Supplier failed to deliver - going to cost me £10k + in lost sales

LigPatin

Hi 
I'd really appreciate some advice. 
TLDR: A supplier has failed to deliver an essential piece of equipment needed for the opening of my new shop, despite it being paid for and the importance discussed with them. They are ignoring contact. Not receiving this equipment means I cannot open my shop and will miss a large, important event resulting in loss of income (£10k+) and reputation

I'm opening an ice cream parlour, due to start trading at the end of June. 
On 30th April I ordered a large amount of equipment including flooring and an ice cream display freezer from a well established, large equipment supplier, who I'd used a few weeks previously for the first batch of equipment. Everything (excluding the freezer) was advertised as "in stock" on the website. 
I spoke to a rep on the phone who confirmed my order and actually spoke to the manufacturer of the freezers to check there was stock, and said he had put one on hold for me - as I stressed the importance of receiving it asap, in order to be ready for June. I knew that there is often a 6-8 week processing period for freezers. 
I ordered that day and paid in full. (£7k+)
Except the automated order confirmation, I then heard nothing from the supplier causing me to chase a week later. The phone rep told me I'd be called back, but I wasn't. I sent a couple of emails which were ignored. Rinse and repeat this every week until today when I called to speak with a Manager as it had been 4 weeks since I placed the order and nothing had been shipped and no updates given. 
The Manager checked my order, said outright he doesn't understand why nothing had been actioned. He said he would need to refund the online payment and reinvoice me for the order for "security reasons" and he would email me the invoice to be paid by BACS today. 
The invoice has arrived but he has alluded to the freezer being ready "7 weeks from completed order". I've queried this, as the order was done, agreed and paid for 4 weeks ago. 
I was due to open the shop last week of June, to give me and my staff a month of preparation ahead of the local festival, a week long event which is by far the largest, busiest event locally in the whole year - most local businesses make more in that one week than the rest of the year combined. It is the event that puts food on business owner's tables. 
If I do not receive the freezer (which is 7 weeks back order with all suppliers, I'll add) for 7 weeks, the business will not only be delayed in opening by 5-6 weeks, it will be closed for this event. The reputational cost will be enormous. 
My question is this; the failure to meet their obligations as sellers will likely cost my business tens of thousands of pounds, if it doesn't close us permenantly. Are there any legal options open to me? I'm not sure if this is an issue to be raised with Trading Standards, for example? 

A quick look on their recent reviews shows me others are having similar, albeit less urgent, issues. 

visidigi

This is a business to business transaction therefore your rights are very different. Consequential loss, or the lack of it will be according to the business terms and conditions forming your order.

Trading standards wont be of help for the late supply of goods on a B2B transaction. 

Id be cautious of paying by BACS instead of online, different levels of safety in the payment etc.

You need to get legal advice. 

molerat

This is not a consumer rights issue and nothing to do with trading standards.  Your remedy is governed by the terms of the contract you engaged in, what does that state about failure to supply the equipment by a certain date ?  Your only remedy would be through the courts and then likely in accordance with the terms of that contract.

user1977

Unless you had negotiated something specific (and I guess not from your post) then I very much doubt they're going to be liable for consequential loss, their standard terms are hardly likely to be making expensive promises about timing of delivery.

JHW1942

Aren't you being a bit premature in saying the supplier is going to cost you tens of thousands of pounds?  The event isn't for another month - is there no alternative means of renting or buying the equipment you need between now and then?  It's not as if they promised delivery today and the event is tomorrow.

Anyway, as others have said, it's down to the terms of the contract you have with them and whether there's anything in there about their liability for consequential loss.

sheramber

7 weeks today is 15th July.
If  opening the last week in June gives you  a month before the festival  then it cannot be until the end of July so you would have at least 2 weeks beforehand.
Not ideal for what you wanted to do but you would be expected to mitigate any losses for any claim.
What prevents you opening if you have 2 weeks in hand?
£10k  is a lot of ice cream sales in a week. 
A festival may not be so busy this year if people are reluctant to mix in a crowd despite (and assuming)  lockdown  being finished

pbartlett

the only way is if the sales contract includes consequential loss cover for failure to deliver or a time is of the essence clause for late delivery.

Sandtree

pbartlett said:

the only way is if the sales contract includes consequential loss cover for failure to deliver or a time is of the essence clause for late delivery.

The contract doesnt need to explicitly include consequential losses, the basis of contract law is that a breach of contract requires the counterparty to indemnify the other party.  Instead the contract would need to have a clause that explicitly excludes consequential losses, or more likely there will be a limit of liability clause capping liability to the contract value. 

The question is therefore if the delay constitutes a breach of contract or if its within the allowable timeframes.

Ectophile

The trouble is that everything has been done by talking, with nothing written down in a contract. There's not a lot you can do but find another freezer from somewhere else, and take this as a lesson for the future.

Manxman_in_exile

I know legal advice can be expensive, but I sometimes wonder how many new businesses have ever taken legal advice.  I mean, nobody would take out a commercial lease without legal advice - would they?      So why enter into a contract to buy a load of kit that is business critical and where the timing is crucial without some legal input as to what you as a business (not a consumer) is entering into?  A couple of grand in legal fees may seem a lot but not as much as losing £10k of income you are planning to rely on...

unholyangel

Sandtree said:

pbartlett said:

the only way is if the sales contract includes consequential loss cover for failure to deliver or a time is of the essence clause for late delivery.

The contract doesnt need to explicitly include consequential losses, the basis of contract law is that a breach of contract requires the counterparty to indemnify the other party.  Instead the contract would need to have a clause that explicitly excludes consequential losses, or more likely there will be a limit of liability clause capping liability to the contract value. 

The question is therefore if the delay constitutes a breach of contract or if its within the allowable timeframes.

Indemnity goes far further than the normal rules under contract law. Normal contract law makes the party in breach liable for foreseeable losses reasonably incurred (that is, they have a duty to take reasonable steps to reduce their losses and must not take unreasonable steps to increase their losses). 

While indemnity (if it's drafted correctly) can have them liable for all losses, regardless of whether they were reasonably incurred or foreseeable. It's a "hold harmless" clause. 

Also, everyone here seems to be assuming the losses would be consequential. Imo they're more likely to be direct. Confusing direct losses as consequential losses has cost more than a few companies a pretty penny (when the contract excludes consequential).  But most b2b will exclude business profits as a loss specifically. 

I would also aver that the first position (since there seems to have been a problem with OPs order) is whether a contract was actually formed at that point. OP says they ordered from them before, so how did the process compare? What do their terms state? Are there any conditions such as subject to contract?