How to Avoid The Breach of a Vendor Contract During the Pandemic

Vendor contract

The COVID-19 pandemic has brought forth many challenges for business owners to tackle. Dealing with the shutdown of operations earlier this year and establishing the safest ways to return to work have already put a lot of pressure on businesses to maintain safe protocols and turn a profit. Because of this, it’s important for business owners to adhere to all vendor contracts despite the struggles caused by the ongoing coronavirus pandemic. Knowing the most efficient ways to keep your important business relationships afloat and how to avoid a potential breach of contract can help business owners maintain company operations.

When a breach of contract occurs, it can have drastic effects on those involved. Entering into business contracts with vendors gives rise to obligations that must be fulfilled by the parties involved. If one party fails to fulfill its contractual obligations, this is referred to as a breach of contract. While each scenario is unique, a breach can occur if a party fails to perform on time, does not perform in accordance with the agreement terms, or simply doesn’t perform at all.

Maintaining Vendor and Supplier Relationships

Following the initial impact of COVID-19, our new normal has forced businesses to adapt – including finding new ways to operate under strict safety standards. In order to best protect and preserve ongoing business operations during these uncertain times, business owners and decision makers must ensure they review and understand the current contracts and situations with vendors and suppliers. You can prepare your business to avoid breaching contacts by:

Identifying Issues Before They Become Problems

The global supply chain has grown increasingly complex over the years, and the pandemic has disrupted it like never before. It’s not just business owners who are doing all they can to stay afloat; suppliers – including independent contractors, subcontractors, and materials and inventory providers, are also currently focused on keeping their own doors open. Despite suppliers’ prior reliability, the current circumstances can lead to a weak supply chain process that can leave businesses stranded. Because of this, it’s incredibly important to identify any potential issues within the supply chain before they become problems.

Mitigating this risk could involve having multiple backup suppliers in different locations. Analyzing each part of the supply chain process will help business owners identify potential bottlenecks and anticipate unforeseen risks and/or delays. Additionally, training workers that are part of the supply chain process to regularly report potential issues will also help business owners get important information in real time.


When reviewing vendor contracts, it’s important to look for solutions the parties can discuss – including a renegotiation of contract terms – when attempting to remedy a potential breach. This includes discussing and understanding force majeure clauses within the contract that potentially excuse one or more parities’ performance obligations in certain circumstances. In addition, business owners must have a clear understanding of what items need to be negotiated – including preparing to respond to varying reactions and potential counter offers from vendors and suppliers.

In doing so, it is helpful to have the insight of an experienced contracts attorney to identify potential terms that may need renegotiating. Carefully reviewing relevant contractual provisions with qualified individuals can help business owners prioritize which contract terms to fight over and where to potentially back off if needed.

Providing Support

Negotiating with vendors and suppliers during these difficult times can be uncomfortable for business owners, particularly between companies with longstanding working relationships. Rather than immediately entering termination discussions when something goes wrong, making necessary contractual adjustments can allow each party for more time to fulfill their duties. Other potential adjustments could entail smaller payment installments with lower interest rates to prevent default and/or the need to file for bankruptcy.

Houston Commercial Litigation Attorneys

Maintaining business relationships amid the ongoing pandemic may seem impossible. In the event a breach of contract does occur, it’s important to have the knowledge and insight of an experienced commercial litigation attorney. At Feldman & Feldman, we understand the complexities of business and vendor relationships and pride ourselves on working closely with our clients to get the best results possible. If your business is in need of assistance following a breach of vendor contract, contact us today to learn more.