Your supplier raised prices mid-contract. What should you do now?

A price rise can hit the whole job

A supplier’s mid-contract price rise is more than an annoying email. It can turn a simple order into a cash flow problem, delay a delivery, and put your own program under pressure. If the materials are on the critical path, the real issue is not only the extra cost. It is whether the job can still run on time.

Do not treat the new number as accepted just because the supplier says their costs have changed. The answer depends on the supply terms you agreed to, not on a general claim that prices are up. Start by pulling together the contract, quote, purchase order, invoices, and any later emails so you can see what was actually promised.

Read the clause that controls the price

Look for any clause dealing with pricing, review periods, substitutions, minimum orders, or long-term supply. Business.gov.au notes that a written contract is more reliable than a verbal one, and that if a contract is long term, it can be sensible to include a clause to review the fee if business costs increase. The same logic applies to supply deals with moving prices.

Also check whether the agreement lets either side vary terms, and how that variation must be made. Business.gov.au says it is best to put contract changes in writing and have both parties sign, while Business Victoria says to check the contract or documents first if there is a dispute with a supplier. If there is no price-change clause, the supplier still has to persuade you, not simply announce a new rate.

Source: Official guidance

Ask for the basis in writing

Ask the supplier to set out the increase in writing. You want the clause they rely on, the exact items affected, the new price, and the date it would start. If they say their costs have changed, ask for the supporting figures, not just a general explanation. That turns a vague demand into something you can test against the contract.

Keep your own note of the conversation and do not rely on memory. Business.gov.au recommends plain English and clear contract records, because they reduce disputes later. If the supplier will not put the basis in writing, that is useful information too. It may mean there is no clear contractual footing for the increase, or that they want room to change their story later.

Negotiate before the job stalls

If the supplier has a credible basis, negotiate the smallest workable change. That might mean a revised rate for the remaining deliveries, a change to the order size, staggered shipments, or a temporary uplift tied to a single material only. If the numbers do not work, ask whether a revised scope can solve the problem without blowing out the whole job.

Do not wait until the site is idle before you talk about alternatives. Business.gov.au says it is important to negotiate outcomes both parties are happy with, and Business Victoria encourages early communication with suppliers. If you need another source, check replacement supply now and compare the real landed cost, including freight, timing, and any knock-on delay. A cheaper quote is no help if it arrives too late.

Lock the position down and move on

If you agree a change, confirm it in writing straight away. Record the revised price, the start date, the affected items, and any changed delivery or payment terms. If you do not agree, say that clearly and keep to the original terms while you sort out the next step. This article is general information only and is not legal advice.

If the supplier dispute is starting to affect the project, or you are trying to keep several jobs moving at once, CRP can help you work through the dispute resolution options and coordinate independent qualified professionals. Call CRP today to talk through the contract, the supplier’s request, and the practical next step before the delay spreads further.