Breach of Contract: What Can You Do When a Supplier Doesn't Deliver?

The story in the video

It's Gerald the goose's birthday, and our lawyer has ordered a goose-shaped cake. The bakery delivers a duck. Is that a breach of contract? Yes — the baker promised one thing and delivered another. The real question is what our lawyer can do about it, and the answer depends on how serious the breach is.

What counts as a breach of contract?

A contract is a promise the law will enforce. If one side fails to perform any of its terms — fully, on time and as agreed — that is a breach. Common examples in business include:

• Late delivery of goods or services
• Delivering the wrong goods, or goods of the wrong quality or quantity
• Failing to deliver at all
• Not paying an invoice by the agreed due date
• Announcing in advance that you won't perform (an "anticipatory" breach)

Note the fourth point: for a supplier, an unpaid invoice is itself a breach of contract by the customer.

Small breach vs serious breach

The law treats breaches differently depending on how much they affect the deal.

• Minor breach: the contract continues, but you can claim damages for the loss it caused — for example, the extra cost of a one-day delay.
• Serious (material or fundamental) breach: it goes to the heart of the deal. You can usually end the contract and also claim damages.
• Many contracts define which terms are essential, or set out a notice-and-cure period before you can terminate. Check your contract first.

Be careful: ending a contract for a breach that turns out to be minor can put you in breach yourself.

What remedies can you claim?

• Damages: money to put you in the position you would have been in if the contract had been performed.
• Termination: ending the contract after a serious breach, usually by written notice.
• Price reduction or replacement: common for defective goods, depending on the law and the contract.
• Performance: in some countries, especially civil-law ones, a court can order the other side to perform. In common-law countries this is the exception.
• Agreed remedies: penalty, liquidated damages or late-payment clauses set out in the contract itself.

For international sales of goods, the UN Convention on Contracts for the International Sale of Goods (CISG) applies in many countries unless the contract excludes it. Under the CISG, you can only avoid (end) the contract for a fundamental breach.

Keep your loss reasonable

You can't turn a breach into a windfall. Two rules limit what you can claim:

• Mitigation: you must take reasonable steps to limit your loss. You can't buy a solid-gold replacement cake and send the baker the bill.
• Foreseeability: you can generally only recover losses that were a foreseeable result of the breach when the contract was made.

How to make a breach of contract claim stronger

• Get agreements in writing — orders, confirmations and terms and conditions.
• Keep evidence of the breach: delivery notes, photos, emails, inspection reports.
• Notify the other side in writing, quickly, and give them a deadline to fix it.
• Calculate your loss with documents, not estimates.
• Watch the time limit: every claim has a limitation period.

How Collecty can help

When a breach of contract leaves you with an unpaid invoice, Collecty recovers B2B debts in 190 countries — negotiating first, and escalating to legal action through local partners when needed. No win, no fee.