A 20 store retail women’s clothing chain ordered a group of summer ensembles from a well-known manufacturer for delivery by a specific date in connection with a chain-wide nationally advertised promotion. The manufacturer ordered piece goods from a long established fabric mill with specific delivery dates. The piece goods arrived late but the manufacturer accepted the goods with a written reservation of rights sent to the manufacturer and proceeded to fabricate the ensembles. However, the “ship by” date was missed by two days, the retailer cancelled the entire order and filed suit against the manufacturer for breach of contract seeking damages for lost sales and the costs for the advertised promotion. The manufacturer cross-complained against the piece goods supplier seeking indemnification for any damages that might be awarded to the retailer and damages for its own lost profits.
After months of depositions, interrogatories, document productions and several court hearings the parties agreed to go to mediation with a trained and experienced mediator who had many years of experience in the apparel industry. After two days of intense mediation an agreement was reached. The manufacturer was able to dispose of the refused goods through the retailer’s outlet facilities and agreed to ship other goods in the future at reduced prices to partially make up for the retailer’s losses. The piece goods supplier agreed to a small payment to the manufacturer and agreed to provide a substantial discount on future goods that might be ordered by the manufacturer.
A settlement agreement was approved by the court and was carried out by the parties. Although none of the parties were thrilled about the settlement, they were happy to end the litigation and go about their respective businesses.