Can A Supplier Change Prices After You Order?

Mia runs a small giftware store in Auckland. She orders 500 branded candles from a supplier for a Christmas campaign, gets an order confirmation at $18 per candle, and pays a 30% deposit. Two weeks later, the supplier emails to say freight and material costs have gone up, so the price is now $21 per candle.

If you're relying on that stock, that kind of email can be stressful. You may already have promised delivery dates to your own customers, set your retail pricing, or locked in a promotion.

Whether the supplier can increase the price usually comes down to the documents you accepted, what counts as the contract, and whether there's a clear price variation clause. Here is how to work through it calmly and protect your business.

Can A Supplier Change Prices After You Order In New Zealand?

Sometimes, but not just because their costs have gone up. If you already have a binding contract at a fixed price, the supplier generally needs a contractual right to change the price or your agreement to the change.

For many business orders, the contract is formed when:

• the supplier gives you a quote or proposal
• you accept it, often by signing, emailing acceptance, paying a deposit, or sending a purchase order
• the supplier accepts your purchase order or starts performing the order

If the agreed price is fixed and there's no valid price adjustment clause, the supplier may be in breach if they refuse to deliver unless you pay more.

The answer can change if the quote wasn't actually an offer. For example, a document headed estimate, indicative pricing, subject to stock availability, subject to supplier confirmation, or prices may change without notice may give the supplier more room to move.

The Fair Trading Act 1986 can also matter. If the supplier represented a price in a way that was misleading or deceptive, or advertised a price they didn't intend to honour, that can create Fair Trading Act risk. This is especially relevant where the supplier knew the price was likely to change but didn't say so clearly.

That said, ordinary commercial price increases aren't automatically unlawful. The key question is whether your supplier promised a fixed price, and what their terms allowed them to do after you ordered.

What Documents Decide Whether The Price Is Fixed?

Your quote, purchase order, order confirmation, emails and terms of trade will usually decide whether the supplier can increase the price. Don't look at one document in isolation.

Pull together the full paper trail before you respond. That usually includes:

• the quote, estimate or proposal
• your purchase order or online order receipt
• the supplier's order confirmation
• any supplier agreement, credit application or account terms you signed
• website terms or terms of sale that were linked during checkout or account setup
• emails, texts or messages about price, delivery or availability
• deposit invoices and payment receipts

Then look for these details.

Was The Quote Valid And Accepted?

A quote that says valid for 30 days is usually stronger than an open ended estimate. If you accepted within the stated period, that points towards a fixed agreed price.

If you accepted after the quote expired, the supplier may argue they were free to reprice the order.

Did Your Purchase Order Become The Contract?

A purchase order can be more than an admin document. If it clearly states the goods, quantity, price and delivery date, and the supplier accepts it, it can help show the agreed deal.

The tricky part is when both sides have their own terms. Your purchase order may say fixed price, while the supplier's terms say prices can change. This is often called a battle of forms. The outcome depends on what was exchanged, when, and how the order was accepted.

Did The Supplier Accept The Order?

If the supplier's website or quote says no order is accepted until we issue written confirmation, the confirmation matters. If the confirmation included a higher price and you didn't agree to it, there may not be a contract at the original price yet.

If they confirmed the original price, took your deposit and started work, you may be in a much stronger position.

What If The Supplier's Terms Allow Price Changes?

If the supplier has a clear price variation clause that forms part of your contract, they may be able to increase the price after you order. The clause still needs to be read carefully.

Some terms allow price changes only in specific situations, such as:

• changes in freight, customs duties or exchange rates
• supplier cost increases outside their control
• changes you request to the goods, quantities or delivery date
• delays caused by you providing information, artwork or approvals late
• orders that are delivered in instalments over time

A fair price variation clause should usually explain when the price can change, how the new price is calculated, and what rights you have if the increase is significant.

Be cautious with broad wording like prices may change at any time. In a business to business setting, broad clauses can still operate, but they may be challenged in some circumstances if they're misleading, hidden, or part of a standard form small trade contract.

New Zealand's unfair contract terms regime under the Fair Trading Act 1986 can apply to standard form small trade contracts. If a term lets one side change the price without a meaningful right for the other side to cancel or respond, it may raise concerns. The Commerce Commission can take action, and a court can declare a term unfair.

The Consumer Guarantees Act 1993 may also be relevant for some supplies to businesses, although suppliers often contract out of the Act for business transactions where the Act allows it and the contract out is fair and reasonable.

For a practical read, ask:

• Was the price change clause shown to you before you ordered?
• Did you sign or clearly accept the terms?
• Does the clause cover this exact type of increase?
• Does it require notice before the change applies?
• Can you cancel if the increase is too high?

What Should You Do When A Supplier Tries To Increase The Price?

Start by pausing and checking your documents before you agree to anything. A calm written response is usually better than a phone call that leaves no record.

Here is a practical order to follow.

1. Gather the documents. Save the quote, order confirmation, purchase order, terms, invoices, screenshots and emails in one folder.
2. Check the exact wording. Look for phrases like fixed price, subject to change, subject to confirmation, variation, escalation, freight surcharge and cancellation.
3. Ask for the contractual basis. Request the clause or document the supplier is relying on for the increase.
4. Reserve your position. If you need to keep the order moving, say in writing that you don't accept the price increase unless and until it's agreed.
5. Work out your commercial options. You might negotiate a smaller increase, split freight costs, reduce quantity, change delivery timing, or cancel if the contract allows it.
6. Keep evidence of losses. If the issue affects your own customer commitments, keep records of extra costs and decisions you had to make.

Here is how that might play out.

Say Mia's candle order was 500 units at $18 each, for a total of $9,000 plus GST. The supplier asks for $21 each, taking the total to $10,500 plus GST. Mia checks the documents. The quote was valid for 14 days, she accepted on day 10, paid a $2,700 deposit, and the supplier emailed, We confirm your order at $18 per unit, delivery in four weeks. The supplier's terms include a freight surcharge clause, but no general product price increase clause.

Mia replies asking which clause allows the extra $3 per candle. She also says she is willing to discuss documented freight increases, but she doesn't agree to a product price change. That keeps the conversation focused on the contract, not just the supplier's margins.

If the disagreement becomes a formal dispute, you may need advice from someone who can help with disputes. Getting your documents reviewed early can help you understand your position before things escalate.

How Can Better Purchase Order Terms Protect You Next Time?

Clear purchase order terms can reduce the chance of surprise price increases. They work best when they're sent before the supplier accepts the order, not after the problem starts.

If you regularly buy stock, materials, packaging, equipment or contractor services, your purchase order terms or supplier agreement should cover price changes directly.

A simple outline might include:

1. Parties And Order Details. Identify your business, the supplier, the goods or services, quantity, delivery location and key dates.
2. Price And GST. State the fixed price, whether it includes GST, and any agreed deposits or instalments.
3. No Price Changes Without Written Agreement. Say the supplier can't increase the price unless your business agrees in writing before delivery.
4. Approved Variations. Explain how changes to quantity, specifications, delivery date or freight are requested and priced.
5. Delivery And Risk. Set out delivery dates, who pays freight, and when risk passes to your business.
6. Order Acceptance. Say how the supplier accepts the order, such as written confirmation or starting supply.
7. Conflicting Terms. Explain what happens if the supplier's terms conflict with your purchase order terms.
8. Cancellation Rights. Set out when you can cancel, especially if the supplier can't meet the agreed price or delivery date.
9. Consumer And Fair Trading Compliance. Require the supplier to comply with the Fair Trading Act 1986 and other applicable laws.
10. Records And Notices. State where notices must be sent and require changes to be documented in writing.

This is only an outline, not a finished document. A lawyer or legal team should tailor it before you use it, because small wording changes can matter a lot when there's a battle between your terms and the supplier's terms.

If you use templates, check they match how your business actually orders. A template that assumes long term supply may not suit one off stock purchases, and a template for services may not suit imported goods with changing freight costs.

Common Mistakes To Avoid

The biggest mistake is agreeing to the higher price too quickly without checking whether you have to. Once you accept the increase in writing, pay the extra amount without reservation, or take delivery on the new terms, it can be harder to argue later.

Watch out for these common traps:

• Only reading the quote. The supplier's account terms, credit application terms, website terms or order confirmation may change the position.
• Assuming a purchase order is always binding. It helps, but you still need supplier acceptance.
• Ignoring expiry dates. If you accepted after the quote expired, the supplier may have more flexibility.
• Missing automatic variation clauses. Some contracts let prices move with exchange rates, freight or manufacturer costs.
• Negotiating only by phone. Follow up in writing so there's a clear record of what was said.
• Using vague purchase orders. If your purchase order doesn't state price, quantity, delivery and whether changes need written approval, it may not protect you well.

Also be careful about refusing delivery or cancelling without checking the contract. If the supplier is actually entitled to vary the price, walking away could expose your business to cancellation fees or other costs.

On the other hand, don't let urgency push you into a bad precedent. If you need the goods urgently, you can sometimes pay the disputed amount under protest and keep negotiating, but the wording matters. Get tailored advice before you rely on that approach.

Key Takeaways

• A supplier can't usually increase a fixed contract price after you order unless the contract allows it or you agree.
• Your quote, purchase order, order confirmation, emails and terms of trade all matter when working out the agreed price.
• Price variation clauses need close reading. Some only cover freight, exchange rates or changes you request.
• The Fair Trading Act 1986 can be relevant if the supplier's pricing conduct is misleading or if a standard form term may be unfair.
• Respond in writing, ask for the clause the supplier relies on, and keep records of any extra costs or delays.
• Clear purchase order terms can help stop surprise price increases before they happen.

If you'd like help with reviewing your supplier terms, preparing purchase order terms, or tightening your contracts for future orders, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.