Your business runs on a supplier delivering goods on schedule, and the next shipment is not coming. Maybe the supplier has gone silent. Maybe it is claiming financial trouble, or shipped defective product and will not fix it, or signed up your competitors and walked away from you.
Whatever the version, the clock is running. Your options range from buying substitute goods and suing for the difference to emergency injunctive relief in the rare case that calls for it. Which one fits turns on the contract, the goods, whether substitutes exist in the market, how much time you have, and whether the supplier can actually pay a judgment.
The first hours
When non-delivery becomes apparent or imminent:
Confirm the breach. Sometimes apparent non-delivery is actually delayed delivery, miscommunication, or shipping problem. Confirm that the supplier is actually refusing or failing to deliver before treating the situation as breach.
Engage counsel. Even simple-looking supplier disputes can have significant downstream consequences. Early counsel involvement shapes the response.
Preserve communications. Emails, calls, text messages relating to the supply arrangement. The documentary record becomes essential evidence.
Document the impact. What is the non-delivery costing your business, production stoppages, customer commitments that cannot be met, downstream contracts at risk, lost sales, additional procurement costs.
Identify substitute sources. Whether substitute goods are available, at what price, and on what timeline. The availability of substitutes affects both damages calculation and remedy choice.
Review the contract. Force majeure clauses, limitation of liability provisions, dispute resolution provisions, and similar terms may affect the analysis.
UCC Article 2 framework
Texas sales of goods are governed by UCC Article 2, codified in Chapter 2 of the Business and Commerce Code. See UCC Article 2 Sales Disputes. Key provisions for buyer remedies:
Cover (Section 2.712). The buyer may purchase substitute goods in good faith and without unreasonable delay, and recover the difference between the cost of cover and the contract price plus incidental and consequential damages.
Market price damages (Section 2.713). When the buyer does not cover (perhaps because suitable substitutes are not available), damages are the difference between the market price at the time of breach and the contract price.
Specific performance (Section 2.716). For unique goods or in other proper circumstances. Less commonly available than damages but valuable when applicable.
Cancellation. The buyer may cancel the contract for material breach.
Incidental and consequential damages. Costs incurred in inspecting and handling the goods, costs of cover, and consequential damages including lost profits from non-delivery (subject to foreseeability under Hadley v. Baxendale).
Notification. Texas case law often requires the buyer to notify the seller of breach within a reasonable time under specific provisions. Failure to notify can affect some remedies.
Choosing remedies
The choice of remedy depends on the situation:
Cover when substitutes are available. When substitute goods can be purchased without unreasonable delay or cost, cover is typically the right primary remedy. The cover purchase replaces the missing goods; the damages claim captures the additional cost.
Market price damages when cover is impractical. When substitutes are not available, or only available on terms that do not support cover (extreme premium, long lead-times, quality issues), the market price measure captures the loss without requiring substitute purchase.
Specific performance for unique goods. Custom- manufactured items, items with specific provenance, exclusive territories or arrangements. When the goods genuinely cannot be replaced through ordinary market purchase, specific performance is the appropriate remedy. See Specific Performance in Texas.
Cancellation plus damages. For material breach, the buyer cancels the contract and pursues damages.
Multiple remedies. Some cases support multiple remedies, cover plus consequential damages plus cancellation. The remedies should be considered in combination, not just individually.
Emergency relief considerations
Most supplier disputes do not warrant emergency relief, substitute goods are typically available in the market, making damages adequate. But specific situations support emergency relief:
Unique goods at risk of disposal. When the supplier has specific goods committed to the buyer’s contract and is threatening to sell them to third parties. TROs preserving the specific goods may be appropriate.
Exclusive territory situations. When the supplier is threatening to breach exclusivity provisions by delivering to competitors. Injunctive relief preserving the exclusivity may apply.
Time-critical situations. When the buyer faces imminent harm that damages cannot remedy, particular customer deliveries with reputational consequences, time- sensitive operations.
Emergency relief in supply cases is the exception, not the rule. The buyer must show irreparable harm beyond what damages can compensate. See Emergency Relief.
Damages calculation
Damages calculations in supplier cases typically combine:
Cover differential. Cost of substitute goods less contract price. Direct out-of-pocket loss.
Incidental costs. Costs of finding and arranging substitute supply, inspection, handling, return of any defective product.
Consequential damages. Lost profits from inability to sell to customers, breach damages owed to downstream customers, lost business opportunities.
Foreseeability under Hadley v. Baxendale limits consequential damages. Damages that were not reasonably foreseeable at contract formation are not recoverable. See Lost Profits Damages.
Documentation of damages, invoices, financial records, customer communications, cover purchases, is essential to support the calculation.
Practical considerations
Supplier solvency. Cases against insolvent suppliers may not justify aggressive litigation. Bankruptcy considerations may dominate.
Ongoing business relationship. When the buyer wants to preserve the supplier relationship despite the dispute, litigation strategy differs from cases where the buyer expects no future business.
Insurance considerations. Some supply contracts have associated insurance coverage (commercial general liability, product liability, business interruption). Coverage analysis can affect funding of the dispute.
Force majeure considerations. Some suppliers raise force majeure defenses. The applicability depends on specific contract language and underlying circumstances.
Cross-border issues. International supply cases may implicate CISG (Convention on International Sale of Goods) rather than UCC Article 2, with different applicable rules.
Where the cover decision drives the case
We move fast. A supply dispute needs a quick response to preserve your options and pin down the breach. The cover purchase usually drives everything else: how you buy substitutes shapes the damages you can claim, so we coordinate the two from the start. Emergency relief is used only in the cases that genuinely warrant it, never as a reflex that runs up cost. We defend suppliers against buyer non-delivery claims on the same framework.
The single most useful thing a buyer can do is document the cover purchase carefully. That paper trail is the damages case. Get it right at the front and the rest follows.
Frequently Asked Questions
What remedies does a Texas buyer have when a vendor fails to deliver?
Under UCC Article 2, the buyer may cover by purchasing substitute goods from another seller and recover the difference between the cover price and the contract price as damages (UCC section 2-712); recover damages measured by the difference between the market price and the contract price (UCC section 2-713); cancel the contract; and in some cases obtain specific performance for unique goods (UCC section 2-716). Consequential damages including lost profits from non-delivery are also recoverable when foreseeable. The buyer's choice of remedy depends on the specific situation, including whether substitute goods are available and how time-sensitive the need is.
Can a Texas buyer obtain emergency relief against a non-delivering vendor?
Sometimes. When the goods are unique and damages would be inadequate, specific performance with supporting emergency relief (TRO and temporary injunction) may be available to prevent the vendor from selling to third parties or to compel delivery. The standard requires showing irreparable harm and other temporary injunction elements. Most commercial cases proceed through ordinary cover damages rather than emergency relief because substitute goods can typically be obtained in the market, making damages adequate.
What is the statute of limitations for breach of a Texas supply contract?
Generally four years from breach under UCC section 2-725 for goods contracts. The parties may by agreement reduce the period to not less than one year. The four-year period begins when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. The limitations defense is one of the first considerations in evaluating supply contract claims.