Stop Supply Clause
A stop supply clause lets you switch off further goods or services when a customer falls behind — often the fastest way to get their attention.
What's included
- Understand why a stop-supply right is valuable
- See sample wording for suspension
- Appreciate the commercial leverage it provides
- Recognise the need to use it carefully
- Know when to have it reviewed
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The clause
This is general sample wording for a stop-supply (suspension) clause within terms of trade. Replace each [placeholder].
SUSPENSION OF SUPPLY
(a) We may suspend or stop supplying goods or services to you if:
- any amount is overdue; or
- you are otherwise in default under these terms.
(b) We may also place your account on hold and require payment of all
overdue amounts, and pre-payment for future supply, before we
resume.
(c) Suspending supply does not affect any other right we have, and we
are not liable for any loss you say you suffered from a suspension
we were entitled to make.
(d) We will resume supply once the account is brought into order, at
our discretion.Leverage, used with care
For many businesses the threat of stopped supply is more persuasive than any letter — a customer who needs your goods to keep trading has a strong reason to clear the account. But it is a lever to use deliberately. Suspending supply when you are not actually entitled to, or in a way that causes the customer loss without a clear contractual right, can expose you to a claim. That is why the clause both grants the right and makes clear you are not liable for a suspension you were entitled to make.
How to use it
Make sure the right is in your terms before you use it, and tie it to a clear trigger such as overdue payment or default. Give the customer fair notice where practical, keep it factual, and document the decision. Used alongside a firm reminder it is often enough to prompt payment; if it is not, you can refer the debt for recovery. See how suspension fits the broader default rights in the default clause template.
Not legal advice
This is a general template and general information only — not legal advice. Whether you may lawfully suspend supply in a given situation depends on your contract and the facts. Have the clause reviewed by a lawyer, and take advice before acting, where the stakes are significant.
Tips
- A stop-supply right is powerful leverage on overdue accounts.
- Tie it to a clear trigger and make sure it is in your terms.
- Suspending without a right can expose you to a claim.
- Give fair notice where practical and document the decision.
FAQ
Can I stop supply the moment an invoice is late?
Only if your terms allow it and the trigger is met. Acting without the right can backfire. This is general information, not legal advice.
Do I have to warn the customer first?
Fair notice is good practice and can reduce dispute risk, though what is required depends on your terms. Document whatever you do.
Am I liable if the suspension hurts the customer's business?
A well-drafted clause addresses this for suspensions you were entitled to make, but outcomes depend on the facts. Take advice where the exposure is large.
Templates are a head start — not legal advice
Customise to your business and have important documents reviewed. Need to recover a debt? We can help.