Recovering Damages from a Supplier for Defective Goods
Can you recharge damages to a supplier if you had to compensate a buyer for repair costs because of the poor quality of the goods?
What should you do if you had to incur legal costs in a court dispute with your buyer? How do you reimburse these costs from the supplier?
The case on recovering damages from FCA RUS gives answers to these questions. Senior associate Ksenia Shcheglova comments.
Case was handled by
A former Jeep dealership revealed a poor quality automatic transmission on one of the cars it sold. The buyer paid for its repair. His financial costs were recovered from the seller of the car. An expert review established that the cause of the malfunction was of a manufacturing nature. The supplier, however, completely ignored that trial: not a single argument or evidence was submitted against the buyer's claims. The task of the lawyers was: to charge the supplier for losses since it is responsible for the quality of its goods.
The complexity of the case: the contract contained provisions that contradicted each other: on the one hand, the supplier is held liable for all losses incurred, on the other hand, the parties are not held liable to each other for any incidental or indirect costs.
The lawyers did the following:
1. Referred to the invalidity of one of the clauses of the contract. The applicable law prohibits the complete exclusion of liability in the form of recovery of damages by agreement of the parties.
2. Proved that the recovery of legal fees incurred by the seller in the course of the legal dispute with the buyer was reasonable. As a result, the client managed to recover not only the money awarded by the court to the Buyer in full but also all amounts that were spent on legal services in the case it lost.