I. Three Claims
There are three claims available regarding delayed delivery. Under legal practice, a supplier’s delay constitutes a breach of contract, allowing for three types of claims: Specific performance—demanding immediate delivery (provided you still actually need the goods; this does not apply if the delay forced you to purchase them elsewhere);
Liquidated damages—claiming the penalty amount specified in the contract (e.g., a daily penalty of 0.03% or 0.3% of the contract value); and Compensation for losses—claiming actual losses if liquidated damages are insufficient to cover them. This includes both direct losses and lost profits (such as compensation paid to downstream customers due to the delay). Per Article 577 of the Civil Code, failure to perform contractual obligations or performance that does not conform to the agreement entails liability for breach of contract, which may include specific performance, remedial measures, or compensation for losses.
II. Standard Procedure
The standard handling process involves three steps: formal demand, contract termination, and finally, a claim for damages.
According to industry legal guidelines, do not simply wait if the delivery deadline passes: Secure evidence—issue a formal demand in writing (via a formal letter, email, or courier), specifying the order number and the number of days overdue;
set a reasonable deadline for performance and state clearly that the contract will be terminated if performance is not completed by that time; Upon expiration of the reasonable deadline—immediately issue a notice of termination; the contract is terminated the moment the notice is received; Claim damages—after termination, you retain the right to pursue liquidated damages and compensation for losses (and strictly enforce the double refund of the deposit where applicable); Retain evidence—keep emails, courier delivery receipts, and chat logs. Formal demand, termination, and a claim for damages constitute the standard three-step process for protecting your rights in the event of delayed delivery.
III. Calculation of Liquidated Damages
How are liquidated damages calculated?
Based on industry contract practices, common rates include: 0.3% per day—liquidated damages are paid at a rate of 0.3% of the total price of the overdue portion for each day of delay, and Party A has the right to rescind the contract if the delay exceeds 15 days; 0.5% per day—some contracts stipulate a daily rate of 0.5% and grant the right to terminate the contract; 0.03% to 0.05% per day—judicial practice commonly sees rates of 0.03% to 0.05% per day, with the total amount of liquidated damages capped at 5% to 20% of the total contract price; fixed amount—500 or 1,000 yuan per day, with the right to rescind the contract if the delay reaches 7 days; earnest money penalty—the party receiving the earnest money must refund double the amount if in breach—higher liquidated damages are not necessarily better; if the amount is excessive, courts may reduce it (generally not exceeding 30% of actual losses).
IV.
Conditions for Rescission
Under what circumstances can the contract be rescinded?
According to the law, the right to rescind is subject to specific conditions: failure to perform after a demand—failure to perform primary obligations within a reasonable period following a formal demand allows for contract rescission; delay exceeding 15 days—Party A has the right to rescind if delivery is delayed by more than 15 days as stipulated in the contract; fundamental breach—delay renders the contract’s purpose unachievable (e.g., missing deadlines for use, resale, or project delivery), creating greater grounds for rescission and refunds; installment delivery—under Article 633 of the Civil Code, if a seller fails to deliver one installment, thereby preventing the purpose of that installment from being achieved, the buyer may rescind the contract regarding that specific installment; frustration of contract purpose—courts may require continued performance for short-term delays, whereas rescission is supported only when the delay has compromised the contract’s purpose.
V.
Avenues for Protecting Rights
Compensation for losses and avenues for protecting rights.
Based on practical cases, the scope of and avenues for claims include: **Scope of loss**—liquidated damages for delay, general contractual penalties, refunds for non-compliant equipment, and appraisal fees; **Calculation of compensation**—actual losses, loss of expected profits, third-party fines, and price differentials for expedited procurement; **Negotiation**—first issue a formal demand to negotiate phased delivery or accelerate work to recover lost time; **Arbitration**—if agreed upon, file for arbitration (binding final award, faster process than litigation); **Litigation**—file suit at the court where the defendant resides (manufacturer’s location) or where the contract is performed, submitting a complaint and list of evidence; **Force Majeure**—claiming exemption due to weather (rain, snow, freezing) requires proving a direct causal link to the delay; courts will not uphold claims with insufficient evidence—follow the sequence of negotiation, then arbitration, then litigation;
the more complete the chain of evidence, the higher the chance of success.
Conclusion
How should one handle delayed delivery of a non-standard assembly line? The conclusion is: “Issue formal demands and document everything; terminate and claim damages; escalate step-by-step.” **Claims**—continued performance (applicable if the goods are still needed), liquidated damages (daily rates of 0.3%–0.5% or 0.03%–0.05%), and compensation for losses (direct losses plus expected profits and compensation paid to downstream parties for your own breach); **Process**—first, issue a written demand (specifying the order number, days of delay, and a reasonable deadline), then send a termination notice (termination takes effect upon receipt), and finally claim damages (liquidated damages + losses + double the deposit); **Conditions for termination**—failure to perform after the demand, delay exceeding 15 days, fundamental breach frustrating the contract’s purpose, or failure to achieve the purpose of a specific batch during phased delivery; **Avenues**—negotiate phased delivery, arbitrate (final and binding), or litigate (choosing the court where the defendant is located or where the contract is performed). According to industry practice, delay itself is not the problem;
the danger lies in failing to create a paper trail—if you document everything (demand letters, delay duration, chat logs), the initiative remains in your hands.
