Commercial contract dispute UK: what to do when a supplier lets you down
When a supplier fails to deliver what they promised — missing deadlines, providing substandard work, refusing to refund for services not rendered — you are dealing with a potential breach of contract. Understanding your options, and the practical steps to take, can mean the difference between recovering your losses and absorbing them.
Is it actually a breach of contract?
Before taking action, establish whether what the supplier did — or failed to do — actually breaches the contract. A breach occurs when a party fails to perform an obligation under the contract without legal justification.
Check the contract carefully. What exactly were they obliged to deliver, by when, and to what standard? Some contracts include carve-outs — force majeure provisions, for example — that excuse non-performance in certain circumstances.
Not every failure is a breach. If the contract gave the supplier discretion over timing, or if the specification was ambiguous, establishing breach may be more complicated than it initially appears.
Document everything immediately
Gather all correspondence, invoices, deliverables, and evidence of the failure. If the issue is quality, document it precisely — photographs, specifications, expert assessment where appropriate. Note dates carefully — when the obligation was due, when the failure occurred, when you notified the supplier.
Written communication from this point forward is important. Confirm conversations in email. Create a paper trail.
Give formal notice before escalating
Before threatening legal action, send a formal letter or email clearly stating: what the breach is, what you require the supplier to do to remedy it (or what you are claiming in compensation), and a reasonable deadline for response or remedy.
This step is often required before pursuing claims through the courts, and it frequently resolves disputes without litigation. Many businesses become considerably more responsive when they receive a formal letter referencing breach of contract.
Your remedies
Damages — financial compensation for your losses caused by the breach — are the primary remedy. Your losses must be caused by the breach, you must have taken reasonable steps to mitigate them, and they must not be too remote from the breach.
Specific performance — a court order requiring the supplier to perform — is available in limited circumstances, typically where damages would be an inadequate remedy.
Termination — ending the contract — is available where the breach is sufficiently serious (a repudiatory breach) or where the contract includes termination rights for this type of failure.
Small claims and formal proceedings
For disputes under £10,000, the small claims track in the County Court is designed to be accessible without legal representation. For higher-value disputes, the costs and complexity of litigation increase significantly.
Mediation — a facilitated negotiation with a neutral third party — is increasingly common and often faster and cheaper than litigation for commercial disputes.
Protecting yourself next time
Most commercial contract disputes are made worse by poorly drafted contracts. A contract that clearly defines deliverables, timescales, quality standards, and remedies for non-performance gives you a much stronger position if things go wrong.
PaperSafe reviews supplier contracts before you sign, identifying gaps in the protections you need. Upload your PDF and receive a complete review in under 2 minutes for £49.
Ready to review your contract?
Upload any contract and receive a plain-English review in under 2 minutes. Risky clauses flagged. Missing protections identified. £49.
Review my contract — £49 →