in a timely manner is crucial. Anyone who complains too late loses their right to complain
and is in a weak position during legal proceedings. Have your position assessed before you respond or accept a settlement.

The most common disputes with suppliers

Disputes with suppliers occur most frequently in four situations.

The supplier fails to deliver or delivers late. You have entered into an agreement with an agreed delivery date. The supplier fails to meet that date, keeps postponing delivery, or does not deliver at all. In the meantime, you have obligations to your own customers that you cannot fulfill.

The supplier delivers defectively. The delivered goods or services do not meet the agreed quality standards, specifications, or reasonable expectations. The supplier does not acknowledge the defect
or offers an inadequate solution.

The supplier is issuing an unjustified invoice. You are receiving an invoice for more than agreed upon, for work that has not been performed, or for additional work that was never approved.

The supplier unilaterally terminates the supply. In the middle of an ongoing agreement, the supplier withdraws, stops the supply, or increases the price outside the contractual agreements.

What should you do first?

File a written and timely complaint. This is the most crucial step legally. Send your complaint by email or registered letter, describe the defect as concretely as possible, and retain the evidence. Without a timely written complaint, you will in many cases lose your right to compensation or dissolution.

Subsequently, put the supplier in default. Give the supplier a reasonable period to still fulfill their obligations — to deliver, repair, or replace. If the supplier fails to do so, default occurs, and you are entitled to compensation and dissolution of the agreement.

Document your damage. Keep all invoices, quotations, order confirmations, correspondence, and evidence of the damage you have suffered — lost revenue, additional costs for a replacement supplier, damage claims from your own customers.

What legal steps can you take?

There are four routes depending on your situation and goal.

Enforcing performance. You want the supplier to deliver or rectify the situation. You can enforce performance through a formal demand and, if necessary, summary proceedings — especially if you have an urgent interest because your own business operations have come to a standstill.

Claiming damages. You have suffered damage due to the supplier's breach of contract. You can claim direct damage as well as consequential damage, provided you can substantiate that damage and the supplier is in default.

Termination of the agreement. If performance is no longer meaningful or the supplier refuses, you may terminate the agreement. You are then no longer obliged to fulfill your own obligations and may reclaim amounts already paid.

Set-off or suspension. If you still owe an amount to the supplier, in some cases you may be able to suspend or set off this against your claim for damages. This requires legal advice — never do this without assessing your position.

Note: limitations of liability in general terms and conditions

Many suppliers use general terms and conditions that limit their liability — sometimes to the invoice value, sometimes excluding consequential damages. We assess whether those limitations are valid and whether you can challenge them. An unreasonably onerous clause is voidable.