Many manufactures have terms and conditions which contain a price alteration clause on caravans currently on order. In recent months more manufacturers are seeking to rely on such terms given the increase in production costs.
Where a manufacturer increases the price of caravans currently on order, a park owner should thoroughly check all terms and conditions in relation to that purchase to see whether such price alteration clause exists.
A park owner may be bound by such a term where present in the agreement and as a result, be required to pay the increase. Where such a term is absent from the agreement, there is no obligation on the park owner to pay the increase in respect of current caravans on order. Legal advice should be sought where a park owner is uncertain of their position.
For many park owners there will be another, separate agreement, they have with their customer to provide the caravan currently on order. A standard term of such agreements is one specifying the price a customer will pay for the caravan. This can leave the park owner in a difficult position as if a manufacturer increases the price, the park owner will suffer the loss in the absence of having a similar price alteration clause in their agreement with their customer. The alternative is the park owner risks being in breach of contract with their customer if they are unable to provide the caravan because they have not paid the price increase required by the manufacturer.
How can I minimise the risk?
To minimise this risk, park owners may wish to insert a clause into their agreement with their customer permitting them to change the price in certain situations. Such a clause would need to be carefully drafted to ensure it complies with consumer law and is an enforceable term. For these requirements to be met, the term must be fair, reasonable, clear and transparent. Any park owner wishing to insert such a term should seek specialist legal advice as to its wording.