Essential Provisions in Purchase Orders
Purchase orders are used to document the sale of products or materials. When you buy something from another business, the seller provides a purchase order for you to sign. Make sure you look it over carefully; it will undoubtedly be written in favor of the seller.
Read the fine print � it may include details about the warranty, payment terms, and return policy that the seller neglected to discuss. Don't be afraid to make changes to the purchase order � even if it's a preprinted form. Examine every purchase order to make sure it includes complete information about:
- Goods. The purchase order should include a detailed description of the goods you intend to buy. To avoid misunderstandings, make sure the description includes all parts, related items, and model numbers.
- Price. Make sure the pricing is clear. Watch out for hidden charges and handling and delivery fees.
- Delivery. Check the delivery terms and find out if the seller will deliver the goods to you or requires you to pick them up. If the goods are guaranteed to be ready by a particular date, find out what happens if they aren't ready on time.
- Terms. Check when payment is due, if partial payment is due in advance, or if payment terms apply.
- Refund and return policy. The seller will want to limit your rights to refunds and returns, so make sure you check the return policy. At the very least you should be given a refund or the right to return the goods if they are defective, do not conform to your specifications, or aren't satisfactory.
- Tax. Determine the amount of tax and who pays it.
- Representations. If you're buying goods based on representations or statements made by the seller or the seller's salespeople or agents, make sure the purchase order states that you're buying the goods based on those statements.
- Warranties. Know the warranty on the goods, what it covers, and for how long.
