We were told the delivery of the shipment on our order was 30 days and it made 60 days. are we allowed any compensation, how can we claim it? of course the supplier is unwilling saying he is not the shipping company. our contract was clear buy and deliver from the supplier side.
I’m glad to see you were wise enough to put the delivery dates in the contract. Many buyers forget that. But for the contract to have teeth, it would have been even better to have stated specific penalties for crucial terms, such as shipping date or quality specifications. As mentioned on a recent post from my blog:
Make sure the penalty is large enough to make the supplier take them seriously but not so large as to scare them away. As long as the penalty is reasonable, liquidated damages provisions are enforceable in Chinese court and it will save you lot of trouble. Without pre-agreed terms for compensation, it is very hard to prove how much loss you have suffered. The main value of putting a penalty in your contract is that it will motive the supplier to comply with the terms so that actually you never have to enforce it.
Based on your question, I am assuming the contract you had didn’t state the penalty. But there is still hope for you to receive compensation. This blog post outlines the options and steps in more detail, but here is a quick overview.
Do you wish to do business with this supplier in the future?
If yes, I suggest you leverage future orders to get some kind of compensation.
If no, consider engaging a lawyer or debt collection agency.
If the damages caused by the missed delivery date are less than 4000 USD, it may be hard to get a lawyer or collection agency interested in representing you. But if your loss is substantial, here is a typical scenario:
a) Chinese language demand letter is sent from a China based lawyer to grab the seller’s attention and let them know this is serious.
b) If the seller doesn’t offer reasonable compensation the case can go to court.
If you would like introductions to lawyers and such, please check out www.SourcingServiceCenter.com where I keep a list of endorsed service providers who have done a good job for me on similar cases.
BTW, don’t forget about www.SupplierBlackList.com. This is a free service where you can explore a bad supplier and warn other buyers.
Let me know how things work out for you.
Question answered by Mike Bellamy.
Advisory Board Member & Featured Blogger at the not-for-profit China Sourcing Information Center (www.ChinaSourcingInfo.org). Author of “The Essential Reference Guide to China Sourcing” and founder of PassageMaker Sourcing Solutions.