Q&As

Where a seller is bringing proceedings against a supplier for faulty goods and anticipates further action from buyers in the future, should the seller seek a declaratory judgment for further proceedings for stock sold as well as damages for unsold stock?

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Published on LexisPSL on 05/01/2021

The following Dispute Resolution Q&A provides comprehensive and up to date legal information covering:

  • Where a seller is bringing proceedings against a supplier for faulty goods and anticipates further action from buyers in the future, should the seller seek a declaratory judgment for further proceedings for stock sold as well as damages for unsold stock?
  • Initial claim between A and B
  • Contribution claim if C sues B
  • Settlement between A and B
  • Seeking a declaration from the court
  • Other considerations

We have assumed that the contract between A and B is a business-to-business contract.

Initial claim between A and B

B’s claim against A in respect of the unsold stock will be a claim in damages and potentially also for lost profit. The extent to which these are recoverable will depend on the terms of the contract itself but bear in mind considerations such as section 4(1) of the Supply of Goods and Services Act 1982 and section 14 of the Sale of Goods Act 1979. See Practice Note: Implied terms in contracts for goods and services. B may also wish to consider whether it has grounds for returning the unsold stock, which may depend on whether B has already ‘accepted’ the goods, see Practice Note: Goods—delivery and acceptance and the following Q&A: If in a business to business contract for the provision of goods, the buying party rejects goods alleging non-compliance with one or more of the implied terms in the Sale of Goods Act 1979 as to quality, fitness for purposes etc and insists that the seller comes and takes the goods away, can the selling party 'safely' agree to take the goods back without prejudice to its right to sue for payment of them?

For guidance on claiming damages for breach of contract, see Practice Notes:

  1. Contractual damages—general principles

  2. Contractual damages—pecuniary losses

Contribution claim if

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