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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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Hi, We were contacted by a company in Italy wanting a large

Customer Question

Hi,
We were contacted by a company in Italy wanting a large order. Emails were exchanged and then an order was placed giving details of prices agreed and quantities together with deadlines of when the goods should be delivered.
Because deadlines were tight and the order was large we asked for Purchase orders.
They sent a PO for the first part of the order which had the tightest deadline and said (Quote)
"Meanwhile I confirm you that regular POs for the rest - as agreed - will follow shortly. You will then receive (as soon as possible and anyhow within a couple of weeks) other orders, with the following split (file was attached in email giving all details of order)
These orders will take a while since we have some internal procedures and formalities to fulfill before we can phisically issue the PO. We are currently working on it. Please confirm that you can meet our deadlines" (Unquote)
Needless to say, because i am now on here ! The company has now said they don't want the second part of the order, however, we have already bought and produced the items !!
Have we just learnt a valuable lesson of producing goods without a PO or do we have any rights here
Thanks for your advise
Regards
Tracy
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.
Alex Watts : Hello Tracy my name is ***** ***** I will help you with this.
Alex Watts : For now please let me know the value of the sums outstanding and was this just done by email, ie no terms signed please?
Customer:

The order was for £90,000 they have issued a PO for £21,000 but sent the order for the balance in an email saying because of formalities they needed to get each department to issue a PO (the balance is for 16 separate vessels) (The company is a cruise liner). The formalities were setting me up on their suppliers records which they did following submission of all their forms. Everything was done on email from the strategic buyer in charge. It started with us sending samples and them agreeing which products they wanted and the prices based on an order of 22,000 units in total. The only thing i have signed is there "suppliers forms" so that i can be set up on their systems

Customer:

ps.. they sent me a file (attached in email) with "total quantities to be ordered"

Customer:

Hi, we have been sent an email saying you have answered our question and charged our card? We have not received a reply

Customer: replied 2 years ago.
Relist: Other.
We submitted a question at 8.30 am this morning and paid for High Urgency. We have not received a reply even though Alex Watts is showing as "answered" and has been offline all morning. All she did was ask for more information and then offline ... not happy
Customer: replied 2 years ago.
Relist: Incomplete answer.
Hi,
We were contacted by a company in Italy wanting a large order. Emails were exchanged and then an order was placed giving details of prices agreed and quantities together with deadlines of when the goods should be delivered.
Because deadlines were tight and the order was large we asked for Purchase orders.
They sent a PO for the first part of the order which had the tightest deadline and said (Quote)
"Meanwhile I confirm you that regular POs for the rest - as agreed - will follow shortly. You will then receive (as soon as possible and anyhow within a couple of weeks) other orders, with the following split (file was attached in email giving all details of order)
These orders will take a while since we have some internal procedures and formalities to fulfill before we can phisically issue the PO. We are currently working on it. Please confirm that you can meet our deadlines" (Unquote)
Needless to say, because i am now on here ! The company has now said they don't want the second part of the order, however, we have already bought and produced the items !!
Have we just learnt a valuable lesson of producing goods without a PO or do we have any rights here
Thanks for your advice
Regards
Expert:  Ash replied 2 years ago.
Apologies for the delay I was in Court but am here to help you.
The balance of the items produced is £69,000?
What is the reason for cancellation?
Customer: replied 2 years ago.

No reason. They called and said that they did not want all the items in their warehouses even though the deal was done on bulk order. They have said that they will take 1000 items periodically and promised to send another PO but as yet, have not

Expert:  Ash replied 2 years ago.
And you want the cost of the items produced back, or a more expensive price on the items they had because of the price break/discount?
Customer: replied 2 years ago.

Do i have the right to get the cost of the items back ? I am guessing not and also i am not sure i want them to know what i paid versus what i charged them !! Do i have any rights because i produced these items based on an email order not an official PO.

Yes, regarding the more expensive price. We agreed a price per unit based on 20k items now they, apparently, only want 1,000 items per order. I presume I am entitled to increase the price even though they asked me to confirm i would hold the price until 31.08.15 because they have put this information in their systems

Expert:  Ash replied 2 years ago.
What is it you want to achieve then?
My view the email is a contract. They did not say we are placing an order subject to a valid purchase order. They said - we want the items.
Customer: replied 2 years ago.

We would love to tie them to the order, however, we are a small company based in the UK and they are a large multi-national cruise liner based in Italy, and we simply do not have the resources (especially after laying out so much money on this order) to take them to court or to challenge them. We could try emailing them and see where we get but we are unsure what to say. As a last resort we definitely need to increase our prices because we now have to rent storage to store this order

Expert:  Ash replied 2 years ago.
What is your loss of profit and costs to date please?
Customer: replied 2 years ago.

Costs to date are £56,000, with rent starting next week at £28 pw. The profit on the whole deal was going to be £26,000

Customer: replied 2 years ago.

We have not "lost" anything yet because we still have the goods, we are simply out of pocket to the tune of £56k which will take us a year to sell these goods elsewhere

Expert:  Ash replied 2 years ago.
Thank you. I think you certainly have a claim for breach of contract. By them saying they are going to order the items it certainly seems like acceptance of a contract. Ideally you would want to make sure the whole order is in writing, but given the emails I think you can get over that.
You need to write and set out your losses and request a payment of the full amount within 14 days or say you will go to Court within 14 days. You should make sure you send this recorded delivery and keep a copy. Post rather then email or you can do both.
If they do not pay you then you can issue proceedings in the County Court. You can do this by completing form N1 http://hmctsformfinder.justice.gov.uk/courtfinder/forms/n001-eng.pdf and take it to your local County Court.
The Court will then issue a claim which a copy will be sent to the Defendant who will have a limited time to defend it, if not you can enter Judgment and enforce.
You will also need to complete form N510 - http://hmctsformfinder.justice.gov.uk/courtfinder/forms/n510-eng.pdf for service in Italy of a claim form.
If the matter is defended it will be set down for a trial. As the claim is over £10,000 which is the small claim limit you will need representation at the final trial because of Court procedure and rules of evidence.
Can I clarify anything for you about this today please?
Alex
Ash and other Law Specialists are ready to help you
Customer: replied 2 years ago.

Thank you for your help

Expert:  Ash replied 2 years ago.
Thanks for the question.

Alex