Termination Triggered by Legislative Changes — Vendor Claims Refuted

The Situation

The Situation

A global luxury group was left with no option but to terminate its automation program midway through the project schedule and budget spend, due to sudden legislative changes that affected material handling system compliance with the original business case. The decision was necessary and aligned with evolving safety regulations — but it left several contractors midstream. Most notably, the system integrator aggressively pursued full payment despite the early termination.

The vendor cited downstream supplier obligations and pass-through costs under its internal contract structure, launching a $2M claim to recover its exposure. The client had limited appetite for escalation but required a firm commercial defence to protect its position.

A global luxury group was left with no option but to terminate its automation program midway through the project schedule and budget spend, due to sudden legislative changes that affected material handling system compliance with the original business case. The decision was necessary and aligned with evolving safety regulations — but it left several contractors midstream. Most notably, the system integrator aggressively pursued full payment despite the early termination.

The vendor cited downstream supplier obligations and pass-through costs under its internal contract structure, launching a $2M claim to recover its exposure. The client had limited appetite for escalation but required a firm commercial defence to protect its position.

A global luxury group was left with no option but to terminate its automation program midway through the project schedule and budget spend, due to sudden legislative changes that affected material handling system compliance with the original business case. The decision was necessary and aligned with evolving safety regulations — but it left several contractors midstream. Most notably, the system integrator aggressively pursued full payment despite the early termination.

The vendor cited downstream supplier obligations and pass-through costs under its internal contract structure, launching a $2M claim to recover its exposure. The client had limited appetite for escalation but required a firm commercial defence to protect its position.

Our Role

Our Role

Engaged as both Superintendent and Stream Lead, we led the client’s internal commercial response. Our role included:
• Coordinating and guiding legal and procurement teams based on deep knowledge of the AS4910 head contract and the relevant inclusions/exclusions
• Clarifying the client’s true contractual standing
• Engaging external industry experts for independent opinion support
• Deconstructing the vendor’s claim against contract scope and termination clauses
• Surfacing supplier-side logic gaps to invalidate assumed entitlements
• Leading a resolution strategy that neutralised risk without triggering escalation

The Outcome

The Outcome

The $2M vendor claim was resolved. The client paid only for validated deliverables, avoided downstream liability, and exited the program cleanly. Importantly, this was done without reputational fallout — preserving future market standing and supplier relationships.

Partnership Under Pressure

Partnership Under Pressure

When regulatory frameworks shift, clients need more than compliance — they need conviction. We led a focused, evidence-based defence that protected commercial integrity without burning bridges. To the vendor’s credit, once senior leadership became aware of the claim being issued, they stepped in swiftly and constructively — helping resolve the dispute in a manner that prioritised long-term partnership.

Why It Mattered

Why It Mattered

This case proved that even when projects are cancelled, value can still be protected. Through structured governance and expert intervention, the client avoided seven-figure exposure — and set a new precedent for how to manage commercial exits triggered by external legislative change.

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Ready to build with us?

Contact us today to start your project.

Ready to build with us?

Contact us today to start your project.

Ready to build with us?

Contact us today to start your project.