Chinese Supplier Raises the Price or Freight After Your Deposit: Must You Pay?

Start with the decision you need to make

This article concerns commercial procurement from China. It does not determine a destination country’s customs assessment, a standalone freight-forwarding claim or consumer remedies. The contracting seller, payment recipient, factory and carrier may be different entities; identify whose obligation and invoice are disputed.

The PRC domestic-law analysis below applies only where those rules govern the issue. An international goods sale also requires a CISG scope check, including places of business, relevant treaty declarations and any effective exclusion. Predominantly service contracts need separate treatment. Your location in the US, UK, Australia, Canada or Singapore does not, by itself, decide governing law.

A four-category test for the extra invoice

Split the invoice line by line. A single demand can contain both a legitimate reimbursement and an unsupported increase.

• An existing buyer-paid cost: was the amount fixed, estimated or payable against actual supporting bills? Check the period, quantity, currency and documents. A later invoice is not necessarily a later price change.
• A change you requested: compare the agreed and revised specification, quantity, packaging, destination or timing. Identify who approved the change and what was agreed about its cost.
• An agreed adjustment mechanism: test the index, base date, trigger, cap, calculation and notice requirements. The clause must form part of a valid bargain; a reference to fluctuating freight does not prove the claimed amount.
• A new bargain: where the price and scope are fixed and no adjustment mechanism applies, the demand is ordinarily a proposal to change the deal. Consent, the supplier’s willingness to perform and any legally available adjustment must then be examined.

Reconstruct the agreed price before arguing about breach

Civil Code Articles 509–511 require agreed performance and provide a sequence for filling gaps: supplementary agreement, relevant contract terms and transaction practices, then statutory default rules. Unallocated performance expenses generally fall on the party performing that obligation; additional expenses caused by the creditor fall on that creditor. This is not a blanket rule making the seller responsible for every transport or tax charge.

Article 1 of the SPC contract interpretation requires contextual interpretation, including the wording, related terms, purpose, practices, good faith, negotiations and performance. Keep the accepted quotation, its validity period, invoice, platform order and complete messages showing what was included when the order was accepted and paid. Payment alone does not settle every unresolved term.

Where EXW, FOB, CIF or DDP appears, identify the agreed version, named place and contractual modifications. Allocation of costs, delivery obligations and transfer of risk must be examined separately. A customs authority’s or carrier’s demand is also distinct from the final allocation between buyer and seller. Destination-country charges need their own advice.

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Can cost inflation justify unilateral repricing?

Under Civil Code Articles 543–544, agreement can change the contract; an unclear change is presumed not to have occurred. A salesperson’s revised invoice is not conclusive consent. Conversely, signing a revised order, expressly accepting it or performing on revised terms may support an amendment. Later saying that payment was made reluctantly may not undo it.

Article 533 addresses a major change in the contractual foundation that was unforeseeable when contracting, falls outside commercial risk and makes continued performance manifestly unfair. It allows renegotiation and, if that fails within a reasonable time, an application to a court or arbitral institution for adjustment or termination. SPC interpretation Article 32 addresses extraordinary price movements associated with policy or supply-and-demand changes, with an exception for specified highly volatile commodities and risk-investment products. An ordinary increase or reduced margin is not automatically enough, and there is no universal percentage threshold.

Ask for the event, timing, foreseeable risks, actual costs and effect on performance. Article 32 invalidates advance exclusion of Article 533, but does not make every increase recoverable. Seeking an adjustment does not itself confer an unrestricted right to stop work, withhold goods or impose a new price.

Force majeure is a separate enquiry under Article 590: inability to perform, causation and extent of impact, timely notice and supporting proof matter. An event arising after the supplier is already in delay does not excuse that delay under this rule. Higher freight costs are not automatically inability to perform; a subcontractor’s price rise does not automatically shift liability to the buyer.

If the CISG applies, Article 29 addresses agreed modification, including written-modification clauses and reliance on conduct. Article 79 sets conditions and notice requirements for exemption; it is not permission to rewrite the price unilaterally. Do not import PRC hardship doctrine into a CISG dispute without analysing the applicable framework, or assume every exceptional cost increase qualifies for exemption.

Choose between performance, withholding and termination

For delivery at the original price, state which undisputed obligations you remain willing to perform and seek a clear response on the extra charge and shipment. A negotiating proposal before the delivery date is different from an unequivocal refusal to deliver unless you pay more. Preserve that distinction in the record.

Withholding an existing instalment requires its own basis. Civil Code Articles 525–526 concern concurrent obligations or a counterparty who should perform first; refusal must correspond to the non-conforming performance. If you must pay first, Articles 527–528 require definite evidence for the insecurity defence, timely notice and resumption if appropriate security is provided. Stopping every payment merely because you dispute an addition can expose you to a counterclaim. CISG Article 71 has separate suspension, immediate-notice and adequate-assurance requirements.

For a PRC-law termination and refund, check contractual grounds and Article 563. Delay in a principal obligation may require a demand and a reasonable further period; express anticipatory refusal or frustration of the contractual purpose involves different grounds. Give a legally supported notice under Article 565 and retain evidence of receipt. Writing “cancelled”, or inventing a 48-hour deadline, does not create a termination right. Restitution and damages then depend on Article 566 and the actual performance.

Under the CISG, examine fundamental breach or non-delivery after an appropriate additional period under Article 49, and Article 72 for anticipatory avoidance. Article 26 requires notice; Article 81 addresses restitution following valid avoidance. An extra invoice alone does not entitle the buyer to immediate recovery of every payment.

If you need the goods, structure any additional payment

A commercial adjustment can be a rational way to limit loss. First agree whether it is a final price change, a temporary advance or a payment with specified issues left in dispute. Record the amount and category, the scope of any no-further-charge promise, shipment milestones, inspection and document requirements, and consequences of non-performance.

A unilateral “rights reserved” note is not a guarantee of recovering the addition later. It will not necessarily undo an agreed final settlement. If a claim is to survive, seek express mutual confirmation of the disputed amount, purpose of payment and matters reserved. Do not sign a broad release and assume a bank-transfer reference overrides it.

If replacing the supplier, retain comparable offers, the reasons for your choice and reasonable cancellation, storage or substitute-purchase costs. Civil Code Articles 584 and 591 and CISG Articles 74–77 constrain damages and address mitigation. Downstream deductions, claimed profit and additional payments are not automatically recoverable in full.

Build an evidence file around the supplier’s likely defences

Preserve originals and complete context; selected screenshots alone may leave the decisive facts unresolved.

• Original bargain: accepted quotes, validity dates, order versions, price inclusions and correspondence. These address “estimate only”, “freight excluded” or “expired quotation” arguments.
• Requested changes: specifications, dimensions, weights, quantities, destination and approval history. These test whether the buyer caused the increase.
• Amount and risk: contractual formula, carrier quotes and bills, dates, event notices and alternatives. These test the existence, calculation and allocation of the cost.
• Breach and notices: payment sequence, payments made, delivery dates, the supplier’s exact response and receipt of demands or termination. Negotiation is not necessarily refusal.
• Recovery and loss: Chinese seller identity, payment instructions, known goods and asset locations, replacement transactions and actual expenses. A claim against the wrong entity can fail even with a strong pricing argument.

Manage the clocks and the China-side recovery route

List instalment dates, shipment deadlines, quotation expiry and the applicable platform or payment-provider deadlines immediately. This article gives no universal platform dispute window: check the rules binding the particular order. Negotiation or platform handling is not automatically a substitute for a legally effective limitation-interruption step.

Where PRC law governs, Article 594 provides four years for litigation or arbitration arising from international goods sales; other claims require separate classification, with the general three-year rule in Article 188 subject to accrual and other rules. Termination has its own agreed or statutory period, including Article 564’s one-year or post-demand reasonable-period rules where applicable. Do not wait for a four-year claims period to run before considering termination.

Check an applicable arbitration agreement before choosing court proceedings. Otherwise assess the relevant PRC jurisdictional connections. Asset or evidence preservation may warrant urgent advice, including security requirements and wrongful-application exposure. After pre-action preservation is taken, proceedings or arbitration generally must be commenced within thirty days; an order is not an indefinite negotiation window.

Recovery also depends on the debtor and reachable assets. An asset-poor trading company, third-party control of the goods or resale can change the value of pursuing delivery rather than money. Seek contract-specific advice before the next payment or termination notice where a balance is due, shipment is expressly refused, goods may be sold, a final release is requested or your delivery window is closing.