The Buyer failed to fulfill its financial obligations within deadline prescribed by the contract
28 May, 2024
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A client, seller who entered into contracts with two companies of the same group, applied to Interlegal. The contracts provided supply of over 26,000 metric tons of Ukrainian corn. However, the buyers failed to fulfill their financial obligations within deadline prescribed by the contract.
After several attempts to negotiate and to settle the situation, the seller was forced to agree on changing terms of the contract by signing a supplementary agreement on providing a discount to buyers in case of payment of the agreed amount within the prescribed period.
Despite this, the buyers paid the agreed amount later than the set deadline, thus voiding supplementary agreement. That is, the parties returned to initial terms of the contract. It means that the discount was cancelled, and the seller issued an invoice on the discount amount exceeding 500,000 US dollars. The invoice currently remains unpaid, but Interlegal team knows what to do in such cases.
If the invoice is unpaid within the additional set period, our team will represent the seller in GAFTA arbitration.
This case is a vivid example of the impact of economic pressure on contractual relations within international trade. The buyer’s failure to fulfill their obligations in due time forced the seller to take financial risks and to accept new terms of the contract.
Further case consideration will be posted later. If you follow updates on our social media, you will not miss anything interesting.
