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Small-scale Supplier Protection

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1 Small-scale Supplier Protection on Wed Aug 13, 2014 5:51 pm


Arresto Menor
Good day, Attorneys.

We are a small company serving uniforms to companies and schools. Most of the time, if our customer is a new one, we require 50% down payment before starting production, and 50% percent upon delivery. We also accept retainer fee of 20% if the uniforms are custom made. For regular customers, we waive down payments if the order is small and can be funded by us.

Our contracts are always cash/check upon delivery, but for regular customers, we often tolerate one to two weeks delay in payments. Now, there had been two companies that we dealt with an unusual payment delay of one to six months. We could do nothing but wait until the payment finally comes. Due to payment delays, our capital can't be reused for other upcoming projects and debt interests keep piling up (Materials are specially on loan). This is really hard for small companies that are just juggling with their capital.

Our documentary contracts are just purchase orders and quotations. Including unliquidated damages fee in our quotations to protect us from delayed payment is out of the question. Many companies avoid these. And because we are a small scale company, we won't have any customers if we do this.

Is there any law that protects us from this kind of problem?

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