Key Purchase Order Provisions

Purchase orders provide retail businesses a means of contracting their sales. A purchase order is a type of contract, specifying in writing the agreement that the seller and buyer have made in terms

Purchase order forms can vary depending on your particular type of retail business. The easiest way to develop a purchase order form is to take a generic form and adapt it to your line of business.

The provisions you should include when drawing up a purchase order form are:

• Names of the seller and purchaser: This provision should list the names and businesses of both the seller and purchaser.
• Purchase items: Should include an itemized listing of all goods and services being purchased.
• Representations and warranties: Puts in writing the basic assumptions that underlie the transaction, particularly with respects to the condition of goods and expectations in terms of services. Warranties refer to guarantees the seller makes in terms of goods and services, including refund and return policies.
• Price: The price of the goods and services, along with any taxes, discounts, shipping fees, and handling charges.
• Delivery: Describes how the seller will deliver the goods and/or provide the services to the purchaser.
• Payment terms and conditions: This provision outlines the terms of payment, whether it is cash on delivery or financed by the seller. This should include any interest and late charges that relate to the financing of the purchase.
• Legal recourse: Boilerplate clauses that are common to most contracts and protect the interest of both parties. For more information on these provisions, be sure to read Business Contract Boilerplates for Small Businesses.

Visit the AllBusiness.com Forms and Agreements section to view a sample Purchase Order.