Success story

Analysis of the damages claimed by a client against a multinational company in the aviation sector for cancellation of contract

Context:

The Company is one of the leading companies in the aviation sector. As part of its terminal renovation phase, it signed a contract with a supplier for the renovation of the conveyor belts. The contract was never started as it was conditioned to be carried out in conjunction with other improvements to be made in the terminals. Finally, due to changes in the terminals’ needs, the projects were not carried out. The supplier claimed consequential damages and loss of profits despite the fact that the work was not started.

How we helped:

The concepts that the supplier could claim were conceptually determined. Given that the contract was never initiated, it made sense for the supplier to claim consequential damages for the expenses incurred for the award of the contract, but not the loss of profit for a contract that it did not initiate and for which it did not make any investment.
It was analyzed and detailed that the supplier had not initiated the work, nor had it incurred any costs, and no loss of profit could have been generated. In addition, the supplier’s financial statements for the last 4 years showed that it did not earn any money from the activity, with a negative gross margin and a negative result.

Result:

The amount of damages caused to the supplier due to the cancellation of the contract was significantly reduced.
The lack of information and disproportionality of the supplier’s claim for loss of profit was revealed, given that it did not earn money from its activity.

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