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anand das (service)     12 September 2013

Breach of contract -

An agreement is executed between two companies S & P.

S is supplier and P is the purchaser. Agreement provides that Supplier should supply minimum 500 tonnes of material every month to Purchaser and if Supplier fails to supply minimum quantity to Purchaser in any month, Supplier will have to pay Purchaser the amount which is the actual price for short supplied material. 

There is also a clause of arbitration.

Now, for one month, Supplier fails to supply any material. i.e. it is a breach by supplier and Purchaser is entitled to get amount for the 500 tonnes material.

1. What is the legal course available to Purchaser.?

2. should purchaser send a demand notice?

3. If demand notice is unanswered or gets a vague reply what will be next step?

pls guide.

regards

abhijit



Learning

 3 Replies

T. Kalaiselvan, Advocate (Advocate)     13 September 2013

After exhausting the relief through arbitrator, you may follow up the further legal course of action

shanmugam lakshmanan (senior)     13 September 2013

It seems that your agreement is hit by section 23 of Indian contract Act which restricts any agreement against public policy. This kind of agreement cannot be be enforced as no one can get unjust enrichment - However you may sue your supplier for general damages on failure to supply goods in time. At the same time you have to revoke the agreement. I invite more discussion from legal fraternity on my point.

anand das (service)     16 October 2013

Thanks All,

for your expert guidance.

Regards

anand


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