What To Do When A Vendor Breaches A Contract: A Legal Guide

Posted April 10, 2025 in Uncategorized

Your business relies on vendors and suppliers holding to the terms of the contracts you both signed, so when one doesn’t, whether it’s due to shipment delays, poor quality products, or other issues, it’s not just frustrating. It could be costing your business thousands of dollars. Your contract should clarify each signer’s responsibilities and include legal protections for both parties.

Your contract should also include how to settle issues like failure to fulfill its terms or even the buyer’s options if the seller fails to deliver the expected amount and quality of items within the agreed-upon schedule. Our simple, step-by-step guide can help you solve contractual issues with your vendors, but when it’s time to initiate legal action, our Littleton, CO business dispute lawyer can help you assert your legal rights.

Review the Contract

Reread your contract and note your supplier’s performance obligations. Document the specific obligations the vendor failed to fulfill, and gather proof of specific occurrences, including records of late or incomplete deliveries, notes on sub-par quality goods, or invoices where you may have been overcharged.

Then, see if the contract explicitly defines what constitutes a breach and, if it does, whether the contract includes a provision allowing the vendor a period to rectify the breach. There may also be a clause addressing termination rights, which allows you to terminate the contract immediately, without penalty, due to non-performance.

Ideally, the contract contains remedies for the aggrieved party to secure liquidated damages in case of a breach, such as arbitration, and replenishing any losses they suffered. However, if there isn’t one in your contract, and you did suffer financial loss, then your only option to recoup that money may be through a civil breach of contract suit.

Gather Evidence to Support Your Claim

Evidence of the breach is instrumental in securing damages or even proving that a breach occurred. Saving evidence of the breach of contract can help you better establish any claims for damages.

Some of the evidence that our attorneys typically use in breach of contract claims includes:

• Copies of the contract and any changes made to it
• Emails, letters, or messages about problems with performance
• Records of payments and invoices
• Reports or evaluations on work quality or performance
• Statements from employees or others who witnessed the issue

Open a Line of Communication With Your Vendor

Do you want to sever the business relationship with your supplier? You can easily do that by filing a breach-of-contract suit without talking to them first. But, talking about failure to perform issues with your vendor can give them a chance to rectify the issue without litigation. Your contract may actually have a provision requiring you to alert the vendor to any issues and give them a chance to fix them.

Sometimes, a breach is caused by extraordinary circumstances you may not have been aware of, such as an act of nature or unforeseen operational challenges. Sending your vendor a letter detailing the specifics of the breach and a proposed remedy may solve your problem.

If you’ve already passed this step, and your vendor refuses to comply with the contract’s terms, or if they’re dodging your calls and emails, then you’re well within your rights to escalate the breach and file a civil suit.

The attorneys at Volpe Law LLC can help you initiate legal action or review your contracts to determine your options for a remedy. Please contact our Littleton business dispute lawyer today for a bespoke complimentary discovery call.