Supplier beware!

Suppliers, where the contract is usually a ‘purchase order’ for materials or goods, are increasingly at risk of claims against them from contractors. One of our clients, a large supplier providing manufactured products, received a purchase order for almost £1 million from a large national contractor.

The project experienced numerous delays prior to our client’s planned delivery dates. This resulted in their delivery dates being postponed. Further, Variation Instructions issued to our client impacted on the scope of works, delaying delivery dates further.

Unfortunately, due to a minor manufacturing problem, our client also needed to replace a component within his products. These replacement parts could be fitted retrospectively from within the building. Therefore, no external access was required nor was there any resulting delay to the project.

The Contractor, seeking to exploit the manufacturing problem, sought to charge the supplier (our client) with purported access and other preliminary costs. The claim made against our client was in excess of £250,000. As a result, invoices totalling this amount were not paid to our client.

Edge Consult provided a comprehensive report which highlighted the various rights and remedies available to the supplier; many of which they were not aware of. Armed with our report, the Contractor’s withdrew most of his claim and the supplier reached an acceptable agreement with the Contractor.