[Direct answer]In the Beijing area, the original price remains valid—fixed-price contracts are binding on both parties. If the supplier unilaterally raises the price without a legal basis, the buyer has the right to refuse, and the supplier must still supply the goods at the original price. Any suspension of supply would constitute a breach of contract. What really needs to be distinguished is "commercial risk" and "change of circumstances": normal price fluctuations (in public precedents, a price increase of about 30% is considered a foreseeable commercial risk) do not constitute a reason for price increases. Only major changes that could not have been foreseen at the time of contracting, or situations where continued performance would be clearly unfair, can lead to requests for renegotiation or even court-ordered modifications or terminations. The legitimacy of price increases must be determined by the court, not by the supplier.

I. Problem Background and Typical Scenarios

The raw materials have risen sharply overnight, and the supplier has sent a "price adjustment notice": if the buyer refuses to accept the price increase, the supplier will cut off the supply; the buyer's production line is waiting for the raw materials to be put into production, but if the buyer accepts the price increase contract, the profit will be eaten up entirely—the unilateral price increase notice tests not the buyer's emotions, but their precise understanding of the rules governing changes in the situation.

II. Key points of contention

First, the boundary between commercial risks and changes in circumstances. Second, the procedural obligations of renegotiation. Third, the allocation of default risks after refusing price increases. Fourth, the preventive design of contract terms.

III. Professional analysis by Henglue Lawyers

The first layer: Comparing the two cases to clarify the dividing line. In one public case, the cable company applied for a price adjustment because the copper price rose from 6.897 yuan per ton at the bidding to 7.9 yuan per ton, but the request was rejected. The court held that the significant increase in copper prices was an unforeseeable major change at the time of contract signing, and continuing to perform the contract at the original price would be unfair to the supplier, constituting a change of circumstances—the unprecedented fluctuation of raw materials exceeded normal forecasts, providing a legitimate basis for price adjustment. In another case, Company B claimed a change of circumstances and unilaterally terminated the contract due to the rise in choline chloride prices caused by the pandemic and power restrictions. The court held that the price increase of only about 30% was a normal commercial fluctuation that the supplier could reasonably foresee, and therefore did not constitute a change of circumstances, ruling that the supplier was in breach of contract. Under the same rules, three variables—the magnitude of the price increase, the predictability, and industry norms—determine which side prevails in assessing the legitimacy of the price increase. This is not a self-evident conclusion based on a unilateral notice. The second layer: Re-negotiation is a precondition. The process of invoking a change of circumstances involves first negotiating with the adversely affected party within a reasonable timeframe. If no agreement is reached, the party may request the court or arbitration institution to modify or terminate the contract. Skipping the negotiation process and suspending supply or unilaterally terminating the contract will result in breach of contract even if the substantive elements of a change of circumstances are met, as procedural negligence translates into breach of contract liability. "Negotiating while supplying" is a prudent approach, and keeping records of negotiations (minutes and correspondence) paves the way for future litigation. The third layer: The rights combination for rejecting price increases. If the buyer refuses the price increase, the supplier remains obligated to supply at the original price. Suspending or delaying supply constitutes a breach of contract, and the buyer may claim continued performance, damages for breach of contract, and compensation for losses (including the difference in purchasing costs from third parties). At the same time, beware of reverse risks—if the supplier's claim of a change of circumstances is ultimately supported by the court, the party that insists on the original price may face the result of the contract being modified or terminated. A rational strategy is to participate in negotiations and retain evidence (purchasing hedging arrangements, price lock agreements) to turn "refusal" into "reasoned refusal". The fourth layer: Clause prevention is the best approach. Long-term supply contracts should embed price adjustment mechanisms (price adjustment formulas linked to raw material indices, thresholds and upper limits for adjustment), pre-negotiation clauses, and clauses on breach of contract penalties and compensation for alternative purchases—the best solution to price increase disputes is written into the contract at the signing stage. Clause design should give both parties a way out in the face of price fluctuations, rather than allowing either party to hold the other hostage with "raise or not raise".

IV. Practical suggestions and legal basis

The first step is to send a written response to the price increase notice, stating that you do not accept the increase and request continued performance of the contract; the second step is to document the evidence of the loss caused by the supply suspension and the price difference between the alternative purchases; the third step is to participate in the renegotiation and keep a full record of the process; the fourth step is to sue for continued performance or compensation if the negotiation fails. The main legal basis: Articles 533, 509, and 577 of the Civil Code of the People's Republic of China, and the relevant provisions of the Interpretation of the General Provisions of the Contract Chapter of the Civil Code issued by the Supreme People's Court; the specific application shall be subject to the currently effective regulations.

5. Henglu Law Firm's Advice

There are three key points to address when dealing with price increases in supply contracts: 1. Under fixed-price contracts, refusing to raise prices is justified and stopping supply constitutes a breach of contract. 2. A price increase of 30% is considered a risk, while exponential price hikes might be deemed exceptional circumstances—the court will ultimately decide the matter. 3. Including a price adjustment formula in the contract can help resolve disputes over price increases, with the effective date of the contract serving as the decisive factor. For disputes involving price increases and changes in circumstances, parties may seek resolution through legal channels.Business and contract disputes in enterprisesThe service provides a comprehensive solution, which involves the integration of the execution of payments and breach of contract penaltiesCreditor's rights and debts, and enforcementFor reference, you can refer to the section on the construction of an enterprise compliance systemIntellectual property protection and corporate lawFor any questions regarding difficult cases, please feel free to consult us.Special servicesTeam.

VI. Frequently Asked Questions

Q1: Can suppliers raise prices just because the cost of raw materials has increased?

No. Both parties to a fixed-price contract are bound by the agreement. Normal price fluctuations are considered commercial risks, and either party has no legal basis to unilaterally increase the price.

Q2: What is the minimum increase that constitutes a change in circumstances?

There is no fixed ratio. In public precedents, an increase of about 30% is considered a foreseeable commercial risk. Only a sudden increase of several times and one that could not be foreseen at the time of contract signing might constitute a change of circumstances, which will be assessed by the court on a case-by-case basis.

Q3: What should I do if the other party stops supplying goods because I refuse to accept the price increase?

The suspension of supply constitutes a breach of contract, and the party can claim for continued performance, breach of contract penalties, and losses in the difference between the replacement purchase price and the original purchase price. Evidence should include the fixed reminder and proof of losses.

Q4: Should we participate in the negotiation?

Yes. If the circumstances change, renegotiation is a prerequisite. Participating in the negotiation not only leaves evidence but also avoids losing points in the process. It's the most stable to supply goods while negotiating.

Q5: How to prevent price increases in long-term contracts?

The pricing formula that incorporates the raw material index, the triggering threshold, the pre-negotiation process, and the compensation clauses for supply disruptions aims to replace the adversarial negotiation process with a more structured mechanism.

This article is written based on the common judicial interpretations in the Beijing area. If the case occurs in other regions, it is recommended to consult local lawyers to verify the regional differences.

VII. Related public cases (for reference, not handled by our firm)

The following cases are all sourced from the official websites of courts at all levels, judicial authorities, and authoritative media outlets, and are unrelated to the cases handled by our firm. They are provided solely for reference in understanding relevant adjudication rules and do not constitute opinions on specific cases.

[Case No.]The case number has not been made public.
[Trial Court]The People's Court of Pingyin County, Shandong Province (the second instance upheld the original judgment)
[Judicial Summary]After Power Construction Company signed a fixed-price procurement contract with the cable company, the price of copper rose from 68,970 yuan per ton at the time of bidding to 79,000 yuan per ton. The cable company applied for a price adjustment, but the purchaser refused to negotiate and terminated the contract on the grounds of the supplier's late delivery, demanding a breach of contract penalty of over 920,000 yuan. The court held that the significant increase in copper prices constituted a major change unforeseeable at the time of contracting, and it would be unfair to require the supplier to continue to fulfill the contract at the original price. This constituted a change of circumstances, and the supplier had the right to request a price adjustment through negotiation. The purchaser's refusal to negotiate and its delayed notification resulted in late delivery, so the supplier's failure to continue supplying did not constitute a breach of contract. The court ruled to dismiss all of the purchaser's claims, and the appellate court upheld this ruling. Key points: Under a fixed-price contract with a change of circumstances, the parties may negotiate a price adjustment. The party refusing to negotiate may not unilaterally shift the risk to the other party.
[Source]The People's Daily Client (Case Announcement Conference on Enterprise-Related Sales Contract Disputes of Pingyin County People's Court) (2025)

[Case No.]The case number has not been made public.
[Trial Court]The People's Court of Nanchang High-Tech Industrial Development Zone
[Judicial Summary]Company B claimed that the price of choline chloride had risen due to the pandemic and power supply restrictions, and therefore sought to invoke a change of circumstances to unilaterally terminate the contract. The court held that: the contract price increase was only around 30%, which was still a price fluctuation that the supplier could reasonably foresee and was within the scope of normal commercial risks, not constituting a change of circumstances; Company B also failed to provide evidence to prove the specific impact of the epidemic prevention and control measures on its performance and to fulfill its obligation to notify the purchaser in a timely manner. The court determined that Company B had breached the contract and ordered it to compensate the purchaser for the price difference losses of over 540,000 yuan incurred when the purchaser procured the goods from a third party. Key points: Whether the price increase exceeds the scope of normal commercial risks is the key to distinguishing between a change of circumstances and a breach of contract. The party claiming a change of circumstances bears the burden of proof.
[Source]The official website of the People's Court of Nanchang High-tech Industrial Development Zone published an article titled "[Interpreting the Law through Cases] Is the Price Fluctuation of the Subject Matter During the Sale Process Due to a Change in Circumstances or Commercial Risk?" (2023-08).

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, so as to avoid missing the statutory time limit. →Corporate commercial legal services·Beijing Henglue Law Firm

Disclaimer: This article is compiled based on current effective laws and regulations and publicly available adjudication rules, and is provided for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.