How to recover the cost of a supplier's mistake

This page is general guidance for UK businesses, not legal advice. For a disputed claim of any size, speak to a solicitor about your own contract.

Why supplier claims get refused

When a supplier’s error costs you a remake or a return visit, the usual pattern is the same. The fault is put right by eye, the job moves on, and weeks later someone tries to claim. The supplier asks for evidence, there isn’t much, and the claim is refused or settled for the cost of the part. The labour, the van and the delay stay with you.

The reasons are nearly always one of these:

• No agreed route. Your terms don’t say you can charge back the cost of putting their errors right, so every claim is a negotiation.
• No evidence. Nobody photographed the fault, recorded when it was found or kept the delivery note.
• Found too late. The item was booked in when it arrived but only checked weeks later, when the van was being loaded.
• The order was the problem. The special that went wrong was described in free text, or missing from the order altogether.

Check your own order first

Before claiming, compare the supplier’s paperwork with your own purchase order and drawing. In project businesses, a large share of what gets called a supplier error started with the order: a line missed or keyed wrong, parent and child lines that disagree, or a special (handing, finish, edging, fitting pack) carried in a note the supplier had to interpret.

If the order was the problem, the claim will fail, and it should. The fix is on your side: give the things that keep failing proper fields with set options, and check every order against the quote and drawing before it goes. Our map of where margin leaks covers this stage in more detail.

The evidence that makes a claim stick

When the fault really is the supplier’s, a claim is far easier to win with five things:

1. What you ordered: the purchase order and the drawing or specification it referred to.
2. What arrived: the delivery note and the goods-in record.
3. What was wrong: dated photos and a short description, taken when the fault was found.
4. When you found it: the date, ideally at goods-in rather than on site.
5. What it cost: remake, labour, van and travel, and any delay, costed at an agreed rate.

Timing matters for a legal reason as well as a practical one. Under the Sale of Goods Act 1979, a business buyer can be treated as having accepted goods once a reasonable time has passed without rejecting them, which can narrow the remedies available. Checking specials against the drawing at goods-in protects your position and gives you time to get replacements before the job is due.

Put a route in writing

The strongest position is one agreed before anything goes wrong. With the suppliers that matter most, agree in writing:

• A quality agreement. What a conforming delivery looks like, written codes for specials, and how faults are reported.
• A contra-charge route. That the cost of putting their errors right (labour, travel and materials at agreed rates) can be charged back, and how quickly they must respond.
• A regular review. A short quarterly look at their faults, costed from your own records, with numbered actions on both sides.

Business-to-business contracts can limit the quality terms the law implies into a sale of goods, but under the Unfair Contract Terms Act 1977 such a limit only holds in so far as it is reasonable. Read your suppliers’ terms as well as your own: they decide who carries the cost.

Where to start

Pull last year’s supplier-related remakes, return visits and credits, and sort them into two piles: started with the supplier, and started with our order. The first pile tells you which suppliers to review and what to claim. The second tells you what to fix in your own process.

Our Supplier Quality Review does this with a supplier who keeps getting it wrong: we cost their failures from your records beforehand, review your purchase orders as well as their work, and agree numbered actions written up the same day.