Company in Mexico did not honour contract

Question posted by Kathryn Smith, on behalf of AVS in CM22

we bought from a company in Mexico goods, but the price went up and they decided not to honour the contract, they did not deliver , we had already sold the goods, therefore we had to buy from another supplier and we had to pay much higher price.
How can we make this company in Mexico to compensate us for the lost we incurred for their negligence.

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Jonathan Harrison, on behalf of Baroni Limited in CR2.

Unless it is worth a great deal of money the answer is probably it isn't worth doing anything. Just chalk it up to experience. It is for these reasons you should use a specialist export partner.

My suggestion is talk to a specialist legal firm and ask them. They normally do an initial consultation for free. I suggest that they will probably give you the same message. You need to decide if taking further action, which means legal, is worth it.

Hope this helps.

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William Cawley, on behalf of Loudouns in EC4M.

Hi Kathryn -
the short answer is "yes" - you can recover damages which: "directly and naturally resulted" from your seller's breach of contract in failing to deliver the goods. I am assuming that English law applies to your purchase contract (this is an important point to check). Your damages would usually be calculated as: "the difference between the contract price and the market price of the goods at the time when they ought to have been delivered or (if no time was fixed) at the time of the refusal to deliver" (The quoted texts are from Sales of Goods Act 1979, if you're interested). You were forced to buy substitute goods to fulfill your obligations to your on-buyer - and so long as you purchased those goods at a reasonable price, your damages shall be the difference between original contract price and substitute goods contract price.
But do check the law and jurisdiction clause - and remember, even if you do have a good claim in English law against your Mexican seller, and you obtain a judgement against them, if enforcement of the judgement looks unlikely or impossible, it may be best to clench your teeth and, if possible, do a deal with them to recoup as much of your loss as possible. If you are still dealing with them, and there a regular shipments in the pipe line, try and negotiate a reduction in price per item. But if the company has assets, and especially if you have arbitration provided for in your contract, it could be worthwhile proceeding against them (if you win the claim, you can add about 66% of your legal costs to the awarded sum for the Mexicans to pay).
Hope this helps.
William

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Gabriela Castro-Fontoura, on behalf of Sunny Sky Solutions in Uruguay.

Hi
First of all, I am sorry you had to go through this. As you will know, this can happen when selling into the UK, too, but things can get complicated when you cannot knock on someone's door or meet face-to-face. It takes time to build relationships and to trust someone, particularly far away.
I'm with Jonathan on this one but I have contacted a UK-Mexican commercial lawyer whom I hope can give you another perspective. Don't let this deter you from doing business with Mexico or any other Latin American countries. Not everyone is dishonest, there are very professional and honest people on this side of the Atlantic that you will find a pleasure to do business with. You've learnt some pretty good lessons now - I wish you all the best in future ventures.
Kind regards
Gabriela

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Hi Kathryn, we are looking for the information required, we'll come back to you shortly. Thank you, UKTI Mexico team.

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Dear Kathryn,
We have consulted a Law Firm and they told us that your lawyer should check the contracts in order to determine which are the legal actions that can be taken, as it is necessary to know more about the documents and the information of the operation. You can find a list of lawyers in Mexico at: https://www.gov.uk/government/publications/mexico-list-of-lawyers
You can contact our team at UKTIMexico@fco.gov.uk . We look forward to hearing from you.
UKTI Mexico team

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