View Full Version : Retroactive price increase/ PO already issued
04-04-2011, 08:33 PM
I recently have had a supplier come back and try to increase the pricing about a dozen purchase orders, stating the material costs have increased since the time of order. Once quoted doesn't that price we accepted and entered on our purchase orders create a legal contract? How can a supplier retroactively raise the price? The only confirmation received was a rubber stamped "confirmation" on a photocopy of my purchase order.
Any info would be greatly appreciated, thanks, Russell Decotis
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05-24-2011, 07:35 PM
One possibility is that the your purchase orders were placed after the quote's validity period, meaning the original price expired before your PO were sent out. So seller can acknowledge the price but they are not obliged to if the price expired and they face higher material cost. Of course they can keep their mouth shut if the material cost drops, and you pay more than you should.
Moreover, if nowhere in a quote or a contract (purchase order is contractual) says that a price is firm and fixed, any party can ask to change it for convenience. Seller can use fine prints on their quote saying that price is subject to change without prior notice, even after PO is accepted. Buyer can state on the PO's fine print that you have the right to lower price if material costs drop.
You may want to go back to check if the quote has strings attached; or if your PO has standard Ts&Cs printed on back and what it says about the price. If none of above have clear definitions on the price and its validity, then it's up to you to negotiate with your supplier.
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