Late Delivery Liquidated Damages Notice Template
When a supplier misses a delivery date, a phone call rarely protects your rights. A written notice that cites the contract clause, the rate and the facts does. This template builds that letter so you can send it the same day the delay becomes certain.
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Late Delivery Liquidated Damages Notice Template
Notice of Late Delivery and Claim for Liquidated Damages
Date: 2026-10-20
To: Head of Sales, Meridian Castings Pvt Ltd From: Apex Hydraulics Ltd Reference: PO-2026-04417 under Supply Agreement dated 2025-03-01
1. Facts
Meridian Castings Pvt Ltd agreed to deliver Pump housing PH-210, 1,200 pieces on or before 2026-09-15. The goods were not delivered by that date. The current delivery date is 2026-10-12.
2. Contract basis
Under Clause 9.2 of Supply Agreement dated 2025-03-01, late delivery gives rise to liquidated damages at the following rate: 0.5 percent of the value of late goods per full week. The cap is: 10 percent of the value of late goods. We believe this clause applies to the delay described above.
3. Amount
Liquidated damages accrued to the date of this notice: USD 2,160.00. Further amounts continue to accrue until delivery, up to the cap.
4. Impact
Our assembly line for customer order SO-7781 was held for 6 days and two customer shipments were delayed.
5. Requests and reservation of rights
Please confirm within 7 days: the firm delivery date, the root cause of the delay, and the steps taken to recover. We accept deliveries only on the basis that all rights and remedies under the contract and at law are reserved, including the right to credit or deduct the amount above from open invoices, and that acceptance of late goods is not a waiver of any claim.
Acknowledgement
This template is a starting point, not legal advice. Whether a delay clause is enforceable, whether notice is a condition, and how damages are measured depends on the contract and local law. Check notice periods and delivery method in your agreement.
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How to use it
Open the supply agreement or PO terms first and copy the clause number, rate and cap exactly. Enter the original contractual delivery date, not a date moved informally by email. Add the revised date, the amount accrued to date and a factual description of impact. Export to PDF, sign, and send by the method the contract requires for notices, often courier or registered post plus email. Log the notice date in your ERP supplier record.
- Quote the clause number and rate verbatim
- State facts and dates, avoid accusations
- Use the notice method your contract demands
- Reserve rights so acceptance of late goods is not a waiver
Method behind the numbers
Liquidated damages are a pre-agreed sum for delay, commonly a percentage of the late goods value per week or day, up to a cap. In many legal systems they must be a genuine pre-estimate of loss rather than a penalty. Use the companion liquidated damages calculator to compute the amount before you fill in the claimed figure. Count only the delay measured against the contract date, minus any agreed grace period.
Worked example
A valve maker ordered 1,200 housings worth USD 36,000, due 15 September. The clause gives 0.5 percent per full week, capped at 10 percent. Delivery lands on 12 October, which is three full weeks late plus change. Three full weeks at 0.5 percent is 1.5 percent, or USD 540. If the clause runs on total order value and counts partial weeks as full, four weeks gives USD 720. The notice states whichever reading the contract supports.
Common mistakes
Typical errors are waiting too long, missing a notice deadline in the contract, claiming more than the cap, ignoring force majeure carve-outs, and accepting delivery without any reservation of rights. Also check that you did not cause the delay through late drawings, late approvals or changed specifications, because that weakens the claim.
Frequently Asked Questions
Do I have to send notice before deducting damages?
Often yes. Many contracts require written notice within a set period before damages can be claimed or deducted. Read the notice clause and send the letter early, even if the final amount is not yet known.
What if my contract has no liquidated damages clause?
Then you generally have to prove actual loss under general contract law. You can still send a notice of delay that reserves rights and asks for a recovery plan, but the amount claimed will differ.
Can I just deduct the amount from the supplier invoice?
Only if the contract allows set-off. Deducting without a right to do so can put you in breach. Check the payment and set-off clauses and consider agreeing the credit note with the supplier in writing.
Does accepting late goods waive my claim?
It can, if you say nothing. The reservation of rights paragraph in the notice is there to prevent that. Repeat the reservation on the goods receipt or acceptance paperwork where practical.
If late-delivery data lives in your ERP, Netray can help report overdue purchase order lines against contract terms automatically on your own infrastructure.
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