Supply contract disputes

What is happening

The buyer accepted a consignment without comment, then a month later alleged hidden defects and stopped paying. The defects report was drawn up unilaterally, and the supplier was never invited to the inspection.

The supplier missed the deadlines in the specification, the buyer withdrew from the contract and bought from another seller. The parties are now arguing about three things at once: the prepayment, the penalty and the price difference.

A shortfall was discovered at the buyer's warehouse after the driver had left, and the consignment note carries no remarks. Whether the supplier, the carrier or the buyer bears it depends on the documents and on how risk passes under the contract.

What the law says

• Supply is a form of sale under the Civil Code, with special rules on timing, quantity, assortment, quality and the consequences of breach.
• The acceptance procedure for quantity and quality is set by the contract; if it refers to the Soviet-era Instructions P-6 and P-7, their procedures, including calling the supplier's representative, become binding on the parties.
• A buyer who receives defective goods may choose to demand a price reduction, free repair or reimbursement of repair costs, and, where the breach is material, withdraw from the contract or demand replacement.
• Unilateral withdrawal from a supply contract is allowed for a material breach: by the supplier, for example, repeated late delivery; by the buyer, repeated late payment or failure to collect the goods.
• After termination for the other party's breach, the innocent party may recover the difference between the contract price and the price of a reasonable substitute transaction (Article 524 of the Civil Code).
• Where quality is disputed, the decisive evidence is usually an expert examination: an independent one carried out on acceptance, or one ordered by the court.

What we do

• We rebuild the delivery chronology from the documents: orders, specifications, transfer documents, consignment notes, acceptance reports.
• We check whether the acceptance procedure and the deadlines for notifying defects were followed, and by whom they were breached.
• We arrange an independent quality inspection or prepare questions for a court-appointed expert.
• We calculate the debt, the penalty and the price difference on a substitute purchase.
• We prepare the claim letter, the statement of claim or the defence, and represent the company in the commercial court.
• Where the dispute covers several consignments, we build the position consignment by consignment so the evidence does not get mixed up.

What we will need from you

• The supply contract, specifications, annexes and supplementary agreements.
• Shipping and transport documents for the disputed consignments.
• Acceptance reports, defect reports, notices and invitations to the supplier's representative.
• Certificates, quality passports and test results, if any.
• Correspondence about orders, deadlines and complaints about the goods.
• Payment documents and the reconciliation statement.