Summary
- A supplier’s failure to deliver on time is usually a breach of contract, entitling you to terminate, claim damages, or seek other remedies.
- Force majeure only excuses a supplier’s non-performance if your contract includes a valid clause covering the specific event – it is not implied by English law.
- Without a force majeure clause, the doctrine of frustration applies only in narrow circumstances where an unforeseen event makes performance radically different from what was agreed.
- This article is a plain-English guide to supply contract rights for business owners operating under English law, covering force majeure, frustration, and available remedies.
- It has been prepared by LegalVision, a commercial law firm that specialises in advising clients on contract disputes and supply chain matters.
Tips for Businesses
Review your contract for force majeure clauses and notice requirements before disputing a supplier’s claim. Document all losses and mitigation steps promptly. Check your own downstream contracts for exposure. Engage your supplier early – negotiation often resolves disputes faster and at lower cost than litigation.
Global disruptions – from pandemics to geopolitical conflicts – have made supply-chain delays a commercial reality for businesses of all sizes. When a supplier fails to deliver on time, or at all, understanding your contractual rights can mean the difference between absorbing a significant loss and recovering it. In the United Kingdom, the legal framework governing supply contracts is shaped by the Sale of Goods Act 1979, the Supply of Goods and Services Act 1982, and the general principles of English contract law. Unlike some civil law jurisdictions, English law does not imply a general force majeure doctrine into contracts, meaning the terms of your agreement and the common law doctrine of frustration are the primary tools available when performance fails. This article explains your rights when a supplier fails to deliver, how force majeure and frustration operate in practice, and the steps you can take to protect your position.
When a Supplier Fails to Deliver
A supplier’s failure to meet agreed delivery timelines is, in most cases, a breach of contract. Under the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982, goods must be delivered within a reasonable time (or by the agreed date), and services must be performed with reasonable care and skill.
If your supplier breaches these obligations, you may be entitled to:
- Terminate the contract and source goods or services elsewhere
- Claim damages for losses flowing directly from the delay, including additional costs incurred in finding a replacement supplier
- Seek a price reduction where partial performance has occurred
However, your ability to pursue these remedies depends heavily on what your contract says and whether the supplier is relying on a force majeure clause.
What is Force Majeure?
Force majeure is a contractual provision that excuses a party from performing its obligations when an extraordinary event beyond its control makes performance impossible or impractical. Common examples include natural disasters, war, government-imposed restrictions, and (as many businesses discovered post-2020) pandemics.
Crucially, force majeure is not an automatic right under English law. Unlike some civil law jurisdictions, English law does not imply a general force majeure doctrine into contracts. If your contract does not contain a force majeure clause, the supplier cannot rely on it.
Where a clause does exist, courts will interpret it strictly. To successfully invoke force majeure, the supplier typically must demonstrate that:
- The triggering event falls within the clause’s defined list of circumstances
- The event was beyond their reasonable control
- The event directly caused the failure to perform – not merely made performance more expensive or inconvenient
- They took reasonable steps to mitigate the impact
A supplier who could have sourced materials from an alternative supplier, or who experienced delays partly due to their own poor planning, may struggle to rely on force majeure successfully.
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The Doctrine of Frustration
If there is no force majeure clause, a supplier may instead argue frustration. This is a common law doctrine that discharges a contract where an unforeseen event makes performance radically different from what was agreed.
Frustration has a high threshold. Courts apply it narrowly, and it will not apply simply because performance has become more difficult or costly. Where frustration is established, it could allow recovery of money paid in advance and, in some cases, compensation for work already performed.
Protecting Your Position
If you are facing supply-chain disruption, there are practical steps you can take to protect your position:
Review Your Contract Carefully
Check whether there is a force majeure clause, what events it covers, and what notice obligations the supplier must comply with. Many clauses require the supplier to notify you promptly – failure to do so can invalidate the claim.
Document Your Losses
Keep clear records of additional costs, lost revenue, and any steps you have taken to mitigate the impact. This evidence will be essential if you pursue a damages claim.
Consider Your Own Downstream Obligations
If a supplier’s delay affects your ability to deliver to your own customers, check whether your contracts contain force majeure protections you can rely on in turn.
Engage Early
Commercial disputes are often resolved more efficiently through negotiation or mediation than litigation. Early engagement with your supplier and your own legal team can preserve the relationship while protecting your financial position.
When to Consider Legal Action
If negotiation fails and your losses are significant, litigation or arbitration may be the appropriate route. Before commencing proceedings, it is worth assessing the strength of your position by reference to the contract terms, the supplier’s conduct, and the evidence available. Courts will expect both parties to have acted reasonably – including taking steps to mitigate losses rather than allowing them to accumulate. Where a supplier has wrongly invoked force majeure, or has simply failed to perform without any valid excuse, a well-documented claim can have a powerful advantage, even if the matter ultimately settles before reaching trial. In cross-border supply disputes, also consider which law governs the contract and which jurisdiction’s courts have authority to hear the claim, as this can significantly affect both your rights and your litigation strategy.
This guide outlines how to resolve commercial disputes.
Key Takeaways
A supplier’s failure to deliver usually breaches the contract and may entitle you to terminate, claim damages, or seek other remedies. Force majeure only applies if your contract includes a valid clause. Suppliers must prove the event prevented performance and that they took reasonable mitigation steps. Without a force majeure clause, frustration only applies when an unforeseen event fundamentally changes the contract. It does not apply because performance becomes more expensive or difficult. Review your contract, document your losses, and assess your downstream obligations. Engage with your supplier early and consider legal action if negotiations fail.
LegalVision provides ongoing legal support for all businesses through our fixed-fee legal membership. Our experienced dispute resolution lawyers help businesses manage contracts, employment law, disputes, intellectual property, and more, with unlimited access to specialist lawyers for a fixed monthly fee. To learn more about LegalVision’s legal membership, call 0808 196 8584 or visit our membership page.
Frequently Asked Questions
Can a supplier simply cancel our contract because of rising costs caused by supply-chain disruption?
No. Increased costs alone do not entitle a supplier to cancel a contract or invoke force majeure. Unless your contract contains a specific price variation clause, the supplier remains bound by the agreed terms. Attempting to cancel in these circumstances would likely constitute a repudiatory breach, entitling you to terminate and claim damages.
We paid a deposit before our supplier invoked force majeure. Can we get it back?
Potentially, yes. If the contract is discharged, you may be allowed to recover sums paid before the frustrating event, subject to any allowance for expenses the supplier has already incurred. The precise outcome will depend on your contract terms and the specific circumstances.
What must a supplier prove to successfully invoke a force majeure clause?
The supplier must show that the triggering event falls within the clause’s defined circumstances, was beyond their reasonable control, directly caused the failure to perform rather than merely making it more expensive, and that they took reasonable steps to mitigate the impact.
What remedies are available if my supplier fails to deliver?
Depending on your contract, you may be entitled to terminate and source goods elsewhere, claim damages for losses flowing from the delay including replacement supplier costs, or seek a price reduction where partial performance has occurred.
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