In many cases where two businesses have a contract dispute, the issue is that a deadline was missed. After all, including the date on the contract is one of the most fundamental parts of drafting it. This date can specify when the contract is supposed to be fulfilled.
Even if one company misses the deadline, it may still technically fulfill the contract. That business owner will claim that they didn’t cause any financial harm, so they shouldn’t have to pay compensation to the other party. They did uphold their end of the deal, even if they were a few days late.
However, the other business owner will claim that they did suffer harm and deserve compensation. So who is correct? How could missing a deadline cause financial issues?
Delaying production
There are many potential examples of how this could happen, but one of the most common is when one business requires a delivery in order to be productive. They need the parts and materials that they’ve ordered so that the assembly line can run.
If the delivery is even one day late, production at that facility grinds to a halt. Workers are then being paid hourly wages, even though there’s nothing for them to do. When production levels dip, product orders may be delayed or missed. This can cause the business serious financial harm. It could set them back by thousands of units to have a lost day of production. How many missed sales do those units represent?
This shows how even missing a deadline can have a major financial impact, so business owners need to know exactly what legal steps they can take.
