[Question] business protection against bad suppliers

[SilverNodashi]

I wonder if someone can shed some "legal?" light on this matter.

Fortunately I've never been down this road but now sit with a situation where I acquired "professional services" of another company but they simply don't deliver and I have signed a 12 month contract. As far as I know, a company can't take another company to the small claims court, nor do I think the National Credit Act will help in this case.
The agreement was signed between 2 PTY's, if that helps at all. The supplier don't deliver on their promises and I can't get any correspondence from them. The services mount to R400/pm which I could rather add to my marketing or sales budget.

What recourse can I take?

[AndyD]

If they're not performing then I assume they're in breach of contract. Can't you just give them due warning and cancel the contract?

[SilverNodashi]

If they're not performing then I assume they're in breach of contract. Can't you just give them due warning and cancel the contract?

The thing is, I signed a 12 month contract, believing that I'll get a service which I purposefully asked for but found out it's not what I wanted. I don't want to go into details yet since it could turn out bad for either of us.

But, imagine signing a 24month cellphone contract with a cellular company and after signing the contract you get something else than what you wanted. How does a business, in a case like take, take legal action to have the signup fee refunded and the contract cancelled? Legally I now need to pay for a service which is of no use to me and I didn't even get what I actually need.

[Dave A]

Reading between the lines here - are they not delivering what they are contracted to deliver, or is it a case of the contract doesn't deliver what you expected it to deliver?

[SilverNodashi]

Reading between the lines here - are they not delivering what they are contracted to deliver, or is it a case of the contract doesn't deliver what you expected it to deliver?

Dave, without going into too much details for various reasons,

I told them I need ProductX, in order to comply with a requirement of another vendor. They said "sure we can do that". I signed a 12 month agreement + setup fee + 2month's security deposit. VendorY then replied and said, "sorry this doesn't comply". I purposefully told SupplierA that I need ProductX to complay with VendorY, but now the product doesn't comply and when I told them this, they stopped all communications.

[sterne.law@gmail.com]

A contract is breached when they don't deliver or fail to deliver as per agreement.
Failure to deliver may also be linked to time. Time is sometimes specifically stated, if so that is the date.

Breach requires notice -
of the breach and the time to rectify.
On your facts the following seems what you would want -
You can seek cancellation of contract. - Probably also deposit returned
Damages - if there is a price difference in the product and have already quoted, then you could claim that.
The faulty product can be returned and your money refunded

[SilverNodashi]

Hi Sterne,

Thanx for the replies. I know they're in breach of contact, but how do I take recourse against them to cancel & refund? The Small Claims Court would only help if I signed the contract in my own personal capacity, but I signed the contract as a company (PTY Ltd) so they won't help me. And a lawyer will cost me much more than the money I spend on the contract.

[sterne.law@gmail.com]

Send them a letter notifying them of breach by virtue of malperformance and seven days to correct, failing which you are cancelling the contract.(See if the contract has specific terms regarding breach and notice period. there is no set amount of days required - reasonable is the standard.)
That will take care of the contract. They would have to sue you for a so called breach to claim payment.

If you are paying more for the product and cant pass the increase on to client, then you will need to weigh up if there is any damages and if so how much. By the sounds of it, the amount may not be worthwhile.(On an aside, damages could included a loss of contract from your client).

[SilverNodashi]

Thanx guys. This issue kinda "resolved itself". There was some miscommunication from the "sales rep" to the admin clerk who setup the contract and invoices. We managed to sort it out, but I had to lay some complaints with the management team first.