Is there a contract? If there is a contract then what will be legal compensation?

[Texan1021]

I have been sued by one of my supplier for a PO from our LLC in Texas. They changed our terms and marked up the PO with new terms and sent it back to us. We told them we have to issue a new PO and wait until new terms are approved. But they went ahead and shipped a small shipment against the PO. We kept this shipment but told them that this is not correct product but we will use this against an older project. We had new specifications in the new larger PO. They sent many emails asking for approved new PO but we told them to hold. Now they claim that they already bought all the material. They are filing a lawsuit for PO value plus attorney fee. I offered them to settle it at cost if they show that the inventory was purchased post our PO and can not be used elsewhere. How much they would they get in court if they win? Do they really have a contract?

 

[LdiJ]

I have been sued by one of my supplier for a PO from our LLC in Texas. They changed our terms and marked up the PO with new terms and sent it back to us. We told them we have to issue a new PO and wait until new terms are approved. But they went ahead and shipped a small shipment against the PO. We kept this shipment but told them that this is not correct product but we will use this against an older project. We had new specifications in the new larger PO. They sent many emails asking for approved new PO but we told them to hold. Now they claim that they already bought all the material. They are filing a lawsuit for PO value plus attorney fee. I offered them to settle it at cost if they show that the inventory was purchased post our PO and can not be used elsewhere. How much they would they get in court if they win? Do they really have a contract?

Ok, you are saying that they changed the terms of your purchase order and then went ahead and ordered materials before you gave an approval on their changes? Have they actually filed the lawsuit yet or are they just threatening? I do not see how they have a cause of action under the circumstances. If you have not paid for the small amount of product that they did ship to you, that you kept, then they would have a valid cause of action for that, but I do not see how they have a valid cause of action on the purchase order. They did not accept your original purchase order and jumped the gun buying materials before you approved the changes.

 

[justalayman]

. I offered them to settle it at cost if they show that the inventory was purchased post our PO and can not be used elsewhere

Why?

 

[quincy]

I have been sued by one of my supplier for a PO from our LLC in Texas. They changed our terms and marked up the PO with new terms and sent it back to us. We told them we have to issue a new PO and wait until new terms are approved. But they went ahead and shipped a small shipment against the PO. We kept this shipment but told them that this is not correct product but we will use this against an older project. We had new specifications in the new larger PO. They sent many emails asking for approved new PO but we told them to hold. Now they claim that they already bought all the material. They are filing a lawsuit for PO value plus attorney fee. I offered them to settle it at cost if they show that the inventory was purchased post our PO and can not be used elsewhere. How much they would they get in court if they win? Do they really have a contract?

You were sent an incorrect product to fill part of your purchase order and you agreed to accept this partial order even though it was not what you ordered?

You owe for the product you received because you said you would accept it. You do not owe for any product that was ordered that was not compliant with the terms of your original purchase order if you did not agree to purchase the rest of these nonconforming goods.

A party to an agreement cannot simply change the terms of the contract without consent of the other party.

 

[Texan1021]

Let me clarify. The new order was placed with specific configuration and standard PO terms-conditions. They did not accept the standard PO terms or the specs. They completely changed it and both companies communicated via emails and agreed that there will be new PO only after the management approves their changed terms. We never did. However, they shipped a small shipment of older product not meeting 100% of our specs against the PO. We accepted the delivery and told them that we will use this for older product but new project still demands the revised PO. They asked us new PO many times but we told them to wait. On hold. During the time they shipped small shipment (8 weeks) and we received and paid for this, they claim that they purchased the material in good faith during this time. Their whole case will be based on acceptance of one unrelated shipment by us. They may not win but I don't want to spend money fighting this case. I want to offer a small percentage of the cost if they can meet our specs and terms. What does law says about how much they can be eligible for the inventory if they can prove that there is a valid contract? UNder what condition this contract (PO) can be considered valid? I am assuming they must have checked with legal expert to think that they have a case here!

 

[quincy]

Let me clarify. The new order was placed with specific configuration and standard PO terms-conditions. They did not accept the standard PO terms or the specs. They completely changed it and both companies communicated via emails and agreed that there will be new PO only after the management approves their changed terms. We never did. However, they shipped a small shipment of older product not meeting 100% of our specs against the PO. We accepted the delivery and told them that we will use this for older product but new project still demands the revised PO. They asked us new PO many times but we told them to wait. On hold. During the time they shipped small shipment (8 weeks) and we received and paid for this, they claim that they purchased the material in good faith during this time. Their whole case will be based on acceptance of one unrelated shipment by us. They may not win but I don't want to spend money fighting this case. I want to offer a small percentage of the cost if they can meet our specs and terms. What does law says about how much they can be eligible for the inventory if they can prove that there is a valid contract? UNder what condition this contract (PO) can be considered valid? I am assuming they must have checked with legal expert to think that they have a case here!

I don't see how they can support a legal action against you based on a conditional acceptance of goods if the conditions for acceptance have not been met.

If this involves a significant amount of money, you should speak to an attorney in your area.

 

[LdiJ]

Let me clarify. The new order was placed with specific configuration and standard PO terms-conditions. They did not accept the standard PO terms or the specs. They completely changed it and both companies communicated via emails and agreed that there will be new PO only after the management approves their changed terms. We never did. However, they shipped a small shipment of older product not meeting 100% of our specs against the PO. We accepted the delivery and told them that we will use this for older product but new project still demands the revised PO. They asked us new PO many times but we told them to wait. On hold. During the time they shipped small shipment (8 weeks) and we received and paid for this, they claim that they purchased the material in good faith during this time. Their whole case will be based on acceptance of one unrelated shipment by us. They may not win but I don't want to spend money fighting this case. I want to offer a small percentage of the cost if they can meet our specs and terms. What does law says about how much they can be eligible for the inventory if they can prove that there is a valid contract? UNder what condition this contract (PO) can be considered valid? I am assuming they must have checked with legal expert to think that they have a case here!

I am not at all sure that they have checked with a legal expert or if they did, that they were honest with that legal expert. I understand that you don't want to spend money fighting the case, but the more that you concede, the stronger you make their potential case.

Either you stand your ground that there was no approved PO and therefore they had no basis to pre purchase materials and therefore have to potentially litigate, or you roll over and play dead, and spend money on products you don't need or want.

 

[quincy]

Negotiating a settlement is always something to consider if the supplier is willing to negotiate for a reduced price on the nonconforming goods, if this is an acceptable solution to Texan, or the supplier might be able to return his inventory for a refund or credit and actually supply to Texan the goods that were ordered.

But a lawsuit seems an option that has little to support it, at least based on what has been said.