Is there any protection for a small business against a supplier who suddenly raises prices and minimum purchase agreements without prior notice?

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Is there any protection for a small business against a supplier who suddenly raises prices and minimum purchase agreements without prior notice?

My supplier changed my minimum purchase requirements to 100 units verses 36 when we first started doing business 3 years ago. They knew I had signed agreements with large catalog companies for drop shipping and I couldn’t afford or did not have warehouse space for more than purchasing 36 units at a time. They also significantly raised prices without prior notice, also knowing what my contracted agreement was with my customers. They are upset that I “landed” 2 large mass merchandiser accounts and they now want control of them. What recourse do I have? This act could put me out of business.

Asked on June 23, 2012 under Business Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If there was a contract between you and the supplier that was in effect (e.g. had not expired; was not due for renegotiation/renewal) and that contract specified prices and quantities, you could enforce that contract against the supplier. However, if there was no then-in-effect contract, the supplier could raise prices and minimum order quanties to any level it wanted, regardless of its effect on you: business 1 is not required to take into account the impact on business 2 in its operations or decision making.


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