Payment terms in a contract

In this situation, the supplier may not have a legal right to claim the 75% payment based solely on the clause that states payment is due upon the machine's arrival at the site. Since the machine is defective and not functioning, your company has a legitimate reason to withhold payment. Generally, contracts imply that goods delivered should be of satisfactory quality and fit for purpose. If the machine does not meet these standards, it could be considered a breach of contract by the supplier.

Regarding legal steps your company can take against the supplier for providing defective machinery, here are some options:

1. Send a Formal Notice: Draft a formal letter to the supplier outlining the defects of the machine, your refusal to pay, and request for rectification or replacement. This serves as a written record of your complaint.

2. Negotiate: Engage in discussions with the supplier to resolve the issue amicably. You can propose a remedy, such as repairing the machine or replacing it with a functioning one.

3. Invoke Contractual Remedies: If the contract includes specific clauses regarding defects, warranty, or performance, you can invoke those clauses to seek remedies.

4. File a Complaint: If negotiations fail, you may consider filing a complaint with the relevant consumer forum or regulatory authority, depending on the nature of the contract and the parties involved.

5. Legal Action: As a last resort, you could initiate legal proceedings against the supplier for breach of contract, seeking damages or specific performance.

It's advisable to consult with a legal professional to assess your specific situation and determine the best course of action based on the contract terms and applicable laws.

In commercial dealings the balance of convenience remains with the buyer.

The supplier shall claim and have payment as agreed. 

Since you are already in an agreement and the payment terms shall be binding. If the payment of 75% is against mere delivery of product then you are liable to pay as the delivery is already made.

If it is stated as ; 75% of payment shall be made upon delivery acceptance and if you did not accepted the delivery then the supplier cannot calim payment upon mere delivery

To the respected fellow experts

First I must give my sincere thanks for replying my queries. With your prudency all of you clarify the matter very elaborately.

However can you clarify two things:

1. Can a Company approach for remedy under Consumer Protection Act 2019? I ask this question as because the Company use the machine for 'commercial purpose'.
2. As the machine is defective one which we discovered only after delivery still can we have to make 75% payment for such defective machine(not at all functioning)? And we make 75% payment as per the clause what will be our leagl steps against that supplier?(Even if we make payment for defective machine know it is defective one).

Agian my sincere thanks

Regards

Abhijit

In commercial transactions (I have 29 years' experience) things do not work the way lawyers think. It is mostly the buyers' market. Payments are made only after supplys are made. Even then the last instalment will be against bank guarantee for due performance for a certain period which can run into months or years. If the machine is not working even in the beginning the buyer will not pay even if payments are due as per contract. Lawyers should understand that things do not move as per wording of contracts. If the machine is not working the supplier should set it right. If he goes to court he can go on paying to court and lawyers. Apart from getting money from the buyer he should protect his name also in the market. Why should a buyer pay for a machine that is not working?

If you are the buying party your position also is unenviable. Your business also has got dead-locked. But just by paying the supplier you are not going to help yourself. Practical experience is more relevant than knowledge of law.

If the vendor sold a defective product which was detected even before it was installed, then the liability is on the vendor.

Therefore the buyer has got rights to repudiate the claim.

Yes, the buyer can repudiate the claim.

A company cannot approach a Consumer Court for remedy. A petty trader like a photocopy service provider or a printing service provider can approach Consumer Court.

The company is not covered under the definition of a "consumer"a provided in CP Act, 20219