Supplier raising prices after agreed deal

This is a common commercial problem and the answer depends heavily on the specifics, particularly whether you have a binding contract and what its terms say. Let me walk through the key considerations.

The core question: is there a binding contract?

If you agreed a deal, the first thing to establish is whether a legally binding contract was formed. In England and Wales, a contract requires offer, acceptance, consideration, intention to create legal relations, and certainty of terms. If all of those elements are present, a contract exists even if nothing was signed, though proving the terms becomes harder without written documentation.

If there is a binding contract:

The supplier is generally not entitled to unilaterally increase the price. A contract is a contract, and one party cannot simply change its terms without the other's agreement. If the supplier tries to do so, that would amount to a breach of contract or, potentially, an attempt to vary the contract which you are not obliged to accept.

Key things to check in your contract or agreement:

1. Is there a price variation clause? Some contracts allow the supplier to increase prices in specified circumstances, for example annually by reference to inflation, or on giving a certain period of notice. If such a clause exists and the supplier has complied with it, the increase may be valid.

2. Are you within a fixed term? If the contract locks in a price for a defined period, the supplier should not be increasing prices during that period unless the contract expressly permits it.

3. Is there a force majeure or cost escalation clause? Some contracts allow price adjustments if certain exceptional events occur, such as significant increases in raw material costs or supply chain disruption. Check whether any such clause has been triggered properly.

4. What does the contract say about variations? Most well-drafted contracts require any variation to be agreed in writing by both parties.

If you do not have a written contract:

You may still have a binding agreement based on emails, messages, oral discussions, purchase orders, or a course of dealing. The challenge is proving the agreed terms. Gather any correspondence, quotes, order confirmations, or other evidence that records the agreed price.

Practical options:

1. Gather your evidence. Pull together the original quote, order confirmation, emails, messages, or any other record of the agreed price and terms. This is your foundation.

2. Push back in writing. Write to the supplier clearly and promptly, stating that a price was agreed, referencing the evidence, and confirming that you do not accept the proposed increase. Be professional but firm. This puts your position on record.

3. Understand the supplier's rationale. There may be a legitimate reason, such as a genuine error in the original quote, or a significant change in circumstances. Understanding their position helps you decide how to respond strategically.

4. Negotiate if appropriate. Even where you are legally in the right, commercial relationships matter. If the supplier is important to you, it may be worth negotiating a compromise, perhaps a smaller increase or phased adjustment, while making clear you are doing so voluntarily and without accepting they had any right to impose the increase.

5. Consider your remedies if the supplier refuses to honour the deal. If the supplier simply refuses to supply at the agreed price, you may be entitled to claim damages for breach of contract. Damages would typically cover the additional cost of obtaining the goods or services elsewhere, that is the difference between the agreed price and what you actually have to pay a replacement supplier, plus any consequential losses that were reasonably foreseeable.

6. Alternative dispute resolution. Before going to court, consider whether mediation or adjudication might resolve the matter more quickly and cheaply, particularly if the contract provides for this.

7. Court proceedings. As a last resort, you could bring a claim for breach of contract. For claims up to 10,000 pounds, the small claims track in the County Court is designed for litigants in person and costs exposure is limited. For larger claims, the process is more involved and costs can escalate.

Important caveats:

If you have not yet placed a formal order or the terms were still being negotiated, the supplier may argue that no binding contract existed and they were free to revise their pricing. The distinction between a firm offer that has been accepted and ongoing negotiations is crucial.

If the supplier made a genuine and obvious mistake in the original price, there is a narrow doctrine of unilateral mistake that might, in limited circumstances, allow the contract to be set aside, but the bar for this is high.

If you could let me know a bit more about the nature of the deal, whether anything is in writing, the value involved, and whether the supplier has already started performing, I can give you more targeted guidance.