Supplier Delivered Wrong Goods: Notice to Remedy or Demand?

You ordered 500 units of Product A. The supplier delivered 500 units of Product B. Your production line is stopped, your customer is waiting, and you need a solution now.

Do you give the supplier a chance to fix it, or demand compensation immediately? The answer depends on your contract, the urgency, and what outcome you actually want.

Understanding the breach when a supplier delivers wrong goods

When a supplier delivers goods that do not match the purchase order or contract specification, they have breached the contract. You are entitled to a remedy.

The breach is typically:

• Breach of an essential term — the goods are fundamentally different from what was ordered, or correct specification was critical to the contract
• Breach of a non-essential term — the goods are incorrect but the supplier can reasonably fix the problem within a short timeframe

This classification determines whether you must give the supplier an opportunity to remedy, or whether you can immediately reject the goods and claim damages.

When you must give the supplier a chance to remedy

Australian contract law generally requires you to act reasonably. If the breach can be fixed without significant prejudice to you, a court will expect you to give the supplier an opportunity to remedy before claiming damages.

Use a Notice to Remedy Breach when:

• The contract requires notice before termination or claiming damages
• The supplier can replace the goods within a reasonable timeframe
• You have not yet suffered unrecoverable losses
• The incorrect goods have not been used, altered, or on-sold
• You want to preserve the commercial relationship
• The breach is not fundamental to the contract’s purpose

A Notice to Remedy Breach formally notifies the supplier of the breach, specifies what they must do to fix it (deliver the correct goods, collect the wrong goods, issue credit), and sets a reasonable deadline — typically 7 to 14 days.

If the supplier remedies within the deadline, the breach is cured. If they fail, you then have clear grounds to terminate the contract, reject the goods, and claim damages.

When you can demand immediate compensation

If the breach is serious, time-critical, or the supplier has already failed to fix the problem, you do not need to give them another chance.

Use a Letter of Demand when:

• The contract allows immediate termination for material breach
• You have already given the supplier a chance to fix it and they failed
• The delay has caused you quantifiable loss (lost sales, production downtime, penalty clauses with your customer)
• The wrong goods cannot be used and replacement is no longer commercially viable
• The supplier has been unresponsive or has indicated they will not remedy the breach
• You need to recover your losses immediately and move on

A Letter of Demand sets out the breach, quantifies your loss, and demands payment within a short deadline (usually 7 days). It makes clear you are claiming damages, not offering the supplier another opportunity to perform.

What the Australian Consumer Law says

If you are a small business purchasing goods for business use under $100,000, you may have protections under the Australian Consumer Law (ACL) in addition to your contract rights.

Goods must:

• Match the description provided by the supplier
• Be fit for the purpose disclosed to the supplier
• Be of acceptable quality

If the supplier delivers goods that do not match the description, you have a right to reject the goods and demand a refund or replacement — but only if you act quickly. Once you accept the goods (by using them, altering them, or keeping them beyond a reasonable inspection period), your remedy is typically limited to repair, replacement, or compensation for the difference in value.

The ACL does not override your contract, but it provides a statutory baseline.

Quantifying your loss

Whether you issue a Notice to Remedy or a Letter of Demand, you need to know what the breach has cost you.

Direct losses (typically recoverable):

• Cost of the incorrect goods (if you paid upfront)
• Cost of returning the incorrect goods
• Cost of sourcing replacement goods urgently (price difference)
• Freight and handling costs

Consequential losses (recoverable if foreseeable):

• Lost profit on the sale you could not fulfil
• Penalty payments to your customer for late delivery
• Production downtime (quantified as lost revenue or fixed costs during stoppage)
• Cost of hiring alternative equipment or labour to work around the problem

Keep evidence: purchase orders, invoices, correspondence, delivery dockets, photos of the wrong goods, quotes for replacement, records of lost sales or penalties incurred.

The practical decision tree

Step 1: Check your contract

Does it require you to give notice before claiming damages or terminating? Does it specify a remedy period? Does it exclude consequential loss?

Step 2: Assess the urgency

Can you wait 7–14 days for the supplier to fix it, or has the delay already caused unrecoverable loss?

Step 3: Consider the relationship

Is this a one-off supplier or a long-term partner? Do you want to preserve the relationship or are you done?

Step 4: Calculate your loss

If the loss is small and the supplier can fix it, a Notice to Remedy is proportionate. If the loss is significant and growing, a Letter of Demand is appropriate.

Step 5: Choose your document

• Notice to Remedy Breach = “Fix this within 14 days or I will terminate and claim damages”
• Letter of Demand = “You breached, I have quantified my loss, pay me within 7 days”

How ClaimDone helps small businesses with supplier disputes

ClaimDone generates both Notices to Remedy Breach and Letters of Demand tailored to Australian contract law and the Australian Consumer Law.

For a Notice to Remedy Breach:

You upload your purchase order, delivery docket, and photos of the wrong goods. ClaimDone’s Proprietary AI Engine drafts a formal notice citing the specific breach, the remedy required, and a reasonable deadline. The notice is prepared for you to send via email or registered post.

For a Letter of Demand:

You provide the same evidence plus details of your quantified loss. ClaimDone drafts a demand letter citing the breach, the applicable law, and the amount owed — and sends it automatically to the supplier on your behalf.

Both documents are generated in under 60 minutes for a flat fee. No lawyer required for straightforward supplier disputes under $100,000.

What happens after you send the notice or demand

If you sent a Notice to Remedy Breach:

The supplier has until the deadline to deliver the correct goods, collect the wrong goods, or otherwise remedy the breach as specified. If they comply, the matter is resolved. If they fail, you then send a Letter of Demand or proceed to tribunal.

If you sent a Letter of Demand:

The supplier has 7 days (or the deadline you specified) to pay. If they pay, the matter is resolved. If they ignore it or dispute the amount, you can file a claim in your state’s small business tribunal or civil court.

Most supplier disputes settle after a formal notice or demand. Suppliers know that if the matter proceeds to tribunal, they will face the claim plus your filing fees and potentially an adverse costs order.

When to escalate to a tribunal or court

If the supplier does not remedy the breach or pay your demand, you can file a claim in:

• Small business commissioner (free mediation in some states)
• State civil and administrative tribunal (VCAT, NCAT, QCAT, etc.) for claims typically up to $10,000–$25,000 depending on jurisdiction
• Magistrates or District Court for larger claims

ClaimDone can prepare your tribunal application, including the statement of claim, witness statement, and supporting evidence bundle.

For claims over $100,000 or disputes involving complex contractual interpretation, you should engage a commercial lawyer.

Final checklist: Notice to Remedy or Letter of Demand?

Choose Notice to Remedy Breach if:

• Your contract requires it
• The supplier can fix the problem within 7–14 days
• You have not yet suffered major loss
• You want to preserve the relationship

Choose Letter of Demand if:

• You have already given them a chance and they failed
• The delay has caused quantifiable loss
• You need immediate compensation
• You are ready to terminate the relationship and move on

Both documents are legally effective. The choice depends on your commercial reality, not legal formality.

Get your supplier dispute document in 60 minutes

ClaimDone prepares Notices to Remedy Breach and Letters of Demand for Australian small businesses dealing with supplier breaches. Upload your evidence, answer a few questions, and receive a professionally drafted document citing the applicable law.

Start your Notice to Remedy Breach now — flat fee, no subscription, done in 60 minutes.

Frequently Asked Questions

Can I reject goods that don't match my order and demand a full refund?

Yes, if the goods materially differ from your purchase order and you have not accepted them (by using, altering, or keeping them beyond a reasonable inspection period). Under the Australian Consumer Law and contract law, you can reject non-conforming goods and demand a refund or replacement. Act quickly — once you accept the goods, your remedy may be limited to repair or compensation for reduced value.

Do I have to give the supplier a second chance to deliver the right goods?

It depends on your contract and the severity of the breach. If your contract includes a clause requiring notice before termination, or if the breach can be remedied without significant loss to you, a court will typically expect you to give the supplier a reasonable opportunity to fix it. If the breach is fundamental, time-critical, or you have already given them a chance, you can demand immediate compensation.

What if the supplier says the wrong goods are 'close enough' or 'equivalent'?

Unless your contract allows the supplier to substitute equivalent goods, they must deliver exactly what was ordered. Goods must match the description in the purchase order. If the supplier delivered something different without your agreement, that is a breach of contract regardless of whether they consider it equivalent.

Can I claim for lost profit if the wrong goods caused me to miss a sale?

Yes, if the loss was foreseeable at the time you entered the contract. If the supplier knew you needed the goods to fulfil a customer order, or if the urgency was clear from the purchase order, you can typically claim consequential losses including lost profit, penalty payments, and production downtime. Keep evidence of the lost sale and the causal link to the supplier’s breach.

What happens if the supplier ignores my Notice to Remedy Breach?

If the supplier does not remedy the breach by the deadline specified in the notice, you can then issue a Letter of Demand for damages, terminate the contract, and file a tribunal claim if they do not pay. The Notice to Remedy creates a clear record that you gave them a fair opportunity to fix the problem, which strengthens your position if the matter proceeds to tribunal or court.