Some of the most serious contract breaches are simply when the contract isn’t upheld in any capacity. For instance, say that you run a manufacturing center building garden products and equipment. If you order parts and materials that never arrive, it’s impossible for your manufacturing team to make the products that you need to sell to end consumers. This clearly causes you financial harm—both in lost sales and in the money that you paid to the supplier who never delivered.
But there are other situations in which the supplier does make the delivery—they just don’t do it on time. Say that they’re a week late. Technically, they have breached the contract by missing that deadline, but they may claim that it shouldn’t really have a financial impact on your business. You are eventually getting the materials that you ordered.
Financial harm is still possible
The supplier certainly may try to frame things this way, but the reality is that even a missed deadline can have a financial impact on your business.
For one thing, you likely had workers scheduled for that week, and they can no longer do their jobs without the necessary parts and materials. This could significantly hamper your production numbers for the year, and it means you’re paying workers’ wages even though they can’t do the job they were hired to do.
The second issue is that you likely have your own contracts to fulfill. Maybe you sell the garden tools and equipment to retail stores or directly to consumers. All of the products that were ordered are now also going to be a week late, and some of those customers may cancel their orders or refuse to work with your company in the future.
Situations like this can cause financial harm and reputational harm, so be sure you know what legal options you have to address a breached contract.
