Business vs. Business Suit

[pete3500]

I have a few questions here, I own a business and plan on sueing a vendor for losses incured due to neglegence. The amount was roughly $5000.00, but I believe it should be more due to the fact that because of their actions, my relationship with our customer (We are a distributor) has been damaged.

1. Is this something that can be brought forth in Small Claims, or is there a seperate court that presides over B2B suits?

2. Should I file the law suit in the county and state that the vendor is located, or the county and state that my business is located? We are MD, they are NY.

3. Does anyone know the language I should use in the filing so it appears like I know what I am doing? I can go into more details if nessesary, but wanted to see if what I wrote was enough to go on.

Thanks!

 

[dcatz]

You need more detail.
Negligence is a broad term. The nature of the injury may dictate the place to sue.
“Own a business” is insufficient. Legal composition is important. NY doesn’t permit corporations to sue in SC.
NY caps SC recovery at $3,000 and MD caps at $5,000.
Many SC courts do not deal in awards of consequential damages (the relation with the customer). “Pain and suffering” is an exception for some of those but is not relevant here.
Proof of consequential damages arising out of injury to a commercial relation is often dependent on discovery. No discovery in MD.

On the other hand, that may be all the information that you need.

 

[pete3500]

OK, here we go with the details. Thank you by the way for replying to my post, very much appreciated. I will list the events in chronological order with approx. dates. We are a distributor of Promotional Products located in MD.

1. (8/25, Monday) A long standing customer searches our website and finds a product they would like (Silver). They e-mail us to query and let us know they need them by September 15th.We present them with a quote,

2. (8/26, Tuesday) We recieve the signed quote. We generate a Purchase Order to the manufacturer and send in. We call the Manufacturer to confirm they recieved, they did.

3. (8/27 Wednesday) Manufacturer sends us Order Confirmation, which we have a record of, with all the details of the order, Silver item.

4. (8/29, Friday) Because we expect to have to pre-pay, and have not yet heard from the manufacturer, we call to provide CC info. At this point we are told that they do not have any silver items in stock. When we asked why they had not called, they replied that they were checking with their China Distributor to see if they could get the silver in time, and they did not want us to "worry". As a back-up, they assured us that they had plenty of the item in black, and asked if this would suffice with our customer. They said they would know if they could get the silver on Tueday of the next week (Due to Labor Day). After a call to our customer, they agreed if silver was not available, black would be OK.

5. (9/2, Tuesday) After not hearing from the supplier in the morning, as they had promised, we called them at 11:00AM to find te status of the silver item. They informed us that they could not get the silver and that they did in fact NOT have any black items.

At this point we tried to find a suitable alternative but there were none available for the time-frame required that were equivalent. Due to these actions, our business lost roughly a $10,000 sale that would have net us $4,500. Further, our customer, whom we have NEVER failed before, now has to participate in an event without the items we promised we could get them. A promise we made because of what the manufacturer told us. We have done as much damage control with the customer as possible, but there is nothing that will take away this screw-up.

Those are the details. I appreciate any advice you can give......

 

[seniorjudge]

...
At this point we tried to find a suitable alternative but there were none available for the time-frame required that were equivalent. Due to these actions, our business lost roughly a $10,000 sale that would have net us $4,500. Further, our customer, whom we have NEVER failed before, now has to participate in an event without the items we promised we could get them. A promise we made because of what the manufacturer told us. We have done as much damage control with the customer as possible, but there is nothing that will take away this screw-up.
...

Isn't this just the nature of the business?

How can any supplier absolutely guarantee that he will have something in stock?

 

[dcatz]

In my opinion, the answer to SJ’s rhetorical question is that it became the manufacturer’s problem at the time the Order Confirmation was tendered in response to receipt of the Purchase Order. I believe that meets the requirements for the formation of a contract for future sale of goods under Division 2 of the Uniform Commercial Code and that you have a viable cause of action on the facts posted.

However, I think that your action lies in NY, unless the manufacturer is also authorized to do business in MD and has a presence. If it’s in NY and I’m correct in my conclusion, you never said whether you’re a corporation, and your SC recovery would be capped at $3,000, if you can proceed. I think it’s too soon to be able to prove an entitlement to monetary recovery for damage to the commercial relationship in any event.

 

[pete3500]

That was my thought process as well. I have looked into the county where the manufacturer resides, and they have a form online I can download, fill out and send in with $25 (It's a small county). I intend on trying to claim the entire $4,500 and will be willing to go up there for the preceedings.

What would the correct terminology I should use when filling the form that would summerize my claim? I assume some sort of "Tort", but I am not sure at this point.

Also, just for the sake of arguement, how would I phrase the damage sought for the relationship, assuming I could prove it....

Thanks again.

 

[pete3500]

Almost forgot, we are an LLC.....

 

[dcatz]

Almost forgot, we are an LLC.....

NY isn’t my state. If you’re going to sue and have to do it in NY, I suggest checking the statutes. A rose by any other name . . . . If the statute says “no corporations in SC”, I’d assume that included LLCs and even an S-Corp.

If you get past that, I wouldn’t worry too much about terminology (especially since I’d consider the issue between you and the manufacturer a contractual breach and you should look to the UCC to determine the measure of damages). If you have to go in a higher court, let your lawyer put the name to it.

It’s nice if you get the terminology right, but the assumption in SC is that you don’t know it and probably will muddy the waters if you guess. Allege facts and assert damages. The judge will mentally do the homework, will decide whether you’ve described a viable cause of action and which one and whether you’ve satisfied all of the elements. That’s the reason they get the big bucks.

 

[pete3500]

Thanks everyone. I will let you know what the result is.