The Tariff Hit. Who Pays? What Florida Businesses Should Check Before Eating the Cost
The shipment arrived. So did a cost nobody priced into the deal.
The supplier says the tariff must be passed through. The buyer says the price was fixed. Both insist the contract is clear. Frequently, only one of them has read the clause that actually decides the issue.
The Quick Answer
A new tariff does not automatically give a seller the right to increase a fixed contract price. It also does not automatically require the seller to absorb every added cost.
The answer usually depends on the contract’s language concerning price, taxes and duties, delivery terms, changes in law, force majeure, notice, and amendments. For transactions involving goods, Florida’s version of the Uniform Commercial Code may also affect the analysis.
Before paying a surcharge, refusing delivery, stopping performance, or sending a default notice, review the entire agreement. A rushed response can turn a pricing problem into a breach-of-contract claim.
Why This Is Suddenly a Contract Problem
Tariff policy can change faster than a purchasing cycle. A deal that worked when the purchase order was signed may look very different when the goods reach the port.
That does not mean the contract disappeared. It means the risk-allocation language matters more than ever.
Start with these questions:
Is the price fixed, adjustable, or left open?
Does either party expressly assume tariffs, customs duties, taxes, or import charges?
Is there a price-escalation or change-in-law clause?
What delivery term applies, and is an Incoterms rule expressly incorporated?
Does the force majeure clause cover government action, and what relief does it provide?
What notice and documentation are required?
Can the agreement be changed by email, purchase order, invoice, or only by a signed writing?
The label “tariff surcharge” is not the answer. The contract is the starting point.
Can a Supplier Simply Add the Tariff to the Invoice?
Sometimes. Not always.
If the agreement contains a clear pass-through provision, the seller may have a contractual basis for adding the charge. A formula, benchmark, cap, or documentation requirement may limit the amount.
If the agreement states a fixed price and gives no right to adjust it, a unilateral surcharge is much harder to justify. Florida law does allow parties to modify a contract for the sale of goods without new consideration, but the modification still must satisfy applicable good-faith, writing, and signature requirements. A contract that prohibits oral modifications may require a signed amendment.
The parties’ conduct can complicate matters. Paying revised invoices, accepting repeated surcharges without objection, or continuing performance after receiving new terms may create arguments about modification or waiver.
Do not let an accounts-payable decision quietly rewrite a negotiated contract.
Force Majeure Is Not a Price-Reset Button
Businesses often reach for the force majeure clause when an unexpected government action raises costs. That clause may matter, but it is not an automatic escape hatch.
Florida courts generally focus on the words the parties chose, whether the event fits those words, whether it actually caused the nonperformance, and whether the affected party could have prevented or overcome the problem through reasonable efforts.
Florida Statutes section 672.615 may excuse a seller’s delayed delivery or nondelivery in certain goods transactions when performance becomes impracticable because of an unexpected contingency or good-faith compliance with a government regulation or order. It also imposes allocation and notice requirements in some situations.
That is not the same as saying every increase in cost excuses performance. A clause addressing “government action” may help one party, but the remedy might be extra time, temporary suspension, renegotiation, or termination rather than an automatic price increase.
The exact language and facts control.
What If the Contract Does Not Set a Final Price?
Florida law permits some sales contracts to operate without a settled price. Depending on how the agreement is structured, the price may be a reasonable price at delivery. When one party is authorized to set the price, that party must do so in good faith.
An open-price agreement is not permission to name any number. The supplier should be prepared to explain the tariff’s actual application, calculation, and connection to the goods at issue.
Ask for support, including the product classification, country of origin, entry or customs documentation, effective date, and calculation of the claimed increase. A rounded percentage on a revised invoice may not tell the whole story.
Five Moves Before You Respond
1. Build the contract file. Gather the master agreement, amendments, purchase orders, accepted quotes, invoices, specifications, delivery terms, and relevant emails.
2. Verify the charge. Confirm that the tariff applies to the specific product, origin, classification, and entry date. Separate the tariff from freight, brokerage, currency, and margin increases.
3. Identify the controlling clauses. Read price, duties, delivery, change-in-law, force majeure, notice, termination, dispute-resolution, and amendment provisions together.
4. Protect your position. Meet notice deadlines and avoid casually accepting or rejecting new terms. If payment is necessary to keep goods moving, counsel can assess whether a written reservation of rights is appropriate.
5. Negotiate the business solution in writing. The practical answer may be a temporary split, cap, verified pass-through, alternative sourcing plan, adjusted volume, or termination right. Document the solution and state whether it is temporary or permanent.
Draft the Next Contract for the Next Tariff
New agreements should say who bears existing tariffs and what happens if the cost changes. A useful tariff clause can identify:
the tariff baseline and covered government actions;
the products, countries, and classifications involved;
the adjustment formula, threshold, cap, and effective date;
the proof required before a price change;
each party’s mitigation and notice duties;
renegotiation and termination rights; and
whether decreases must be passed through as well as increases.
Precision is cheaper than a commercial dispute.
The Bottom Line
When a tariff lands in the middle of a Florida business deal, neither side should assume the invoice settles the issue. The contract may place the risk on the buyer, the seller, or both. It may also require notice, proof, negotiation, or a signed amendment before the price changes.
MB Law Group helps Florida businesses analyze commercial agreements, respond to disputed surcharges, negotiate contract modifications, and pursue or defend breach-of-contract claims. If a tariff has changed the economics of your deal, review the contract before your next move becomes the other side’s exhibit.
This article provides general information and is not legal advice. Reading it does not create an attorney-client relationship.